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What is Outlook for chat robots in financial services?

by July 23, 2020No Comments

A superhuman effort. Literally. Because Jim is not human. It is 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 is not human. It is a robot.

Jim is part of an army of AI-powered conversational programs that are changing the way people interact with financial services firms. Other companies that have launched robots include Mastercard, Wells Fargo, Capital One, and many more.

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.

None is ideal. Conversational robots offer an interesting alternative. In theory, they promise the best of human experience (natural conversation) and also the best of digital (instant and convenient).

Although “live chat” agents have been present on desktop sites such as Amazon and eBay for a few years, mobile devices have accelerated the concept. After all, the mobile is "always on" and is a much more natural means of messaging than the PC.

Facebook probably kicked off the mobile AI era when it gave brands the ability to create bots for Facebook Messenger in 2015. There are now tens of thousands on the platform.

Other platforms followed. Robots are now supported on multiple channels such as Twitter is Slack. However, while these channels are popular, they are not universal. That's why SMS has also become a key platform for robots.

In fact, bot messaging is now a growing chunk of an enterprise SMS space worth $ 17 billion in 2016 and $ 58.75 billion expected by 2020 (according to mobileSquared). The emergence of a next-generation form of SMS called RCS - which offers many advanced features - should accelerate this process.

To date, companies are very interested in robots. Ovum's 2017 corporate messaging survey found:

  • Organizations 25% are already using 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.
  • The 72% believes robots 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 repeat, financial services firms 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 queries (which are typically redirected to a human agent).


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.

Hence, the savings could be mind blowing. “Over the next 15 years, the 45% and possibly up to 75% of financial services jobs are likely to be performed by robots,” says Cliff Justice, KPMG's chief consultant. "This should translate into huge cost savings up to 75% for joining companies."

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 is no question that the stakes are higher for banks than others when it comes to AI. In a 2016 report, Forrester advised caution. "Money is an area where people are less willing to put up with mediocre robots," he said.

“If Taco Bell's TacoBot doesn't understand one 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 results in the same person sending money three times or paying a bill incorrectly, the results can be costly. "

However, early evidence suggests that people are warming up to robots. In 2016, the Asia-Pacific bank DBS Bank created a bot for digibank, its mobile-only service. He recently reported that the bot is now handling the 82% of customer inquiries. It appears that as new "challenger" banks like Digibank build customer experiences around robots, caution will not be an option for incumbents.

So, if consumers are ready to embrace robots, then 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 said it was "designed to be not just a virtual assistant but every customer's personal advocate."

At launch, BoA showed how Erica could not only show balances, but detect spending patterns and then suggest different products that could help the customer avoid bank overdrafts or get a higher return on their surplus. In this sense, Erica is not only 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 he has spent on restaurants in the past three months. He can then set a spending limit and set an alert for when he approaches the limit. It is very easy to do this 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 when they want.

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