Remember the last time you tried to get help from your bank's chatbot? If you're like most customers, it probably left you more frustrated than when you started.

The numbers tell the story; only 29 percent of banking customers are satisfied with chatbot support—the lowest satisfaction rate of any digital banking channel. Even email support scores higher.

So what’s wrong with chatbots? And how does your bank fix it? 

The problem with ‘dumb’ bots

Traditional chatbots were built on rigid, rule-based systems. They match keywords to generic responses, leading customers in circles instead of providing real solutions. They can’t understand context, don’t know customers’ history, and definitely can’t detect when a customer is stressed.

Even tech-forward companies like Klarna discovered this the hard way. After deploying a chatbot to handle 75 percent of support interactions, the buy now, pay later giant ended up pausing the initiative and returning to human agents when customers couldn’t get their issues effectively resolved.

The game-changer: conversational AI

But there’s a new generation of technology that’s changing everything when it comes to automated support. Conversational AI goes beyond simple chatbots—it’s powered by machine learning, natural language processing, and generative AI to create truly intelligent interactions.

Here’s what makes conversational AI different:

• Understands context and remembers previous conversations

• Detects emotional tone and responds appropriately

• Knows when to escalate to human agents seamlessly

• Personalizes responses based on individual customer data

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Real results from early adopters

The results from financial services providers that have adopted conversational AL speak for themselves:

SoFi deployed Galileo’s Cyberbank Konecta platform and saw:

• 50 percent reduction in chat abandonment

• 65 percent faster average response times

Bank of America’s digital assistant, Erica, now handles billions of interactions and helped drive:

• Highest-ever customer satisfaction scores

• 19 percent earnings boost through improved cross-selling and efficiency

But success isn't automatic. With 64 percent of consumers preferring companies to avoid AI in customer service, banks must prioritize transparency and seamless human handoffs. The key is making AI feel helpful, not limiting.

Want to learn more? 

Ready to see how conversational AI can transform your bank’s customer service experience? Download our latest Embedded Finance Tracker now.