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Can chatbots delight banking customers?

Chatbot technology allows banks and financial services companies to cut costs and scale up. However, there are plenty of challenges to overcome, says Simon Cadbury.

Chatbot technology allows banks and financial services companies to cut costs and scale up. However, there are plenty of challenges to overcome, says Simon Cadbury.

Can chatbots delight banking customers?



17th March 2017

Simon Cadbury

Chatbot technology enables banks and financial services companies to cut costs and scale up to offer customers a personalised and always-on service. Yet, there are plenty of challenges to overcome, not least comprehending customer attitudes towards this emerging technology, and establishing how best to integrate it to enhance the service.

One of the key obstacles to acceptance is that many of the current crop of chatbots have created disappointment, frustrating customers by failing to set expectations or by acting in unexpected ways. Furthermore, despite all its intelligence, a bot can’t empathise or understand emotions, so will ignore a customer’s frustration when an error occurs, which creates the risk of eroding goodwill and trust in the brand.

There is also growing concern regarding the loss of jobs, particularly semi-skilled roles. A recent research study estimated 250,000 public sector jobs could be lost in the next 15 years to bots. It’s important to highlight that we are still very much in the learning phase and don’t yet know if the technology will ever be able to completely replace humans.

Inherently, bots require humans to train them, which involves a trial and error process. RBS’s new bot, Luvo, started out answering a mere 20 questions with a 10% success rate, whereas now it’s answering 400 questions with 90% success. This takes the time and patience of staff and customers.

While there are many considerations, the upside potential is significant. Just as banks adapted to technological shifts by making themselves available over the phone, on the internet and on smartphones, they must now add chat and messaging to their omni-channel strategies. Here are a few guidelines for integrating chatbots:

Focus on narrow use cases

Start simple – identify narrow, well defined niches (RBS’s Luvo has started on SME banking). Be ready to learn, identify what works, what consumers want, how they ask questions and how they feel about dealing with AI.

Start with messaging

Start with existing messaging or conversational processes such as FAQs, 2-way SMS or Live Chat, and evolve into the more difficult area of chatbots when you have a firmer footing.

Use humans as a backup

Ensure humans are in place to quickly take over chats within the context of the conversation or previous customer engagements, so that mistakes can be corrected immediately.

Support real-time info and actions with back-end data

Chatbots, along with virtual assistants and other digital services, are far more effective when they have access to real-time data and systems of insight.

Embrace APIs

Banks that recognise the value of APIs (application programming interfaces) will be in a better position to draw in new data sets and third party functionality, therefore adapting to shifts in the chatbot and messaging landscape.

Don’t try to be human

Bots aren’t yet close to being human-like, and pretending they are will set expectations you can’t deliver on. Focus instead on what bots are good at.

Bot technology is here, as is the human expertise to assist banks with the integration and utilisation of the upgraded service. We expect to see a quickening in the pace of adoption and effectiveness of machine learning and chatbot technology in organisations with financial services platforms. We don’t see them as a standalone solution; rather a part of a company’s larger portfolio of digital touchpoints. The winners will be those that place the customer front and centre in their planning processes, and remain agile in their responses to the inevitable further digital disruption.

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