What the rise of chat bots means for financial services
Chat bots. They’re everywhere from ordering a takeaway to medical diagnosis to finding your soulmate- and the Financial Services industry has not been left untouched. These virtual assistants can create a real-time dialogue with users that is personalised to their needs and effective in solving a given problem. Below highlights examples of how chat bots can act to shift companies from a service provider to so much more. Furthermore, with so many desirable benefits, the risks involved and how best to approach chat bots in the FS industry must be carefully considered!
Be the adviser
ClearScore have developed a credit checking service known as “Coaching” intended to help millions of people improve their credit score. The bot suggests practical small changes in order to improve your financial future, whether you’re a young person with little credit history, someone with a damaged credit score or just someone wanting to improve their financial situation. This chat bot seems fairly safe as it does not automate any financial functions but just advises instead. However, there are so many factors affecting how someone should approach their money so who’s to say ClearScore can make these assumptions for the individual? Will this one-size-fits-all approach make users feel herded instead of guided?
Be the assistant
RBS’ addition to the chat bot market is “Luvo”- a web chat tool aiming to help online customers with resolving their queries. While this use may not be the most ground-breaking, it’s now become an expectation in retail banking. With the element of Artificial Intelligence, “Luvo” will be able to adapt over time, taking on more complex customer problems by learning from their behaviours. A limitation from this learning aspect is that Luvo could miss out on possible opportunities to sell new services as it can never fully assess all the user’s needs.
Be the admin guru
Sage launched their chat bot “Pegg” which is used to track spending, record receipts and access accounts with ease. You simply message in with your expenses and it automatically logs it for you. You can ask the bot questions such as “Who owes me money? And when did I last remind them?”. Pegg positions itself as a helping hand to the Small-Medium Businesses that still rely on manual financial processes and allows them to compete against enterprises with fully implemented cloud solutions. A grey area with this, is Sage’s accountability if a detrimental error was made- are the SMB’s having to invest a lot of trust into a third-party platform?
Be careful!
From the varying examples, it’s evident the popularity of chat bots is booming. However, Forrester (2016) found that although chat bots are developing rapidly, customer experience is not. Many fail to effectively meet users’ needs due to poor infrastructure and lack of fundamental understanding of AI. Chat bots are still in their experimental stage and although this may be fine when TacoBell’s chat bot mistakenly delivers 100 tacos to the wrong address, these mistakes incur far more serious consequences when it comes to peoples money! Forrester also suggest that the FS industry will not be the driver of change but should instead spend 2–3 years developing the digital foundations behind AI and only then consider bringing a chat bot to the market.
My suggestion for those looking to enter the Financial Services chat bot market, would be to consider the risks associated. There’s so much appetite for chat bots, but it’s worth being mindful of the infinitely many outcomes when a human and machine interact. When it comes to finances, these chat bots shouldn’t just avoid falling at the first hurdle, but should avoid falling at any hurdle! Speed to market isn’t necessarily the driving success factor, but a carefully developed solution is. If a company can truly harness the skill whilst also fully safeguarding any risks, then these chat bots have the potential to deliver tremendous amounts of value to the customer, the business, the economy and society as a whole.
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