LONDON, Thursday 29 May 2025 – New research from the LSB (Lending Standards Board) has revealed significant disparities in customers’ experiences across financial services providers’ ‘webchat’ services – including key differences in experience between webchats supported by AI tools and by humans.
The LSB’s study, carried out by ESA Retail, was conducted via 190 mystery shopping customers, who were asked to assess their experience with the webchat services of ten financial services providers, from large high street banks to online lenders.
Webchat services have become a ubiquitous feature of financial services providers’ customer support toolkits, and comprise both ‘live chat’ services (text conversations with a human customer service colleague) and ‘chatbot’ interactions (conversations with an artificial intelligence or data-based machine).
The research found that 59% of customers who communicated through an AI-driven chatbot found the interaction unhelpful or very unhelpful. Nearly half (46%) of customers using a chatbot said they were not confident in the next steps or support available to them. In contrast, 82% of customers who spoke to a ‘live’ agent said they felt confident following their interaction, while 77% described their experience as helpful or very helpful.
Chatbots were also less effective at picking up on particular customer circumstances: 74% of live chat users said they felt their circumstances were understood; just 35% of chatbot users said the same. Meanwhile, 50% of customers using live chat felt that indicators of vulnerability were addressed, compared to just 31% for chatbot users.
Flexibility in communication emerged as a key determinant in whether the customer outcome was positive or negative. For instance, 89% of excellent mystery shopping experiences were linked to a webchat which allowed free-flowing dialogue, while 74% of poor experiences were associated with fully templated interactions (as were 45% of ‘very poor’ experiences).
Anna Roughley, Deputy Chief Executive of the LSB, says: “When seeking support from their financial services provider, customers want to communicate freely, be understood, and quickly access the right help. When they can’t do that, it limits the chances that they’re able to access the right outcome for their situation – it can even stop them from trying to find help again.
“Webchats are a common – and often useful – feature of financial services providers’ websites, but customer experiences can be uneven. This is particularly the case when webchats rely on AI or templated interactions. There is a positive role for chatbots to play, but providers need to adapt to their limitations. It should be clear up front what a chatbot can or can’t do, and there should be clear signposting to where a customer can get help if a bot isn’t able to provide the right support on a consistent basis.”
Anna Roughley adds: “The inability to freely explain their issue was a common frustration with those using chatbots as they are currently deployed. With significant leaps in AI technology in recent years, particularly the development of Generative AI, there is a growing opportunity for financial services providers to use AI to offer customers the free-flowing webchat conversations they find most useful. Whatever happens next, it’s vital that customers are the primary consideration – and that tech continues to deliver better outcomes, not block them.”
Spotting financial difficulty and offering support
The research found that live chat interactions were more likely to identify and respond to signs of potential financial difficulties, as opposed to chatbot services. Almost three-quarters (73%)of customers using live chat felt indicators of financial difficulty were picked up on, dropping to 57% in chatbot interactions.
Key features of effective webchat support
The LSB’s research outlines six features that drive effective webchat communication:
- Customers value flexible communication – with ‘free flow’ webchats performing much better than those relying on templated answers.
- Customers want to be understood and for the webchat to pick up on what they need.
- Customers want prompt access to the right help – which means it’s important that they are signposted to alternative support if a webchat can’t provide what’s needed.
- Customers want to know what to expect from webchat interactions, so they don’t spend time trying to use something that can’t help them.
- Customers need the right support regardless of their circumstances – so webchats must be able to pick up on the nuances of the situations customers find themselves in.
- Customers want services which are easy to find – just under 90% of experiences rated ‘good’ or ‘excellent’ involved a webchat that could be found in one or two clicks.
The full report can be found here.
