Is The Botification of Banking a Good Thing?

Bots are hot, and the application of chatbots to banking (i.e., botification) produces numerous articles in the press and on social media every week.

But I have a concern: Will the bot experience ultimately be as bad as the interactive voice response (IVR) experience is?

Granted, we're talking about different technologies here. I can't help but believe, however, that if IVRs were introduced today, they would get the same hype that we see with chatbots.

IVRs aren't new, though, and we all know how frustrating the IVR experience is. I know I'm not the only idiot on the planet who presses ZERO continuously until I get to a human (who, sadly, is often no more helpful than the IVR).

Proponents of bots will point out that the AI technology powering bots is what will differentiate the experience. Here's why I'm still concerned:

1) Banks may try to force too many types of interactions through bots. A recent survey, reported on by The Financial Brand, revealed that nearly one-third of bankers believe that more than half of all banking transactions and interactions will be handled by bots within the next three to five years.

That's pretty aggressive from a timeline perspective. And it ignores the reality that not every type of interaction is a good candidate for a bot chat.

Maciej Lipiec, a User Experience Director for K2 (which develops chatbots), wrote:

"Processes with lots of options are hard to adapt for conversational UIs. A good conversational user interface is not a simple adaptation of your forms with a bot asking a question for every possible form field. So we have to come up with smart defaults that you can change if you really need to, but usually you don’t need to edit them at all. A hybrid interface works best: part conversational, part point and click."

Banks have struggled to design effective point-and-click interfaces, and soon they'll have to develop conversational UIs, and then hybrid interfaces. Within three to five years? No way.

2) Banks won't understand the best reason for deploying chatbots. I don't need to tell you how strong the cost-cutting mentality is in the world of banking. I don't what percentage it represents, but a large portion of technology investments goes towards achieving productivity gains (i.e., cost reduction) versus revenue-generation of experience improvement.

I don't dispute that are significant opportunities to reduce expenses (primarily in the contact center) through botification. And I know that many chatbot proponents point to the opportunity increase sales with their claims that a chatbot will provide superior advice and guidance than a human can, and therefore increase sales with the increased consumer adoption of chatbots.

But I've been in marketing a long time, and I have yet to see a technology truly improve conversion rates as adoption in the long run as it becomes mainstream.

So, if cost reduction and revenue generation are the best reasons for chatbot deployment, what is? Data gathering.

The amount of data that can be captured, analyzed, and leveraged from chatbot conversations far exceeds what's being captured and utilized today in human-to-human interactions.

It's the data that enables the AI technology to work its "magic" to learn and improve future interactions.

If banks don't harvest that data to inform managers and executives across business functions of the trends uncovered by chatbots, then they will miss the opportunity to realize the benefit of the technology.

The Long Run Impact

The percentage of banks and credit unions that: 1) have a website; 2) provide online banking; 3) offer online bill pay; and 4) enable mobile banking; is astronomically high.

My point is this: In the long run, offering technologies provides no competitive advantage. Everyone catches up at some point.

It's not offering a technology that gives your firm an advantage, it's what you do with it that does. I'm convinced that the banks and credit unions that best utilize the data coming out chatbot interactions are the ones that will benefit the greatest.