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Bank AI tries to read customer minds

By Claes Bell, CFA · Bankrate.com
Friday, August 3, 2012
Posted: 4 pm ET

First your checking accounts, then America's nuclear arsenal? In the latest sign Skynet is edging ever closer to becoming a reality, banks are using artificial intelligence to help them decide the terms on your checking account.

Basically, banks have gotten sick of paying pollsters to call thousands of people and find out what they think about various aspects of the banking business. Instead, they're using artificial intelligence to interpret vast swaths of Web chatter, including comments and posts on social media sites such as Facebook, trying to discern sentiment about things like fees and rewards. The goal: predicting how customers will react to changes in their accounts.

From Sean Sposito at Banking Technology News:

As BBVA Compass was tinkering with its retail banking pricing strategies last fall, robots were scraping the Web behind the scenes.

Like its peers, the Birmingham, Ala., bank needed to adapt to caps on interchange fees. It had to decide which benefits its retail customers would keep and which would get the ax.

On a hunch, the bank decided to drop its $25 checking anniversary bonus, while keeping its debit rewards and other features.

The computers confirmed that people were upset, but they prodded executives to tell customer service reps and tellers to explain that BBVA Compass had decided to keep its other perks.

Those robots, really snippets of code dipping and diving into paragraphs and sentences across the Internet, gave the bank what focus groups and pollsters would have taken months to confirm.

The reports the bank receives from the machines give BBVA daily insights into consumer reaction to the bank and its competitors.

"We look at our own (bank). We look at our major competitors," says John Wessman, BBVA Compass' executive vice president and chief marketing officer. "You tend to get a little bit different perspective from consumers. They will be much more open and sharing on their Facebook accounts than they would be if they called a call center."

There are some pitfalls, though, to relying too much on this type of analysis. As Sposito notes in the story, many comments aren't discernably positive or negative. And there's the fact that millions of people aren't on the Internet at all, and millions more don't spend enough time there to leave lots of breadcrumbs for Internet robots to follow.

Also, the active Web population is going to have considerable biases on a lot of subjects. One obvious example would be a bank thinking about making a big investment in technology. Looking at Internet sentiment about things like remote deposit capture would probably lead you to conclude it's a lot more important than it actually is, because folks who spend a lot of time on the Web would likely value technology more than the general population.

Still, while I don't think it's a replacement for calling people and talking to them, I do think monitoring Twitter and public Facebook comments (emphasis on public) seems like a good way to be more responsive to the needs of consumers.

One final takeaway: If your bank does something that annoys you, take to the Internet and complain about it! The robots are probably listening.

What do you think? Should banks try to get clues about how people feel about bank services from the Web?

Follow me on Twitter: @ClaesBell

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