AI could boost banks’ revenues by 3.4% and cut costs by 3.9% over the next three years, UBS says. While AI-powered technologies – assistants, advisors, bots – have significant challenges to overcome, entrepreneurs like the one I had a pleasure to interview recently, move the industry forward by introducing the next generation of capabilities to the financial services industry.
Zor Gorelov, Co-founder & CEO of Kasisto, the company behind conversational AI platform KAI, which enables companies to attract, engage, and transact with their customers via human-like and intelligent conversations anytime, anywhere, shares how KAI is applied by some of the largest financial institutions, and what role conversational banking will play in the financial services industry.
Photo: Zor Gorelov, CEO, Kasisto
Elena Mesropyan: Zor, thank you for joining us today for this conversation. Let’s start with you telling a little about yourself and your professional experience.
Zor Gorelov: Kasisto was spun out of SRI International, the same world-renowned research institute where Siri was invented. Other everyday inventions from the institute include the computer mouse, HDTV, and website addresses (.com). For years at SRI Ventures, Dror Oren, one of our four Co-founders and Chief Product Officer, was at the forefront of commercializing AI technologies. Dror and I met back in 2012 when he was working on SRI’s next-generation virtual personal assistant engine that became the foundation of Kasisto’s conversational AI platform, KAI.
Prior to founding Kasisto, the four of us – Ruth Brown (COO), Dror (CPO), Sasha Caskey (CTO), and myself – had been in the trenches building the foundation for this moment. In 1996, I founded BuzzCompany to improve communication and collaboration on company intranets, aka today’s Slack. In 2001, Ruth and I co-founded SpeechCycle and developed virtual assistants based on speech recognition and natural language understanding technologies. Sasha and Dror, add a layer of deep AI expertise to the founding team given their respective careers at SRI International and IBM T.J. Watson Research Center.
In 2013, we came together to create Kasisto because we firmly believed that a conversation is the most intuitive and natural way for people to interact with computers and that all of the pieces had finally come together to make conversational AI a reality. And now there is great momentum, especially in the financial services market.
Elena Mesropyan: What led you to found Kasisto? Tell us about your company. What does it offer and what industries does it serve?
Zor Gorelov: We founded Kasisto to enable financial institutions to acquire, engage, support, and transact with their customers via human-like, intelligent conversations, anytime, anywhere. Kasisto’s conversational AI platform, KAI Banking, powers omnichannel bots and virtual assistants with deep domain expertise in finance across mobile apps, web, messaging platforms, and IoT devices.
KAI is the leading conversational AI platform for the finance industry and the only platform available to millions of users across countries, languages, and channels. Our customers include DBS Bank, Mastercard, TD Bank, Standard Chartered, and Wells Fargo, among others.
Out of the box, KAI is fluent in banking, so smart bots and virtual assistants can help customers manage money, track expenses, analyze spending, make payments, and more. With contextual and personalized conversations, they fulfill requests, solve problems, and predict needs in ways that are as natural as texting a friend. KAI-powered bots and assistants help customers do more with data-driven insights and actionable recommendations.
Built with the deepest AI portfolio in the industry, KAI is an agile platform with self-service tools to customize and continually improve consumer experiences and seamlessly add new features. As an SRI International spin-off, we leverage decades of artificial intelligence research and IP to create a full-stack, scalable, enterprise-ready platform.
Elena Mesropyan: Kasisto recently announced that Standard Chartered Bank (SCB) chose KAI Banking to create new digital banking experiences that are engaging and designed to simplify the bank’s products and services for its customers. Tell us about this partnership, how is SBC intending to use Kasisto’s KAI-powered chatbot exactly? Where will it be deployed?
Zor Gorelov: We are really pleased that Standard Chartered Bank (SCB), one of the largest and most respected banks in the world with operations in 68 countries, chose our conversational AI platform, KAI Banking, to create new digital banking experiences that are engaging and designed to simplify the bank’s products and services for its customers.
SCB announced that their decision to select KAI for its chatbot was based on the platform’s proven track record of delivering bots that engage customers in ‘human-like’ conversations. KAI is already a banking expert and once it’s trained on SCB’s products and services, it will serve as a powerful AI brain ready to meet their clients in the channel they prefer. A key reason we were selected is that KAI Banking is one of the few platforms with a proven track record of production deployments by some of the largest banks in the world. It’s used by banks across many markets to engage customers in human-like conversations – with a level of accuracy and personalization that sets KAI apart.
In the words of Deniz Güven, Global Head of Design and Client Experience, “We are taking disruptive technology and using it to design a client experience that is not just convenient and personal – it’s a whole new banking experience. Looking at how quickly our clients are embracing digital, I expect our chatbot will become a popular way to connect with us anytime, anywhere.”
