A superhuman effort. Literally. Because Jim isn't human. He's a robot.
In January 2017, a client agent named Jim set a world record for paying a claim on behalf of insurance start-up Lemonade. It took Jim just three seconds to cross-refer the complaint with the customer's policy, run anti-fraud algorithms, and send wiring instructions to the bank.
A superhuman effort. Literally. Because Jim isn't human. He's a robot.
Jim is part of an army of AI-powered conversational programs that are changing the way people interact with financial services companies. Other companies that have launched bots include Mastercard, Wells Fargo, Capital One, and many others.
Chat bots have emerged out of dissatisfaction with how customers find answers to important questions. Historically, consumers had three basic options: visiting a physical location; call an agent; browse a website / app.
No one is ideal. Conversational bots offer an interesting alternative. In theory, they promise the best of the human experience (natural conversation) and also the best of digital (instant and convenient).
While live chat agents have been present on desktop sites like Amazon and eBay for a few years, mobile devices have accelerated the concept. After all, mobile is always-on and a much more natural messaging medium than a PC.
Facebook arguably kicked off the mobile AI era when it gave brands the ability to build bots for Facebook Messenger in 2015. There are now tens of thousands on the platform.
Other platforms followed. Bots are now supported on multiple channels such as Twitter is SlackHowever, while these channels are popular, they aren't universal. That's why SMS has also become a key platform for bots.
Indeed, bot messaging is now a growing segment of the enterprise SMS space, valued at $17 billion in 2016 and projected to reach $58.75 billion by 2020 (according to mobileSquared). The emergence of a next-generation form of SMS called RCS—which offers many advanced features—is expected to accelerate this process.
To date, companies are very interested in robots. Ovum's 2017 corporate messaging survey found:
- 25% of organizations already use bots to interact with customers.
- The 92% of organizations that use bots do so to automate customer-facing functions.
- The 88% uses them to reduce churning.
- The 84% uses them to reduce backend costs.
- 72% believes that bots are cheaper and more effective than apps.
By 2020, there could be 3.18 billion global monthly active mobile unique chat app users.
And, to reiterate, financial services companies are leading the charge. One reason is that bank customers tend to ask the same broad set of questions:
What is my balance?
How much did I spend?
What is this charge for?
These questions are, in theory, easier for a bot to answer than multiple open-ended queries (which are typically redirected to a human agent).
Eye-popping
While robots offer customers quick answers on platforms that are convenient for them, they also bring radical new efficiencies to banks. Robots don't need a salary, vacation, or insurance. They work 24 hours a day.
So, the savings could be staggering. "Over the next 15 years, it's likely that 45% and perhaps up to 75% of jobs in the financial services industry will be filled by robots," says Cliff Justice, head of consulting at KPMG. "This should translate into huge cost savings of up to 75% for companies that join."
Juniper Research predicts that healthcare and banking savings could be $ 0.70 per interaction. That's over $ 8 billion a year by 2022.
But will customers resist? There's no doubt that the stakes are higher for banks than others when it comes to AI. In a 2016 report, Forrester advised caution. "Money is one area where people are least willing to tolerate mediocre robots," it said.
“If Taco Bell's TacoBot misunderstands a person's request and orders three tacos instead of one, the results are unlikely to be catastrophic. If, however, an interaction with a bot accidentally leads the same person to send money three times or pay a bill incorrectly, the results can be costly.”
However, early evidence suggests that people are warming to bots. In 2016, Asia-Pacific bank DBS Bank created a bot for its mobile-only service, Digibank. It recently reported that the bot now handles 82% of customer inquiries. It appears that as new challenger banks like Digibank build their customer experience around bots, caution will no longer be an option for incumbents.
So, if consumers are ready to embrace robots, the question is: how much deeper can the relationship go? Can robots do more than answer the same selection of common questions?
Many think they can. In fact, when Bank of America unveiled its Erica bot in 2016, it stated that it was "designed to be not just a virtual assistant but a personal advocate for every customer."
At launch, BoA demonstrated how Erica could not only display balances, but also detect spending patterns and then suggest different products that could help the customer avoid overdrafts or earn a higher return on their surplus. In this sense, Erica is not just a customer agent, but also a sales representative.
Meanwhile, Mastercard's Facebook Messenger bot (available to issuer banks) allows users to drill down into spending types. Kiki Del Valle, Senior VP of Commerce for each Mastercard device, says:
A customer can ask the bot how much they've spent at restaurants in the last three months. They can then set a spending limit and set up an alert for when they approach the limit. It's very easy to do in a natural language chat session.
Obviously, the long-term success of robots depends on the naturalness of communication. Nobody wants to be harmed by a well-known artificial intelligence. And people won't forgive when a robot makes silly verbal mistakes.
This may be why text bots, as opposed to voice bots, are a preferred option. Text sessions are asynchronous. Users can also archive conversations and return to them whenever they want.
