What Lenders Can Learn from Fintech Chatbots

Although banks and credit unions are contemplating countless ways to apply artificial intelligence behind the scenes, FIs are lagging in the development of AI-powered chatbots on the front lines of lending. Javelin’s diagnostic analysis of AI-powered consumer-facing chatbots for 11 fintechs, non-bank lenders, and retail banks found that retail FIs consistently fail to provide personalized information and query responses. The analysis compared how chatbots answered 10 common and fundamental queries in four phases of seeking a loan. The fintechs had the edge for six of the responses, while FIs were superior for only one. This puts them behind pace-setting fintechs that have developed narrowly focused AI-powered chatbots to engage and advise shoppers and win loans. 

As a result, shopping for a loan at an FI remains a do-it-yourself process that puts the onus on shoppers to understand their financial needs, identify the most suitable loan products, and take the necessary steps to apply. There is little evidence that FIs are ready to provide a help-me-do-it experience that guides shoppers through options, incorporates personal financial factors, and issues specific recommendations. 

Key questions discussed in this report:

• How do lending chatbots from banks and fintechs compare?
• Where do leading fintechs have an edge over banks with lending chatbots?
• What chatbot queries should FIs prioritize to win with prospective borrowers?
• What advantages can FIs use to surpass fintech lenders’ chatbot experiences?

Companies Mentioned:

American Pacific Mortgage, Bank of America, Better.com, Capital One, Chase, Cleo Columbia Bank, Intuit Credit Karma, Rocket Mortgage, SoFi, Sun West Mortgage, Wells Fargo