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Conversational AI Chatbots Help Nigerian Banks in Fraud Prevention

On July 10, 2024 | 7 Minutes Read
BFSIConversational AIConversational EngagementCXFintechWhatsApp Business APIWhatsApp Commerce

More than 3 billion users in Nigeria choose online transactions and digital banking services over traditional methods. 

However, this globalization comes with a growing threat of fraudulent and phishing activities. These activities are restricting banks from delivering a smooth and secure customer experience. Thankfully, the answer may lie in switching to AI and chatbots.

Conversational AI chatbots offer a safe, user-friendly solution for fraud prevention and give a convenient customer experience. AI chatbots send you messages via your daily messaging apps like WhatsApp – so, easy accessibility and personalization. They analyze your banking activity in real-time, notifying you about unusual purchases or transfers from undetected locations.

While Nigerian Banks are using AI and adding AI chatbots to their Fintech scene and helping over 58% of customers, here is how they can create a safer banking experience with Conversational AI.

Why Conversational AI Chatbots are Needed for Fraud Prevention?

Nigerian Banks tend to personalize their experience and make it better with Conversational AI chatbot service providers. Choosing some popularly used platforms like WhatsApp Business API, RCS, and other channels can only make communication smoother.

Gupshup’s Conversational AI chatbots are specifically designed to work within the WhatsApp Business API framework. They utilize artificial intelligence to understand user intent, respond to inquiries, and complete tasks within the WhatsApp chat interface. These chatbots are programmed to:

Distinguish Suspicious Activity: 

By analyzing transaction patterns, location data, and user behavior, the AI chatbots can identify underlying intent that might indicate fraud attempts. For example, if a customer types “I lost my card,” the chatbot can recognize the urgency and need to report a lost card to the bank even if the customer doesn’t particularly mention locking it.

Maintain Accuracy: 

Conversational chatbots maintain accuracy by leveraging NLP to interpret user queries and understand language nuances, including tones and intentions. This enables them to deliver precise and contextually relevant responses, even in complex conversations. 

AI Chatbots continuously learn and improve their accuracy through interactions, optimizing performance with data analytics and machine learning across messaging platforms like WhatsApp.

AXIS Bank Chatbot experience

Identifying Scam Attempts:  

NLP (Natural Language Processing) capabilities in Conversational AI chatbots allow the chatbot to inspect the customer’s messages for suspicious language patterns. If it detects a potential scam attempt, it can flag the interaction and prevent sensitive information from being disclosed.
Identifying Scam Attempts

Verify transactions: 

The Conversational AI chatbots on WhatsApp API can also request real-time confirmation from bank users for high-value transactions or unusual activities. This adds an extra layer of security and empowers customers to stay informed.

For example, if a customer’s WhatsApp Business API chatbot notices an unusual amount being deducted from their bank account, it can inform them directly about the transaction by giving you two more options: ‘Yes, it was me’ and ‘No, this is a suspicious activity’. 

Banking Chatbot

Now if the customer selects the second option, the AI chatbot can escalate this situation to the bank to look into the matter so their money and related bank details remain safe with them.

Educate customers: 

From time to time, the Conversational AI chatbot service provider can send customers awareness messages on WhatsApp. This aims to educate them on common fraud tactics and best practices for secure banking. 


Banking WhatsApp Chatbot

Conversational AI Chatbots in Fraud Detection: Transforming Nigerian Banks

Nigerian banks can integrate conversational AI into their digital banking landscape, overcoming constraints in omnichannel messaging. Specifically, employing conversational AI chatbots via the WhatsApp Business API provides a secure and convenient avenue to counter fraud while enriching the customer experience.

Conversational AI chatbots can revolutionize fraud detection within Nigerian banks by leveraging advanced technologies to identify and prevent fraudulent activities. Below are some possible ways to look at:
Conversational AI chatbots can revolutionize fraud detection within Nigerian banks

Multi-Factor Authentication (MFA) for Added Security:

Conversational AI chatbots can play a crucial role in multi-factor authentication (MFA) by enhancing the user verification process and ensuring added security. These chatbots can be integrated into the authentication flow to interact with users conversationally, making the authentication experience more user-friendly and engaging.

For example, a customer clicks on a website’s page to buy something that requires a huge transaction. When the bank redirects them to their WhatsApp Self Serve chatbox, they might need to authenticate before clicking a ‘yes’. This added benefit can truly help them stop losing their money on fake websites.

Security Questions for Sensitive Information

AI chatbot can help Nigerian Banks help customers access their sensitive information on their phones by pre-set security questions they have established during account setup. These questions might be: their favorite color, or city of their birth, etc. Upon answering correctly, only then the chatbot will provide the card number to the customer. 

The AI chatbot can also mask the card number for customer security, displaying the last four digits of the card for reference, or it can send a temporary OTP to the customer’s registered phone number for additional verification before displaying the full card number.

Banking Chatbot

Escalation Triggers for Suspicious Activity

The Conversational AI chatbot is programmed to identify suspicious messages containing such links. If the customer clicks the link within the chat, the chatbot automatically triggers an alert for investigation. The bank can then reach out to them to confirm the legitimacy of the message and take appropriate action.

For example, a customer receives a WhatsApp message claiming to be from his bank, urging you to click a link to “update your account details” to avoid service disruption. If it is a phishing activity, then his bank will be immediately alerted once the customer clicks on the link.

Dedicated Customer Support for Complex Issues

The chatbot can guide the customers through basic steps like blocking their lost cards, resolving any bank account-related issues, or applying for another card. WhatsApp AI chatbots are built in such a way that they can easily understand the depth of the concerns and connect the user with a live customer support agent immediately. This agent can further address the concerns, investigate the suspicious activity, and help recover any lost funds.

 

GS Bank

User Feedback for Continuous Improvement

The personalized Conversational AI chatbot gathers customers’ feedback on WhatsApp every time it finishes the task. The customers can rate them on their performance in identifying and resolving suspicious activities for them. This user feedback is used to refine the AI model, improve its ability to detect fraud in the future and enhance the overall user experience of the bank.

Conclusion

Implementing AI chatbots for fraud detection presents Nigerian banks with an opportunity to fortify their security measures and enhance customer trust. By leveraging AI algorithms, banks can monitor transactions in real time. These chatbots can swiftly identify suspicious patterns and anomalies, enabling banks to promptly intervene and prevent fraudulent activities. 

Moreover, AI chatbots can enhance customer engagement by providing instant alerts to customers about potential fraudulent transactions, fostering trust and satisfaction.

In this landscape, Gupshup‘s Conversational AI services emerge as a transformative solution for Nigerian banks. Gupshup specializes in developing AI-driven chatbots tailored for banking needs, capable of not only detecting fraud but also improving overall customer experience. 

By deploying Gupshup’s advanced Conversational AI, banks can augment their fraud detection capabilities while optimizing operational efficiency and customer satisfaction. This strategic integration of technology can position Nigerian banks at the forefront of innovation, safeguarding financial transactions and fostering sustainable growth.

Vartika
Vartika leads marketing at Gupshup and has ~16 years of experience in marketing across early-stage startups and large enterprises. A Marketing specialist by profession, a wanderer at heart, an enthusiastic cook, and a painter for the soul.

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