The future of Artificial Intelligence in banking

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Chatbots and voice recognition
By Annabel Hodges, contributor. 6 April, 2017
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Following his trip to SXSW, Teachers Mutual Bank’s Head of Digital, Gerard Smith, offers a glimpse into the future of how finance brands will increasingly use artificial intelligence.

The SXSW Conference

Smith attended the recent SXSW conference in Austin, Texas, where among the many fascinating topics up for discussion (including Robots Eating Their Young) was machine learning, artificial intelligence (AI) and robotics. Here, he offers insight into how some seemingly out-of-this-world technological developments may soon be coming to a banking solution near you.

One of the key learnings Smith came away with was that voice activated tech will soon lead the way in interacting with AI. “There are now children who will only know voice-activated technology to operate computers,” Smith says. “Technology such as Alexa and Cortana are already taking control of smart houses. You can tell Alexa to turn your lights on and off or ask her to tell you about a particular topic on the internet and she will do that search for you and bring back the information.”

Bots, balances and budgets

The potential for personal banking in this context is that customers may no longer utilise apps. “The future of banking may be that you tell Alexa or Cortana to perform a transfer for you to make sure there is an enough money in an account,” Smith surmises. “Or it may become more interactive where AI actually prompts your next spend or is able to help you as a budgeting tool by being able to tell you not to buy that pair of shoes or that takeaway because you’ve already passed your spending limit – whatever that may be – according to the rules you’ve set. What we’re seeing now is just the beginning of best practice with Messenger and chatbots,” he adds.

As we highlighted earlier this year, Facebook Messenger launched its Bots service in 2016 and has seen significant uptake of the service since its introduction. Facebook is not the only platform to have jumped on the chatbot bandwagon. AI technology is rapidly gaining popularity with a proliferation of chatbots now integrated across all the big platforms including Skype, Slack, Amazon, Google and more.

"AI may become more interactive where it actually prompts your next spend or is able to help you as a budgeting tool by being able to tell you not to buy that pair of shoes"

Chatbots to watch

London-based FinTech start-up Cleo has already received over US$700,000 in funding, including from Skype Founder Niklas Zennström. Described by its creators as the ‘Siri of personal finance”, the platform is now integrated with Facebook, Alexa and Google Home. Cleo will connect, securely of course, to bank and credit card accounts and allow users to track their spending, set budgets and receive reminders or alerts as required.

Last year PayPal entered the world of chatbots by joining Square Cash and Venmo to allow P2P payments using Siri as well as setting up a beta programme with Stripe to allow payments through Facebook Messenger. This year the company has further invested in the technology, launching its own bot on the Slack platform. The bot allows Slack users to send money between PayPal accounts without leaving their Slack conversation. San Francisco-based start-up Olivia AI aims to organise all of your accounts and transactions to help you better manage your money and stretch your monthly pay. The app provides personalised ways to save money based on your spending habits, learning from each transaction.

Big names investing in proprietary technology

Taking it a step further, several banks and fintech platforms have announced they will be taking their investment to the next level by rolling out their own proprietary chatbot services rather than relying on existing third-party platforms.

The Royal Bank of Scotland announced it was working on its new chatbot, Luvo, a year ago. Typical tasks include helping customers who have lost cards, locked their pin or need to order a new card reader. In December 2016, the product kicked off an initial trial with a sample of 10% of Scottish customers, who already use web chat to communicate with the bank. Luvo, now renamed to Assist, is built using IBM’s Watson technology with a keen focus on machine learning and the ability to handle an increasing range of complex tasks and human interactions.

UK credit checking company, ClearScore, has meanwhile launched what it says is the world’s first chatbot aimed at building consumers’ ‘financial fitness’. The free coaching programme is divided into three categories, depending on the user's current credit level. It then uses chatbot technology to recommend easy changes and steps that individuals can make, creating tailored interactive ‘to-do’ lists and engaging content.

Consultancy firm Matter has built a chatbot named Matilda capable of having natural language conversations to provide pensions advice. The premise is that users are able to chat to Matilda as they would a human pensions advisor, and so receive truly tailored responses. Whatever the platform, it’s clear that chatbots and artificial intelligence are not only here to stay, they are a technology that will become an increasing part of everyday life.

Smith witnessed natural language conversations between humans and robots at SXSW. "The conversations weren’t just a one-word response. The robots were actually able to contribute to a conversation utilising machine intelligence and, in fact, artificial emotional intelligence. There was also a lot of talk at the conference about how they could teach computers to have attitude in their responses."

Paging Arnold Schwarzenegger...

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Originally hailing from the UK, Sydneysider Annabel is a digital marketer with over a decade's experience working with global agencies and brands. A data and spreadsheet aficionado, she recently swapped SEO for motherhood and we eagerly await the analytics report! She is also maternally bilingual in French and English and speaks fluent Spanish.