Without a doubt, 2016 was the year ‘disruption’ became tangible. Events like Brexit, the U.S. election and India’s demonetization exercise brought home the reality we are living in a fast-changing global society where a sense of anti-establishment and rebellion is accelerating change. This shows no sign of stopping in 2017, with new technologies allowing banks to offer service levels more synonymous with hospitality than financial services, and with established technologies like artificial intelligence and robotic process automation seeing a resurgence in combination with new voice commerce models, IoT data, and robo advisors to offer more personal, more contextual and ultimately unique banking experiences for each and every one of us. In meeting with decision-making executives from the U.S to Europe, the Middle East, India and Singapore, I have compiled a clear list of trends that are dominating technology investment discussions across the globe’s leading banks.
No. 1: The Year of the Chatbot - Eliza is all grown up.
2017 will be the year of the ‘BOT’, and undoubtedly several banks will take their first steps towards "conversational commerce," a term originally coined by Chris Messina of Uber to describe the future of messaging within apps. In 2016 we already saw several leaders’ like DBS, Santander, Wells Fargo and Bank of America roll out their chatbots, but 2017 is the year when the rebirth of this very old technology will come into its own.
Let’s be clear…Chatbots are not new, and in the 1950s computer scientists Alan Turing and Joseph Weizenbaum imagined the concept of computers communicating like humans do - developing the ‘Turing Test’ and subsequently inventing the first chatbot program, Eliza. The Turing Test was developed by Alan Turing to test a computer’s ability to replicate intelligent behavior considered to be equivalent or indistinguishable from that of a human. It is no surprise then, that for the financial industry that chatbots are top of mind when looking to reinvent the customer experience whilst also cutting down on costs in job roles ripe for automation. In recent months, the White House has stated that at least 83% of jobs paying under $20 per hour, and 35% of jobs paying between $20 and $40 per hour, are at threat of being taken over by AI technologies like chatbots.
So for those who have been stranded on an island, then you might be asking what exactly is a chatbot? Chatbots are essentially software programs pretending to be people that you can interact with through text or voice. You can talk to these chatbots in your messaging apps, websites or voice enabled devices like Amazon Echo and Google Home, much like you would any other contact in your list, to get the day's investment briefing, find out your account balance or just pay your phone bill.
In the context of conversational commerce, chatbots are becoming the bridge between consumers and businesses and appear to be a good answer for financial institutions to manage millions of one-to-one conversations with their customers. Banks and insurers should look at chatbots as the opportunity to combine intimacy and automation to help them deliver a more personal customer experience.
“Chatbots and Natural Language Generation with advanced Artificial Intelligence are bringing back the B2C dialogue where it’s been missing most: online”
Now before we get carried away and envisage cyborgs eradicating all the bankers in branches and in call centers, it is safe to say that chatbots haven’t evolved to the point where they can completely pass for a real person (yet!), but messaging apps have evolved to drastically improve a part of the business that never quite carried over from brick-and-mortar to mobile/online: sales and customer support. It is only possible now because the technology as a whole has experienced explosive growth and mass consumer adoption, catalyzed by Apple, Google and Amazon. Compared with banking services offered through most social apps, chatbots offer users a more engaged and private communication channel than any social network.
In one chat with a customer, banks can:
• Help someone onboard and make an important financial decision.
• Handle any complaints or concerns personally.
• Upsell or cross-sell their other products.
• Offer contextual loyalty reward incentives.
• Answer questions about “best-fit” financial products and offer alternatives.
• Get customer feedback.
• Provide an investment portfolio update
• Execute a trade to buy or sell shares.
• Apply for a mortgage, personal loan or process an insurance policy.
• Deliver important, time sensitive transaction notifications.
• ...All at the pace of instant messaging.
By combining hands-on service with some element of automation - alert notifications and auto-dialers, for example—financial institutions can manage customer relationships a little easier and with a degree of personalization.
While chatbot AI isn’t yet ‘turing’ enough to become the “face” of the bank’s brand in a sales or customer service role, it is at an inflection point where it can take on some of the many manual and repetitive burdens that come with running a first-line support for business—particularly when that support is executing mundane tasks for marketing and operations. Today, the most effective bots work well because they serve a specialized function, and offer a customer experience that begins with a few options or yes/no questions, before branching off to ask you further detailed questions as required or performing an action based on the information that you’ve provided.
For bankers contemplating how to implement a chatbot in 2017, it is imperative that they think of "conversational commerce" as a way to turn dialogue—the natural back-and-forth exchange of information—into a more meaningful discussion with consumers and businesses. Whilst chatbots are not new, banks should not underestimate the amount of attention, buy-in and innovation needed in developing them effectively, and should look to trusted technology partners who have experience in developing chatbot and NLP solutions. In the world of chatbots ‘first impressions’ are everything, and when you think about it, the sincerest and most special form of engagement a customer can have with its bank or insurer isn't a retweet, a Facebook Like, or even an email opt-in. It’s a conversation.