SCB plans to deploy KAI on its online and mobile banking platforms and websites as a virtual personal assistant to help clients manage money, make payments and analyze their spending in a split-second, via natural conversations in English and other languages. KAI has the banking know-how to fulfill client requests, make recommendations and solve problems – while delivering banking with a human touch. It can handle all of the unique ways people communicate and when there is a need to talk to a human, seamlessly hand off to a Standard Chartered banking professional. The service will launch in phases starting in Hong Kong next year.
Elena Mesropyan: In October, you announced a partnership with another major institution – TD Bank. In which areas of operations and how does TD Bank apply KAI Banking?
Zor Gorelov: Yes, TD Bank, one of the top 10 financial institutions in North America, also chose our conversational AI platform to create customer-centric experiences that seamlessly move from channel to channel – simplifying banking and empowering their customers.
Their announcement builds on TD’s ongoing efforts to create frictionless, mobile-enabled experiences that advance their Bank Human™ strategy. It’s not surprising that TD licensed our platform, given the fact that KAI Banking is known for its unique ability to power intelligent, human-like conversations.
KAI will give their authenticated customers instant support and secure access to real-time spending insights through an experience that is as natural as texting with a friend. Through the KAI-powered conversational interface, TD app users will be able to check account information, review transaction histories, and monitor spending levels. In addition, customers will also be able to get instant answers about specific spending-related questions including how much they spent on a recent weekend getaway, what their largest transaction was last week, or what they spent on categories like groceries or coffee last month.
In the words of Rizwan Khalfan, Executive Vice President and Chief Digital & Payments Officer, TD, “We are excited about this strategic initiative because it has the potential to help us evolve our relationships with more than 11 million digitally active customers who interact with us every day. AI has the potential to change the future of banking and we are excited about the many ways it can help our customers. Data-driven AI platforms like KAI can help ensure we are continuing to create intelligent, highly personalized and empowering experiences for all our customers.”
We are very excited about the work with TD and we are inspired by their long-term strategy for transforming customer experiences. They understand how to leverage the powerful combination of conversation and AI, and apply it to its customer-centric values and designs.
Elena Mesropyan: Having experience deploying conversational AI with banks, can you share your learnings? What have banks been able to achieve with KAI Banking that they were not able to do before?
Zor Gorelov: KAI is an enterprise-ready platform that powers bots and virtual assistant with financial expertise, steeped in domain knowledge, so financial institutions can:
Offer entirely new and differentiated experiences to their consumers, designed with the most intuitive user interface: natural human language
Decrease customer care costs by deflecting call center calls and triaging inquiries
Increase lifetime value of customers with contextual and relevant offers for financial products and services
Engage customers and promote brand loyalty with proactive financial well-being features
Meet customers in their preferred channel – mobile, web, messaging or home devices
KAI has a track record of exceeding our customers’ expectations with a year’s worth of evidence which proves that implementing our conversational AI drives business results while simultaneously improving the customer experience.
As an example, DBS Bank, a leading bank in Asia with over $320B in assets, is at the forefront of innovation creating lifestyle banking – seamlessly integrating banking into their customers’ everyday lives.
By leveraging KAI Banking, our conversational AI platform, DBS created digibank, India’s first mobile-only bank, with just one-fifth of the resources of traditional banks. Very quickly, DBS leveraged our platform to expand their KAI assistant from India to Indonesia and Singapore, and from mobile to the web and Facebook Messenger.
Keep in mind, DBS digibank itself breaks new ground, being a completely paperless, signatureless and branchless experience. That’s a lot of responsibility for the virtual assistant as the face of the entire bank. With more than 1.5 million customers, the KAI assistant handles 82% of digibank customers’ requests and inquiries without human intervention. It’s an entirely new banking experience via intelligent conversations.
Elena Mesropyan: Let’s talk about conversational AI. It seems that despite significant strides in NLU and increasing number of data-rich corporation launching digital assistants that accompany their products, chatbots are still not able to deeply awe with the real understanding of a human speech in all its variations and forms. So, that leads me to a question – where are we really with conversational AI? What is the industry missing to bring AI assistants that can truly understand the whole complexity of human needs, and not just tell us the weather, play a song, and reorder pizza?
Zor Gorelov: There was a lot of hype and disappointing chatbots around the weather, pizza and the like. But, we’re not a chatbot company. We’re creating the AI brain that powers bots and assistants, and we’re much more than only Natural Language Understanding (NLU).
