Chatbots in Banking
What is a Chatbot?
A chatbot (called bot for short) is a computer program designed to mimic conversation with human users on the internet, according to Oxford Dictionaries. Using robotics and Artificial Intelligence (AI), a chatbot can assist customers without the need for a customer service agent on the other end. Chatbots can range from simple to highly intelligent depending on how they are programmed. A rules-based chatbot can only handle very specific commands, while a chatbot that uses machine learning will get smarter with each interaction. Major brands such as Bank of America and American Express are utilizing chatbots on apps like Facebook Messenger to provide customer service through conversational banking.
The Evolution of Chatbots
To understand chatbots, people have to look back to World War II and Alan Turing, the father of modern computer science. He constructed what is known as The Turing Test, also known as The Imitation Game, for gauging how human-like a machine is in a text-based interaction. It’s been a critical part of the development of AI and to this day, it’s used as a standard for testing the value of new technology like Google Duplex, an AI system that conducts natural language conversations over the phone to execute on real-world tasks such as booking appointments.
Customers started to see chatbots in banking in the early 2000s through text messaging. These bots could do simple tasks like show an account balance when given a specific command. Now, AI vendors like Abe are making chatbot interactions about banking as natural as chatting with a friend across platforms like Facebook Messenger, Slack and in banks’ mobile apps.
How can Chatbots be Used in Banking?
Messaging apps such as WhatsApp are now the preferred method of interaction on mobile devices. There are more than 100,000 bots on Facebook Messenger and just as many offered on WeChat across various industries. The banking industry is changing the customer experience by utilizing these platforms and chatbots.
Bank of America’s chatbot Erica can take commands via type and voice command and perform functions such as scheduling a payment and exploring recent transactions within their app. Erica is expected to have predictive skills as well in order to lead customers to better financial health. Capital One has a similar text-based chatbot that allows customers to manager their money via text message, including actions like viewing payment history and pay a credit card bill. Mastercard utilizes a bot on Facebook Messenger, which does many of the above-mentioned functions, but also provides updates on cardholder benefits and notifies users about offers.
The Future of Chatbot Technology
As chatbots continue to become more advanced, customers will see a shift in focus from mobile banking to conversational user interface (CUI) in banking. In order to be on the cutting edge, banks need to have a conversational banking strategy.
A conversational banking strategy should include investing in the right human talent with skills in artificial intelligence development and natural language processing experts, who can keep up with technological advancements and actively integrate them into existing tools. Concurrently, banks will need an increased focus on digital security to protect sensitive information. This could include investments in voice biometrics to verify that the customer is talking to the bot and not a stranger who has their phone.
Envestnet | Yodlee and Chatbot Technology
Recently, Envestnet | Yodlee launched AI Fincheck, an award-winning AI based FinApp designed to guide consumers to the path of financial wellness. This revolutionary financial assistant measures and monitors consumers’ financial health while delivering personalized insights and recommendations to help people reach their financial goals. For financial service providers, AI Fincheck helps optimize customer experience, maximize engagement and increases share of wallet. Learn more about it here.
Yodlee’s enterprise data management solution, Envestnet Envision™ solves several commonplace data problems for consumers by combining intelligent data with machine learning and analytics to offer holistic, personalized insights for advisors, bankers and their clients. Envision IQ is a new tool the gives financial advisors, wealth managers and bankers
answers to real-time business questions via Envestnet Analytics on desktop, mobile and voice-enabled personal assistants such as Amazon’s Alexa. Daily updates provide quick insights on user data such as recent proposals and cash opportunities. Learn more about Envision IQ.
These solutions are designed to help consumers become better stewards of their finances while helping financial providers save money and offer more insight than ever before. By becoming more engaging, offering better service and learning from the data, financial institutions and advisors can measurably improve their business.