The age of the chatbots

robot with human face

By 2020, the average person will have more conversations with bots than with their spouse. Let’s explore what this means for the financial services industry.

Nordic Bank SEB recently got itself a new employee: Amelia. She even has her own photo and if you call their customer service line the chances are you will speak to her. But nobody has ever met her, and nobody ever will. That’s because Amelia is a chatbot.

Chatbots are the next generation, now

What’s more, Amelia is projected to take 60% of SEB’s incoming customer service calls. The cognitive and emotive engine is designed to learn as she (it?) goes. Increasingly mimicking human characteristics, to make conversation as lifelike and natural as possible.

Amelia is just one of the more high profile chatbots making their way in the banking world. Their purpose is to take some of the heavy liftings away from human call handlers, by answering basic queries and only to pass you on to a human operative if they cannot answer your question.

silhouette of phone user
Amazon’s Echo speaker will have 70.6% of users in 2017, with Google Home at 23.8% of the market (source: eMarketer)

Banks and other financial institutions see chatbots as an ideal way to manage and improve customer service. They start with apps and automated services to help you do basic things, such as make a deposit or start an insurance policy but are now evolving into the world of human interaction.

AI as your PA

Have you ever received an email from someone called Andrew Ingram claiming to be a personal assistant for one of your contacts? If so, you’re probably talking to a system developed by X.ai, a company which creates AI-powered personal assistants. They are designed to act as a guardian, safeguarding personal emails and lightening the administrative burden on human operatives.

Others use chatbots to manage web-based chat. They can answer basic questions and resolve queries instantly online without the need to call through to a customer service representative.

Financial institutions can manage the considerable financial and HR resources of managing the increasing volumes of traffic coming into their call centre. Customers spend less time waiting on hold which reduces their frustration and improves their overall impression of the bank.

Natural Language Processing

At the heart of successful chatbots is Natural Language Processing (NLP) and machine learning. Machine learning creates the chatbots algorithms, while NLP offers the conversation element. Picking up subtleties, complexities and context in words. Gathering responses proactively with customers, rather than waiting to be fed information.

Because the technology is still relatively new, early adopters gain a critical edge in areas such as customer retention and offer price advantages with their services. A recent Accenture report spells it out: ‘despite these forces of change, the migration of volume and revenue outside of the traditional banking sector remains limited in most markets. This creates a window of opportunity for banks to respond, incorporating the latest technology trends and repositioning their business models to be more competitive and sustainable in the digital economy.”

For banks and insurers, the message is clear. Adapt or risk being left behind.

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