Enabling Technologies

The Chatbot Deployment Strategy - Exclusive Study of 42 Banks

MEDICI

In their quest towards superior customer experience, streamlined operations, and lower costs, banks are increasingly looking towards modern tech innovations. Artificial intelligence is one such tech marvel which has the potential to transform the way banks and financial institutions engage with their customers. With the adoption of messaging and social media platforms growing by leaps and bounds, banks and FIs now realize that the crux of their business is built around conversations, and not just around transactions. Thus there seems to be a wave of sorts among leading banks across the globe to launch their own chatbots.

The conversational interface of intelligent chatbots has a variety of advantages – efficient customer service, process excellence, reduced time-to-response, reduced call center cost, etc. Chatbots have a great potential of driving efficiency gains across the financial services industry as Oracle claims that chatbots could save $174 billion across insurance, financial services, sales, and customer service.

An intelligent chatbot can be broadly categorized into three major brackets – Informational, Transactional, and Advisory. In a way, these three brackets can also be considered the stages of a chatbot’s evolution. From customer service to transactions and then to recommendations, banking chatbots are evolving, albeit the evolution is at the elementary stage. For most banks, the hara-kiri to launch their own chatbots looks more as a jump-on-the-bandwagon sort of move – a conscious ploy to stay relevant.

With the growing traction of voice-enabled devices and smart home hubs, select banks and FIs are also looking to augment voice banking capabilities in their chatbots’ arsenal. Bank of America’s voice-enabled digital assistant ‘Erica’ is a good example of a native chatbot with a voice capability hosted on the banks’ mobile app/online channels. Several other banks have integrated leading voice assistants, i.e., Siri, Alexa, etc., and now provide voice banking services through them. The range of capabilities of these voice assistants includes account balance inquiries, credit card payments, utility bill payments, and P2P payments.

As part of a recent study, we conducted a deep-dive on the chatbot initiatives of 42 major banks and FIs across the globe and analyzed their channels of deployment. While 27 of these 42 banks and FIs have deployed a native chatbot on their mobile/online channels, 17 banks and FIs have deployed their chatbots on Facebook messenger (e.g. American Express, ING, RBC, etc.). It was noteworthy to see that other prominent messaging/social media platforms – Twitter, Slack and WhatsApp – were significantly behind in this adoption race as only five banks/FIs/large FinTechs leverage these three channels for their chatbot deployment. A few examples include TD Bank (Twitter), Axis Direct (WhatsApp), and PayPal (Slack). 14thMay2018_MondayResearchCharts_v2-25.jpg

Out of these 42 banks and FIs, 13 banks have added voice banking capabilities to their arsenal. While Apple’s Siri is used by the most number of banks (five) for their voice banking services, four banks have developed their own Amazon Alexa skills, using which their customers can conduct voice-based transactions. Four banks have developed their native voice assistant which is deployed on their mobile/online channels. A couple of examples include Santander and Bank of America. Google Assistant is relatively lagging in this adoption race and has integrated with two banks to provide voice banking services to their customers. Interestingly, a few banks have deployed voice assistants on more than one channel. E.g. Ally Bank (Alexa Skill as well as a native voice assistant called Ally Assist).

As the gamut of conversational engagement expands with the evolution of chatbots from informational to advisory, we can expect more and more banks and FIs to up their game and increase their efforts in order to extract the best of the vast potential which these chatbots offer. The game, after all, has just begun.

Diwakar Mandal

MEDICI

Diwakar is a FinTech enthusiast and an avid researcher who spends his time learning and writing about market trends, traction and disruptions in the industry. He has been active in the financial services consulting space for over four years.