Not too long ago, online banking and live chat with a bank or credit card representative felt cutting-edge. Now, financial institutions are upping the ante by launching chatbots to interact with customers.
Powered by artificial intelligence, these chatbots can quickly answer questions about balances, recent transactions or other queries. In addition to financial chatbots, bots used in other industries serve all kinds of purposes from helping you order a pizza to answering questions on the U.S. immigration website.
Banks and credit card issuers hope that bots will help answer consumers’ questions in the online environments where they already are — without having to log in to a website or app each time they want to view recent transactions or check their balance.
Chatbots from your bank or card issuer
Mastercard plans to launch Mastercard KAI, a chatbot that will initially communicate with its U.S. credit and debit cardholders, in 2017 on Facebook Messenger and later in SMS and other messenger platforms. A pilot test of Mastercard KAI is now live with 200 employees, and expanded to 1,000 employees in December 2016.
Meet the Bank Bots
Here’s a rundown of the chatbots mentioned in this story.
Who it’s for: Currently in a pilot for Mastercard employees; will be rolled out to all U.S. Mastercard credit and debit card holders.
What it will do: Users will be able to ask about account balances, review purchase history, learn about cardholder benefits, get help with financial literacy questions and more.
Who it’s for: Similar to Mastercard KAI but available to users on SMS, Facebook Messenger or Slack.
What it will do: Users can make payments, ask questions about transactions or balances and more.
Bank of America’s Erica
Who it’s for: Will be available to Bank America customers who use online or mobile banking.
What it will do: Erica will proactively identify patterns in customers’ spending and make recommendations on ways they could reduce debt, increase savings and more.
Who it’s for: Available to iOS and Android users who bank in the U.S.
What it will do: Penny gets a stream of transactions from users’ banks so they can view them all in one place. Penny alerts users about fees charged by their bank or increases to subscription costs, reminds them about payment due dates and more.
Mastercard also plans to release a bot for merchants that will let consumers make purchases via chat without opening their wallets.
“We’re looking to make commerce more conversational,” says Kiki Del Valle, senior vice president of commerce for every device at Mastercard. “You will be able to connect with a bot, ask a question and get a response within seconds.”
At Bank of America, an AI assistant named Erica (after the last five letters of the bank’s name) is expected to bow toward the end of 2017. Erica will communicate with online banking customers via voice or text. But it will be more than a chatbot, says Bank of America spokeswoman Anne Pace.
Erica will “proactively reach out to clients to help them manage their financial lives” rather than waiting for the customer to seek assistance, she says. (Customers will opt in to get Erica’s help.)
For instance, you might tell Erica you’re trying to save for a summer vacation. “Erica would compare it against your spending habits, your saving habits, what you’re using on your credit card, and it would give you advice and suggestions,” Pace says.
For example, Erica might point out you’re spending more money on dining out than you normally do and ask if you’d like to transfer some money to savings.
Chatbots across multiple accounts
Banks and credit card issuers aren’t the only ones using bots to help consumers understand and better manage their money.
Many of these financial bots (from banks and independent startups) may also boost financial literacy by answering questions about APR, the Fair Credit Billing Act or other money concepts.
Mitch Lee, co-founder of Penny, says chatbots make sense for personal finance because “finance can be a really complex area, and chat is really good at distilling that complexity and sharing knowledge.”
Tech company Kasisto powers bots for banks and card networks in North America (including Mastercard and Wells Fargo) and Asia. It also has its own direct-to-consumer personal finance bot named MyKAI that can access information across multiple accounts.
For instance, you might ask MyKAI how much money you charged on a recent vacation or how much you’ve spent in the past week at a certain merchant, so you can decide if you need to adjust your spending.
The bigger picture behind bots
Dror Oren, co-founder and vice president of product at Kasisto, sees a couple of reasons for the recent surge in chatbots. For one, as the technology has advanced, “we can scale computing power faster, driving ability to have AI relatively cheaply in comparison to what it was five years ago,” Oren says.
Brands outside of the financial technology (fintech for short) space are also making consumers more comfortable using chatbots.
“There’s a big push that was done with Amazon with Alexa and Google with Google Now,” Oren says. “From a channel point of view, Facebook has enabled Facebook Messenger to become a platform for bots that didn’t exist before” spring 2015, when Facebook first allowed bots on Messenger.
The future of chatbots
Lee predicts that chatbots will prove successful in the long run, but that some chatbots won’t survive the test of time or provide a better experience than interacting with a real person.
Early in 2016, Microsoft took its chatbot Tay offline after it spouted racist remarks learned from human users. Most brands want their chatbots to have a personality, but they also don’t want a repeat of the Microsoft incident.
“It’s harder than you’d think to deliver a great experience with a largely free-form experience,” Lee says. (His chatbot Penny does have some prepopulated responses users can click to make it easier to chat with Penny.)
Oren describes MyKAI’s personality as authoritative and smart — with a sense of humor but lacking the ability to flirt.
While many chatbots and AI assistants carry female names such as Erica or Penny, MyKAI is deliberately genderless. “If you ask it out, it’s going to give you an answer but it will say ‘now let’s go to banking because that’s what I do best,'” Oren adds.
Of course, while most of these chatbots interact with consumers, some chatbots interact on behalf of consumers. For instance, Trim created a bot that will chat with Comcast for you to negotiate your bill or ask for a one-time credit.
Most personal finance chatbots can answer questions about your balance, but they can’t handle all customer service inquiries — at least not yet. You may still have to call or go on the website or app for answers to more complex questions.
However, Del Valle sees the role of bots expanding in the future. “Bots will provide consumers with optionality,” she says. They will be just another way of interacting with customers. Chatbots “will coexist on people’s phones alongside digital banking applications.”
See related: Surprising things you can buy from Facebook chatbots
Editor’s note: This story, “Chatbots will help you with your cards, banking,” was posted originally on CreditCards.com