For the average consumer, money management is confusing, difficult, and time-consuming. It takes an enormous amount of mental effort to manage cash flow, track spending habits, and plan for both short- and long-term savings. Many Americans—Millennials in particular—are struggling to manage a complex financial reality. Banks can address these pain points by providing convenient and helpful financial planning advice through innovative digital technologies.
Financial chatbots have the potential to remove the stress of financial planning by delivering vital information and directives to consumers instantly and through familiar, conversational channels. By implementing this technology, banks will earn the trust and loyalty of Millennials, winning increased market share and driving new revenue.
What’s a Chatbot?
A chatbot is a piece of conversational software that uses artificial intelligence to mimic human interactions through a chat interface. This technology allows users to obtain the information they want using natural conversational language, rather than complicated menus and graphical user interfaces (GUIs). Users simply type a question as if they were contacting a friend, and the chatbot replies with a relevant response.
Chatbots work through existing messaging platforms such as SMS messaging, Facebook Messenger, and Slack. Messaging apps have recently become the most popular channels of mobile engagement, overtaking social media networks in active monthly users. Of these, Facebook Messenger is the most widely accessed messaging app, with over one billion users worldwide. Digital banking technologies that operate through these channels provide direct access to a large, highly engaged segment of the consumer market.
Because chatbots provide convenient and straightforward access to information through popular messaging channels, they have clear financial applications. Forward-thinking financial institutions—including RBS, Barclays Africa, DBS, AMEX, Capital One, Bank of America, and Mastercard—understand this and have already invested in chatbot technology to attract new customers, particularly in the Millennial market.