Backbase Introduces Conversational Banking AI for Enhanced Customer Service

Currently, over 10 banks have adopted this new solution. For instance, one of the largest banks in South Africa has reported an increase in self-service containment from 20% to 70% across 22 million customer interactions.

This launch reflects a growing trend in the banking sector towards AI-driven execution, which raises the question of whether financial institutions will prioritize cost reduction over enhancing customer experiences.

The introduction of Conversational Banking comes 18 months after Backbase released its AI-driven banking platform aimed at improving customer engagement through AI-assisted self-service and real-time support. The new tool, operating on Backbase’s AI-native Banking OS, extends the capabilities of AI by allowing agents to perform specific banking actions according to bank-defined permissions and policies.

This tool integrates with existing digital banking infrastructures, enabling customers to complete tasks such as blocking and replacing lost payment cards or checking payment statuses using natural language commands. The AI agents leverage customer context and connected systems to execute these tasks, while bank employees can step in to handle more complex requests, reviewing the AI's previous actions.

Jouk Pleiter, Founder and CEO of Backbase, stated, "Digital banking put the bank in the customer’s pocket. The next step is to let customers say what they need done and have the bank’s agents act on it intelligently. This future is now a reality, changing both customer experiences and the economics of banking services."

Backbase believes that empowering AI agents to perform tasks can enhance banks' operational capacity. A McKinsey & Company report suggests that this agentic AI could reduce banks' operating costs by 15% to 20%, allowing employees to focus on more complex customer needs.

The positive feedback from banks already using Conversational Banking indicates a significant shift from traditional AI chatbots, which primarily provide information and direct customers to resources. By enabling AI to manage tasks, banks can automate the resolution of customer inquiries, thereby transforming AI into a functional element of the banking process. Furthermore, Backbase's expertise in compliance positions it well to ensure robust governance and permissions within this new AI framework.

Future considerations remain regarding how banks will utilize these AI capabilities: primarily for cost-saving measures or to deliver more tailored customer experiences. While automating routine requests can improve efficiency, the potential for personalized proactive banking services may offer a more substantial long-term advantage.