Human-AI Interaction in FinTech: The Prospects and Risks of Using Chatbots as Conversational Agents in Financial Customer Service

Financial institutions are reforming their conventional financial operations to meet customers’ demands through the implementation of AI technology within their operations. The incorporation of AI-driven chatbots, particularly, has garnered momentum for its potential to offer personalized, customer-centric processes in ways that are yet to be achieved by the traditional approaches of financial institutions. Chatbots implement communication between users and AI-trained models, mimicking human dialogue-exchange by conversing in natural real-world language with the user through various channels—such as websites and mobile applications—in the place of traditional face-to-face representative services within the fintech sector. Through a systematic literary review and analysis, the paper provides a comprehensive understanding and extensive explanation of both the benefits and challenges associated with the integration of AI chatbots in FinTech customer service. The paper also identifies and elucidates the specific features and intricate functionalities within chatbots that significantly influence customer and user satisfaction, loyalty, and engagement levels. The study concluded that the prospects of AI-driven chatbots as conversational agents include the enhancement of user-experience through real-time, personalized customer service as well as efficient self-service and feasibility of bank and finance related operations. However, such novel technology possesses limitations to its extent in engaging in authentic conversation. Chatbot use comes with the added risk of plausible misinterpretation of context and exchange of false information and uncertainties surrounding security and protection of data privacy and confidentiality.