Blog 9: Automation & Chatbots in Financial Services

Businesses are increasingly beginning to use chatbots for users seeking customer service. Chatbots use AI in order to help answer users’ questions. Businesses employ chatbots because they lower the cost required for customer service representatives and allow users to get instant feedback. Many financial firms have begun to adopt chatbots, which I believe is an exciting application and presents many interesting questions regarding users’ perceptions and sense of privacy.

Most banks view bots as an opportunity (1).

Most firms are investing in bots (1).
Many banks believe that bots have the potential to take over conversations usually handled by customer service employees. (1)
Bots provide instant responses (1).
Many banks need help building bot technology (1).

78% of retail bank customers seek guidance with their banking; however, only 45% of customers felt like the digital experience that they received met their need (2). Chatbots represent a mechanism to help improve customers’ digital experience and close gaps in consumer knowledge.

All of the major banks have began to release their own chatbots. For example, Bank of America released Erica in order to “to send notifications to customers, provide balance information, suggest how to save money, provide credit report updates, pay bills and help customers with simple transactions (3).”

Bank of America’s chatbot, Erica. (4)

The rise of automation allows for technology to perform tasks that businesses would employ employees to do. According to PwC, in the early 2030’s, around 38% of jobs in the United States could be automated (5). Interestingly, the likelihood of one’s job getting automated is highly dependent on the level of education that the job requires. For example, for people working in the UK, it’s estimated that 46% of jobs that only require a high school degree will be automated, while jobs that require an undergraduate degree will be replaced by automation by 12%.

The US has the highest risk of jobs at risk of automation. (5)

These statistics point to the fact that the financial services industry will continue to develop technology, like chatbots, that automate tasks and, ideally, also improve the customer’s experience. Currently, chatbots can function to direct consumers to educational resources and perform simple tasks; however, the chatbots in the financial industry do not have the ability to perform more complex tasks.

Sources

  1. https://thefinancialbrand.com/63596/financial-banking-bots-chatbot-voice-ai/
  2. jdpower.com/business/press-releases/2018-us-retail-banking-advice-study
  3. https://thefinancialbrand.com/71251/chatbots-banking-trends-ai-cx/
  4. https://zdnet2.cbsistatic.com/hub/i/r/2018/05/18/cc061047-1988-404c-9a15-802d318c0c2a/thumbnail/570×322/f76d8352246ef4b5c16fa2c333618e12/5aff292560b27e5ce5351f3e-1280x7201may182018201323poster.jpghttps://www.pwc.co.uk/economic-services/ukeo/pwcukeo-section-4-automation-march-2017-v2.pdf
  5. https://www.pwc.co.uk/economic-services/ukeo/pwcukeo-section-4-automation-march-2017-v2.pdf

2 Comments

  1. Good answer back in return of this issue with solid arguments and
    describing all concerning that.

  2. Interesting stats! I think chatbots will be a great way to reduce the number of customer services representatives necessary for operating many large companies. Chatbots also have access to a far wider breadth of knowledge than individuals do, making their case for use on issues such as troubleshooting very strong.

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