Chatbots and Virtual Assistants set to take over Banks' Client Interaction
Dec. 06, 2016
Chatbots as a means of customer interaction are taking the banking sphere by storm with more bots being launched every week. Established financial institutions, mostly in the retail-banking sector but also in the investment management and wealth management sectors, are jumping on the wagon and experimenting with bots. This is a main finding of the report, “Chatbots for Banking and Wealth Management 2016: Why financial institutions should employ virtual assistants”.
We screened more than 100 established banks and wealth managers in order to identify, analyze and profile the 35 most advanced and innovative chatbots today. Additionally, the report evaluates state-of-the-art chatbots by nine FinTechs and challenger banks and as well the offerings of eight B2B bot developers. The report provides a comprehensive overview of the current landscape for chatbots in financial services, investigating what drives the development of bots and identifying the leading chatbots and what they offer.
Bots are here to stay and are already able to take over critical functions
In MyPrivateBanking’s view chatbots are clearly not a FinTech and challenger banks only thing. In fact, with almost two-thirds of the bots in our sample being bots from established institutions, we find that banks have embraced this trend. We expect that, within five years, bots will replace conventional online interfaces like websites or mobile apps to a substantial degree across the financial service sector.
The report investigates on which channels institutions offer chatbots, how functionalities differ by target group and which public platforms will soon be the dominant provision channels for bots. The research also identifies the degree to which bots on the market have advanced AI capabilities.
Bots are already taking over critical tasks in the interfacing with customers but their potential is more far-reaching. The report shows to which extent and, with which functions, bots are used for customer service, financial advice, personal finance/money management, transactions and content curation.
Compliance issues relevant, but no excuse for late adoption
In MyPrivateBanking’s assessment the regulatory landscape in the financial industry on issues of compliance and accountability in the bot sphere is not yet clear. The analysis investigates how many bots have gold standard security measures in place and concludes that financial institutions should improve their measures to comply with regulation and security concerns. The findings also include insights on how institutions can best assure high security and compliance when launching bots.
In our assessment bots, by their very nature, making mistakes at the beginning. This is very natural component of the machine learning process and cannot be avoided. However, banks that decide to ‘play it safe’ and to launch bots only in a few years down the line will still need to go through this process. This means that their bots will never be able to compete with the ones that were out there much earlier. The report provides further insights are given as to the tradeoffs involved in choosing when, where, and how to launch a bot.
Bots will change and enhance the client interaction and communication
Different target audiences and use cases will require different kind of bots. Banks and wealth managers should therefore critically assess their current and future client base. The report details the Dos and Don’ts for financial institutions interacting with their clients through bots and presents case studies of state-of-the-art bot applications and promising use cases.
Banks and wealth managers should make sure that bots are available on different platforms, such as the website/app in addition to a public platform like Facebook criteria. The report weights the criteria when opting for bots for public platforms or proprietary channels and makes clear recommendations as to when each can be used to greatest effect.
Finding the right partner and top security are key elements of successful chatbots strategy
Banks and wealth managers should make sure to find the right implementation partner who is not only able to provide excellent user experiences but is also able to deliver the right chatbots for each target audience. The report offers recommendations on what to look for in a vendor for chatbots and presents eight profiles of B2B chatbot vendors and their offerings.
Together with implementation, partner institutions should consider the different security threats a chatbot can have on the company and address them by putting in place the highest level of security necessary. Further detailed information on these topics is provided in the report – together with an overview of measures to take to ensure that bot behavior does not get out of control.
About the report: The report “Chatbots for Banking and Wealth Management 2016: Why financial institutions should employ virtual assistants“ is based on the analysis of the chatbots and virtual assistants currently offered by 44 established institutions, FinTechs, and challenger banks around the world and as well the offerings of 8 bot developers. The report details how bots will change and enhance the client interaction and communication and provides data and recommendations on how to chose the right bot, platform and implementation.