CUSTOMER EXPERIENCE ENHANCEMENT USING AI CHATBOTS IN BANKING

Abstract

Artificial Intelligence (AI) powered chatbots have emerged as a transformative tool in the banking sector, reshaping the way financial institutions interact with customers. This paper examines the role of AI chatbots in enhancing customer experience (CX) in banking, focusing on service quality dimensions such as responsiveness, accuracy, personalization, and accessibility. With banks increasingly deploying conversational AI for balance enquiries, fund transfers, complaint registration, and product recommendations, understanding customer perception and satisfaction has become essential. Primary data was collected through a structured questionnaire administered to bank customers who have used chatbot-based banking services, supplemented with secondary data from industry reports, bank publications, and academic literature. The study finds that 24/7 availability, faster query resolution, and reduced waiting time are the strongest drivers of customer preference for AI chatbots over traditional banking channels, while concerns persist regarding limited handling of complex queries and lack of human empathy. The paper concludes with practical recommendations for banks to enhance chatbot design, integrate human hand-off mechanisms, and strengthen data security to maximize customer experience gains.