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Chatbots in banking industry in 2018 (Finance & payments)

AI is becoming omnipresent in the payments industry. There has been a massive surge in the popularity of using instant messengers to provide online customer support and chatbot work.

What is a chatbot and how does it work?

Chatbots, short for chat robots, are just one area of AI and they interact through instant messaging, artificially replicating the patterns of human interactions. When asked a question, chatbots processes it based on pre-defined knowledge and scripts. If the conversation brings it to a place where it does not know what to do, the bot will attempt to deflect the conversation or potentially pass it to a human operator. At the end of each conversation, it will learn more. Over time and over multiple interactions, the chatbot will gradually gain in scope and relevance.

Chatbots in payment and banking industry in 2018/2019

Banking and payments industry are increasingly becoming focused on creating a personalized and immersive customer experience. For these purposes, both have been investing a lot of effort into developing solutions to make payments and other tasks much easier for customers.

Fintech companies have been for some time working on AI and especially chatbots. The current use of AI-powered conversational interfaces made by Facebook Messenger bots, Alexa, Siri, Cortana, etc., is creating the data needed to make systems like these smarter. Some bots such as Microsoft’s Cortana were designed to learn both about the individual consumer’s wishes and people as a whole with each interaction.

The other reason for developing chatbots is that companies are following the customers’ pace. According to a BI Intelligence analysis, in 2015 the number of monthly active users on messaging apps quickly surpassed the number of active social network users. Last year WhatsApp reached the one billion user mark and their Chinese competitor, WeChat, claims to have 768 million daily logged in users. The number of WeChat messages sent increased by 67% from 2015 to 2016.

With many tech giants such as Google and Facebook spreading into financial services, banks are facing tech disruption like never before. In order to compete with other fintechs and with consumers’ increasing expectations, the use of artificial intelligence, machine learning and chatbots in banking is also increasing. Banks worldwide are testing new applications and deploying new solutions to improve the overall digital customer experience.

In addition, the technology behind the bots, i.e. machine-learning pattern recognition, can also deliver fraud detection benefits and work is under way to develop more sophisticated algorithms that identify threats that could be missed by humans and more traditional IT security mechanisms. Looking further into the future, the AI underlying chatbot technology could be able to offer more support to IT teams, and take on some of voluminous tasks like penetration testing. They can also provide IT support which means that IT teams will be able to engage in monitoring and managing security scripts to a greater extent.

Chatbots vs apps

Voice technology is recently gaining traction but texting and chat tools enjoy an enormous adoption rate among consumers when they were first introduced, even in the banking industry. The current trend in digitalization is assumed in the word frictionless by allowing consumers to interact with conversational interfaces they are familiar with, rather than filling out forms and checking tables.

Messaging has become a major way people interact with their smartphones, so companies want chatbots to literally be a part of the conservation. The eventual idea is for chatbots to directly enter conversations to provide services when, for example, two people are talking about travel plans.

Driven by the number of people keen to messaging as a communication method, 80% of companies around the world and plan to use chatbots for customer interactions by 2020 and 36% have already started implementing them.

Examples of chatbots

There are over 34,000 chatbots on Facebook Messenger alone, providing information to potential customers and driving engagement. Payments processors such as Wirecard is also rolling out digital payments through chatbot conversations with AI software firm Cognigy. So users can, through the technology, checkout and pay for their items as they chat with a virtual sales consultant.

Here are more examples of chatbot uses:

Chatbots against cybercriminals from Mercury PSI on Vimeo.

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