Financial Institutions Chatbots

How Financial Institutions Can Boost Engagement With Chatbots

When it comes to the fintech world, bots have already found their way into a few basic functions with apps and some forward-thinking financial institutions, but they have a lot more potential. They can help your customers with basic information and tasks, such as opening an account, making mortgage payments, and even finding an ATM. But there are downsides as well, and fintech professionals and bot developers would do well to consider them. Will the bots be too impersonal and turn customers off? What if a bot misunderstands a question and processes a larger payment than was requested? How easy is it to hack into a bot, or trick one after identity theft? Bots are here to stay, and are going to grow in their use and acceptance in the fintech world, and many others. Chatbots are not only a money-saving automation tool, they can automate simple tasks, such as opening a new account or transferring money from one account to another.

Better still, there's no need to create a separate chatbot app; these can run on your existing websites, so they're readily available when customers visit your site for assistance and information. Of course, one of the challenges with a conversational/chat interface is that a customer may ask questions that break the system. If you ever played with the Eliza computer therapist game, you know how easy it could be to flummox that program. While today's chatbots are/will be light years ahead of Eliza, there are still ways to break the bot and necessitate a reboot. This means you would have to start with specific tasks it could do, such as processing an account application, or completing a bill payment.

This also means the bot needs to have a wider understanding of language, since people use different words to describe the same process. (And it will be even harder, once we move to a voice-activated chatbot, and the system tries to understand different voices, pitches, and even accents.) There are also a range of exciting innovations companies like Envestnet | Yodlee are integrating into their environments to further power the bot experience, based on data analytics, artificial intelligence, and machine learning. Imagine a consumer opens up her banking app, and is interested in buying a $200 pair of shoes. This scenario illustrates how actionable data and insights are used through descriptive analytics, predictive analytics, and prescriptive analytics.

  • Descriptive: Our consumer asks, "What's my checking account balance?" She does the mental math to figure out if she can afford the shoes, or if it will hurt her immediate financial plans, and makes her decision based on this simple question and answer.
  • Predictive: "Can I afford to spend $200 today?" The bot, with the internal financial data, creates a forecast based on historical recurring income and financial obligations. The system can look ahead to the next couple weeks, and let her know what impact the $200 purchase will have. Predictive analytics is one area that Envestnet | Yodlee is putting a lot of work into.
  • Prescriptive: "Should I buy these $200 shoes?" This is where the bot acts as a financial coach. At this point, the bot will understand insights about the consumer and her behavior, people just like her, and the long-term financial goals she's trying to achieve. The bot will tell our consumer, "that will impact your budget for the month, would you like me to give you a couple options on how you can save money?" The bot could even see our consumer's location, and could find where the shoes are being sold for less, or even locate a coupon to help reduce the price and make the purchase less impactful on her financial situation.

Financial institutions that want to boost their engagement with chatbots need to build or partner with vendors who can develop the machine learning-based systems that will continuously analyze data that creates insights that drive personalized financial conversations with their end users. To learn more, register for this on-demand webinar: Boosting consumer engagement with next gen chat bots hosted by VentureBeat and Envestnet | Yodlee.