Although chatbots have been on the scene for a while now, 2016 was the year when a number of big financial firms, including MasterCard, Bank of America, RBS and American Express, announced their plans to launch chatbots.
These chatbots should allow users to perform simple tasks such as transferring money and checking their balance, allowing users to ask questions and receive financial advice without the need to go to the bank. What is most exciting to many is the fact that “bots” provide companies with new distribution channels and can decrease the cost of customer communication.
As exciting and progressive as the changes made in AI technology are, can we be sure that chatbots are the future for financial services?
What is the current landscape?
Similarly to Apple’s Siri, chatbots are powered by software that allows them to extract data and present it to the user in a clear, human-like way. They can be standalone apps that users have to download or be embedded within existing apps such as Messenger.
The key advantage chatbots have is their ability to compute and perform complex calculations within seconds. In financial services, they can help customers check their balance and spending limit, evaluate their spending habits and monitor their credit score. Chatbots offer greater convenience, allowing users to access a number of different services with a single application; time is saved both for customers and customer services teams.
Although chatbots are being touted by many financial institutions, many are still in the development phase. There is good reason for this… In August 2016, a report by Forrester suggested that banks should focus on developing the AI technology to build better bots in the future, rather than launch bots on messaging platforms now and provide poor experience to their users.
For example, neither Bank of America’s Erica, nor MasterCards’ Kai are available to customers, and their specific release date remains unknown. The initial versions planned to be released will only be able to perform basic tasks, but both companies have major plans for the future of their chatbots; the vision is for them to become fully-automated financial assistants. Bank of America’s Erica is said to even be able to move money between accounts and provide users with advice on finance and paying off debts, with savings management being one of its built-in features! This could most certainly be a game changer for AI.
However, what will probably be even more exciting for consumers is the push for unbiased chatbots that are not affiliated to any single financial institution; chatbots that provide ‘fair’ and balanced advice to users, recommending the services of the company which offers the best rate and terms for the required service.
The importance of the human touch
Despite the many benefits that chatbots can bring to companies as well as their users, they are accepted with mixed opinions and sometimes scepticism. The main criticism against chatbots is that they lack the empathy and the emotional response that a human can provide, which makes them less capable of dealing with complex situations involving financial decisions.
Generally speaking, humans working in customer services will know how to respond to frustrated customers and not aggravate the situation; they can listen, reason, empathise and read between the lines. A lack of emotional intelligence is a serious limitation that existing bots have. As it stands, bots can only be used for low-key repetitive tasks that do not require high level of empathy and interpretation.
With this in mind, when can we expect to chat with bots?
Today’s bots may have passed the stage of being simple algorithms, but they haven’t yet reached a stage where they can be described as being similar to humans in terms of their communication and problem solving abilities.
Although interest in automated technology is growing and bots are generally seen as good in handling simple customer requests, for highly regulated industries such as financial services the technology is not at the necessary level to deliver the desired results.
In the world of finance, this represents an even higher risk, as at the end of the day it is people’s money we are talking about.