As soon as new technology appears, the banking industry wonders if it can be applied to the financial sector. The latest additions are chatbots, which are AI-enabled messaging services. However, can these be utilised successfully? And will customers consider them to be a helpful addition? Patrick Brusnahan writes
The Digital Banking Club’s latest debate, hosted at the majestic St Ermin’s Hotel in London, and partnered with Experian, focused in on chatbot technology and how it could aid banks and their customers.
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Simon Cadbury, director of strategy and innovation at Intelligent Environments, opened the debate by describing the sheer popularity and convenience of the service.
“Chat and instant messaging is incredibly popular – about 2.5 billion of us have at least one messaging app installed on our smartphones and on average we’re spending 20 minutes longer on messaging each day than we are on social networks,” Cadbury says.
“Live chat also has the highest satisfaction levels for any customer service channel at nearly 75%.”
“Instant messaging is also the perfect format for companies testing the waters with bots and artificial intelligence (AI) because conversations are relatively simple and quite structured.”
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By GlobalDataHe continues: “If you want to talk to your bank, imagine being able to go through straight away with all of your information already embedded in the experience.
“The invisible seamless experience is driven by bots and, through that you can place yourself wherever your customers are.”
It sounds perfect: an online programme that allows customers to talk to the bank instantly with no awkward answering of questions or repeating of information. However, a lot of work goes into creating an effective chatbot and it certainly is not as easy as it seems.
“It’s not as simple as sticking a bot on your homepage,” says Terry Cordeiro, head of proposition development, digital and transformation at Lloyds Banking Group. “There isn’t a one-stop shop.”
He adds: “We find that messaging is a more convenient way to communicate, but it’s tricky to make a robot sound human.”
Chris Withers, head of financial services, Europe, at IBM Watson Group, believes that the opportunities presented are limited.
“Bots are not replacing humans, they are offering a different experience. We’re a long way from bots being a banker, but they are ready for first-level support. It’s very use-case-dependent,” he explains.
Wayne Bartlett, chief industry strategist for financial services at Microsoft UK, feels that it is crucial that bots behave like humans.
“We see bots not as replacing bankers but providing a higher level of interaction. People will be able to feel they are expressing themselves naturally,” Bartlett says.
Dhiraj Mukherjee, head of banking innovation at Virgin Money, insists that banks must not get distracted by the wrong sides of the technology. He says: “The red herring is focusing on technology and not the human perspective. There’s lot of opportunity for collective intelligence.”
Adds Cordeiro:“There is a huge chunk of the digital-savvy market not using digital technology. There is a massive opportunity at a customer level, to support disadvantages customers for one, and tonnes of use cases.”
He argues: “We constantly kick ourselves for being behind, but we’re not that behind. There’s a lot of forward thinking in the UK regarding AI.
“This isn’t a thing that you build and then it’s done. It’s constantly evolving.”
Cadbury argues that the UK is lagging behind certain countries, such as China, when it comes to this area. He gives Atom Bank as an example with a bot that has a 65% success rate. The bank want to reach further and hit 85%.
“This is a new emerging field,” Bartlett purports. “The use cases will become apparent. In terms of use cases, everyone is looking outside at customer support. However, focusing on bots that actually make a colleague’s life easier will open them up to bots.”
Mukherjee claims that education through chatbots could make a real difference.
“How do we change business? Teach people about money,” Mukherjee explains.
“Consumers feel safer asking silly questions to bots, where they feel no risk, rather than a human,” Withers posits. “We are playing catch-up in terms of customer-facing bots.”
Bartlett agrees: “There’s a lot of work in making bots understand common and natural language. It’s important we train them in that fashion.”
On the other hand, Cadbury claims that making chatbots too human might be a risky strategy. At the end of the day, people need to be aware that they are speaking to a bot.
He says: “You’ve got to be careful that the bot is not too natural or it becomes intimidating to the customer. Recently, 20% of all tweets related to the US election were bots. There is a dangerous side to this technology. While not only can you have a more casual conversation, but an audited one.”
As an example, Cadbury reminds the captive audience of the hacks to Ashley Madison, the website for potential adulterers.
“Research conducted after the hack revealed that most of the site’s female customers were actually bots. Ashley Madison’s 70,000 fake females were so successful at stringing along male customers that 80% of initial purchases were made by a man trying to communicate with one of its bots,” he adds.
Cordeiro describes: “For the last five years, people have said content is key. Now, I think it’s context. When you get into more complex conversation, we need to get it right. The technology isn’t there right now.”
Mukherjee adds: “From a compliance perspective, it should be much easier.”
“In the regulated world we live in, things need to be monitored,” Withers says.
Bartlett wants to make it clear that the experience should not be too rigid just to suit compliance. He says “If you structure the experience too much, you impair it. The behaviour, at a macro level, will learn from the past.”
While AI and chatbots are considered by many to be a new technology, the financial sector has been using it for years.
“Whether you like it or not, you’re already using AI,” Cordeiro states. “When your card is blocked, it’s not a human doing that. [banks are] riding on that fact that your behaviour has already changed, but there is a fear of the unknown.”
Mukherjee agrees: “AI is not a new thing. It’s in the middle of a renaissance.”
On the fear of the unknown claim, Withers says: “Do people want AI support? Yes. Do they want them to make decisions? No. It’s about getting things done quickly.”
In terms of how the bots sound, Cadbury states: “It’s important the end user knows who they’re talking to.”
On the other hand, Cordeiro argues: “You can’t get people writing copy for websites writing copy for robots.”
Withers adds: “It needs to speak in a certain way. It’s to replicate conversation.”
“For every question, someone in the bank knows the answer, so how do we answer through a chatbot?” asks Bartlett.
“It’s key to start small and start early. Some want a personal experience, some want a Q&A. You need to put it in front of people,” Cordeiro replies.
However, Mukherjee cautioned against too much caution. He says: “We’re dealing with very mature technology and, if we take baby steps, we won’t move quickly enough. We’re missing the boat unless we start now.”
Chatbots can sometimes take the brand of the company they are owned by, but more often, it is given a new name, for example, Apple with Siri.
Withers states: “You definitely need to brand your bot.”
“Branding the bot is a risk management strategy,” Barlett argues. “There are too many brands in some places. Having said that, Cortana runs my life now.”
Cadbury says that brands could have an effect on how consumers view them. He states: “I don’t have any faith in Siri, but a rebrand could change that entirely. In time, banks have to let go slightly of brand. A number of brands will go there and others will follow suit. Bank brands will become less prominent.
“Even if we communicate with our banks directly on messenger, or some other chat interface, we won’t be talking to our bank’s branch staff, call centres and sales reps and the bank’s footprint will be no more than a logo presented on somebody else’s platform.”
“I don’t see chatbots at a mass scale in the next twelve months,” Cordeiro says. “You can put emotion back in the conversation, but the ethics you have as a brand is key.”
Bartlett adds: “The banks are all talking about ethics, especially as I can see people wanting harder conversations with a bot.”
“I think we’ll relook at the definition of ethics,” Mukherjee claims.
“PSD2 and open banking is forcing us to clean up our data at our own pace, which is a good thing. Innovation should be standard delivery,” Cordeiro says.
Bartlett states: “Australian banks were more ready to adopt innovation due to missing the crisis.
“However, with regards to data, I don’t see a lot of people allowing their bank bots to give away their data like Google does.”
He concludes: “You can’t force a bot on anyone.”
