AI-Powered Chatbots for Customer Service in Banking

Abstract

Artificial Intelligence (AI)-powered chatbots have become an integral component of digital transformation in the banking sector. These intelligent conversational agents utilize technologies such as Natural Language Processing (NLP), Machine Learning (ML), and Generative AI to provide efficient, personalized, and round-the-clock customer support. The increasing demand for instant banking services has encouraged financial institutions to deploy chatbots for handling customer inquiries, transaction assistance, financial guidance, and complaint resolution. This study examines the role of AI-powered chatbots in enhancing customer service within banking institutions by reviewing existing literature and proposing a conceptual framework for chatbot adoption. The study identifies key benefits such as improved operational efficiency, reduced service costs, enhanced customer satisfaction, and greater accessibility. Simultaneously, it highlights challenges associated with privacy, trust, cybersecurity, and ethical considerations. The findings suggest that AI chatbots significantly contribute to customer engagement and service innovation while emphasizing the necessity of integrating human support for complex banking interactions.