Report Says Banking Bots May Have to Wait

Earlier this year Facebook Messenger announced that chatbots would be coming to their popular app. Ever since then chatbots have been the talk of the town as brands, publishers, and many others have introduced bots that can do everything from providing you with breaking news to ordering a pizza. As a result of their newfound popularity many have even speculated that chatbots could be used to assist with financial services. However it now seems that dream may be a couple of years off — at least if banks intend on building their own bots. 

This week Forrester released a new report titled “Bots Aren’t Ready To Be Bankers.” As VentureBeat notes the report is the result of interviews conducted with various financial institutions as well as with Facebook and others. Ultimately Forrester concluded that it would potentially take two to three years for artificial intelligence technology to advance to the point where such bots were viable and secure. This would also require strong backend support from the banks, which could also take a considerable amount of time to build.

Obviously there’s good reason for concern as the last thing banks want is to put their customers’ security at risk or to leave their money susceptible to cyber attacks. Aside from malicious intents there are also concerns that glitches or mistakes could easily be made with chatbot banking. As Forrester’s report put it, “If Taco Bell’s TacoBot misunderstands a person’s request and orders three tacos instead of one, the results are unlikely to be catastrophic. If, however, a bot interaction accidentally leads to the same person sending money three times or paying a bill wrong, the results can be costly.”

While many are likely to heed Forrester’s warning and delay any chatbot experiments for the time being not everyone is on board with that advice. Dror Oren, the co-founder of AI company Kasisto, told VentureBeat, “The banks that sit down and wait 2-3 years doing nothing, these banks, the digital first banks are going to eat their lunch, and we’re going to help them do that.” Oren, who agrees that it will take time for banks to build their own chatbots that are up to snuff, offers another solution: using his product. The company debuted its KAI Banking bot back in June and reports that the Royal Bank of Canada and DBS Bank in South Asia are both utilizing it now. 

Oren also says that waiting to get into the bot arena could cost banks some of their younger customers. “Gen Z, or the millennial cohort, probably won’t want to wait another four years. To a twenty-something who has grown up in the digital age, that’s simply an eternity, and without long-time roots in retail banking, a customer like that is liable to choose the next best bank. Bots provide an outlet for all banks and credit unions to secure that customer, and bring Gen X-ers and Gen Y-ers easily into the fold as well,” he said. 

Interestingly it seems that, once again, banks may be finding that it’s better to partner with technology companies than it is to compete with them. With the reality of potentially having to invest years (and likely millions) in order to capitalize on chatbots, it stands to reason that traditional banks will find companies like Kasisto attractive options. Just as traditional banks have started to come around on FinTech startups, they may find chatbot developers can be partners instead of enemies. In fact given their learnings from previous FinTech companies, traditional banks  might get on board a little bit quicker when it comes to AI and chatbot collaborations.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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