Our deep AI technology stack enables KAI to power intelligent conversations that can actually track user goals and intents so our bots and assistants can do more for consumers. Our platform’s unique approach goes beyond basic NLU and combines KAI’s deep-domain expertise with the ability to reason and interpret context. It’s an intent-based infrastructure with conversational context tracking and switching. It can understand all of the idiosyncratic ways humans communicate and then reason to help users get things done.
Most conversational AI systems answer a question, but then leave it up to the user as to what they should do next. Few conversational AI systems go beyond answering basic questions and helping users accomplish one simple goal at a time. KAI, on the other hand, can answer both simple and complex questions and help users achieve multiple goals in a fluid conversation. What really distinguishes KAI-powered bots and assistants are their ability to hold “human-like” conversations. KAI-powered bots and assistants are trained to not only understand what the customer is saying but track what the customer is trying to do.
For example, KAI understands sentences such as “How about Lyft” which means nothing in isolation and only in the context of a conversation about spending on Uber. And, when the user switches topics, such as from paying a bill to checking a balance, KAI answers the new question and retains the original request to pay the person.
Deep domain expertise is also crucial to power intelligent conversations. That’s why out-of-the-box, our platform is fluent in banking. It’s that banking know-how that enables KAI bot and assistants to fulfill requests, solve problems, and predict needs.
Elena Mesropyan: Where will AI-infused assistants have the most transformative impact?
Zor Gorelov: In the finance industry, conversational AI can help banks transform experiences that simply help customers “moving” their money to the complexities of “managing” their money. It’s about infusing customer experiences so each journey is predictive, contextual, and personal.
At the heart of someone’s financial well-being is their financial data – how much they spend, what they spend it on, how much debt they have, what they’ve saved for a rainy day and invested for the future, and more. Turning this raw data into actionable and relevant recommendations is the difference between helping someone move their money and actually helping them manage their money.
Processing customers’ data to predict their’ financial needs requires the bank to take what is often disparate/uncategorized data (or poorly categorized) and augment and enrich it. With enriched data, they can derive insights and see the patterns in the data to create customized, personalized and contextual recommendations. It’s an opportunity to proactively inform the customer, not only increasing engagement but also improving brand loyalty as well as the financial well-being of their customers.
Elena Mesropyan: With progression and democratization of AI by companies like IBM and Google, what is the role that is left to startups like Kasisto? What are the challenges you face currently?
Zor Gorelov: We see banks embracing partnerships with FinTechs like ourselves. That said, our challenges are related to educating the market and our customers about the importance of deep domain expertise. In our experience, the path to building versus buying leads banks to delay launches and backpedal expectations. It’s one thing to start from scratch and train a system about banking and another to take a system that knows banking and train it on your specific products, services, and customers. Then, it’s a quantum leap from pilots to productions in terms of what happens in the real world when the bot starts conversing with real customers, let alone the challenges related to launching a new product or service, deploying on a new channel, or introducing the platform in a new geography and language.
In summary, building a simple chatbot using generic tools is a relatively easy task. Managing this chatbot in large scale deployment with millions of users require a different type of data and platform infrastructure.
Elena Mesropyan: Zor, I’d also like to congratulate you on recent funding announcement, it’s yet another validation of the work you and your team do. How does the company plan to invest the $17 million raised in the latest round?
Zor Gorelov: This past year has been one of explosive growth across the board – the number of signed deals and deployed customers, our team’s strength and size, and KAI’s feature robustness and readiness for large-scale enterprise deployments. There is great momentum going into this investment, especially following the recent signing of major customers including TD Bank and Standard Chartered Bank.
The new capital will be used to scale the business to meet the increasing demand for our products in existing and new markets as well as deepen partnerships with existing customers. We’ll invest this new funding to expand the KAI platform to include new AI-powered features and incorporate innovations that continue to deliver both business results and customer engagement and delight.
Elena Mesropyan: Along with the funding announcement, you have welcomed Tricia Kemp, Co-Founder & General Partner at Oak HC/FT, to your Board, as part of the partnership with Oak HC/FT. How will Oak HC/FT contribute to the future growth and development of Kasisto?
Zor Gorelov: We are very excited to partner with Oak HC/FT on this next phase and consider their track record and expertise in the finance sector a significant asset.
Tricia has been a successful venture investor with a great track record over the past 15 years. Before that, she held senior executive positions at Hewlett Packard, Merrill Lynch, and Cendant. She will be an excellent and very valuable addition to Kasisto’s Board.
Elena Mesropyan: What milestones do you have for the company in 2018 and beyond?
Zor Gorelov: Based on the success and traction in 2017, we have some pretty audacious goals for 2018. You can expect to see the platform do more in finance beyond retail banking and our robust pipeline continue to convert rapidly to production deployments. We look forward to driving more business results for our customers and delighting their customers with KAI-powered experiences.