AI In Financial Services: Chatbots For Effective Banking

The spread of smartphones and messaging apps is ubiquitous nowadays. Especially for digital natives, it is common to communicate via instant messengers. In fact, customers today expect to have a dialogue-based communication with their financial service providers. Some banks in Europe and the USA have already implemented the technology of chatbot banking for selected target markets. The new solution doesn’t require any special user interface. The system is simply operated using one of the favourite chat platforms. Such solutions provide basic functions, e.g. money transactions and account balance requests. The technology is a great chance for banks to attract new customers, first of all, tech-savvy millennials. 

Open APIs as a key requirement

Successful implementation of the chatbot technology requires the existing software infrastructure to be well prepared for it.

In ideal case, the bank has already a universal API platform to connect software solutions of various departments and external partners.

Safe and automated data exchange can be guaranteed only through the integration of IT systems. The opening of IT landscape enables to easily establish further services.

For example, the bank can take over the identity management for its customers. It can play a role of administrator towards other payment service or e-commerce providers.

Furthermore, open APIs enables the implementation of PSD2. Just as a quick reminder, the regulation obligates banks in the EU to provide third-parties access to their customers’ accounts through open APIs by 2018.

Customers can make financial transactions directly via their shopping platform so there is no more need for a payment service provider serving as an intermediary.  Also in this case, the operation can be easily carried out via chatbot.

Relevant Open API for Open Banking 

3 examples of a chatbot implementation for banking

Ally Assist by Ally Bank

Ally Bank was one of the first banks that introduced a chatbot. Ally Assist is a virtual assistant available in the Ally Mobile Banking app. Bank’s customers can interact with the chatbot via text or speech to request information on accounts and transactions, initiate bill payments, etc.

Furthermore, Ally Assist is able to predict customer needs. It analyzes accounts and transactions and provides customers with context-aware topics and notifications.

Chatbot Eno by Capital One

In March last year, Capital One introduced an SMS chatbot Eno.

Eno uses AI to answer customer’s questions on their finances (e.g. checking account balances or requesting money transfers). The chatbot is a self-learning system, in other words, it will evolve as more customers use it.

Moreover, the digital assistant recognizes emojis. Just send a “bag of money” to check your current account balance or “thumbs up” to confirm a transaction.

Chatbot Luvo by RBS

In order to relieve customer service employees of routine enquiries, the Royal Bank of Scotland launched its cognitive chatbot Luvo.

The virtual assistant is able to answer simple customers’ questions in chat. If Luvo can’t find an answer, it passes the query on to a human staff member.

In the future, Luvo is expected to receive additional features. The application of machine learning, personalization, and predictive analytics will help to avoid customer problems before they occur.

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