In what is believed to be a first, Dyme has developed a prototype of a Facebook Messenger bot for financial services. 

Dyme, the text banking startup, gave Bank Innovation a sneak peek at the savings chatbot, which mirrors Dyme’s text application.

Dyme is one of six startups in the spring class of Bank Innovation INV, this site’s sister fintech accelerator.

The rough chatbot starts its interaction once a consumer messages it – just a “hi” will do. The chatbot then asks the consumer for the tone she wants: high school team, aerobics instructor or terrible parent. Once the consumer makes her choice, the chatbot asks how much the consumer wants to save.

The process is identical to Dyme’s text savings service. Admittedly, the chatbot at present offers minimal functionality, but it achieves the goal of expressing a cogent response to a variable message submitted by a consumer. Bank of America Corp. has announced that it is developing a Facebook Messenger chatbot, with functionality restricted to customer service. That bot is expected to be released later this year. 

Joseph Prather, Dyme’s CEO, told us the chatbot is part of Dyme’s focus on developing a full suite of message-driven applications and services. Facebook released specifics on building a Messenger bot only last April, making Dyme’s prototype all the more impressive.

Prather indicated that Dyme’s team is working on building more messaging products and services, and would consider private-labeling its technology to financial institutions. 

The opportunities for fintech chatbots are believed to be substantial. In a long post on VentureBeat, Bijan Shahrokhi, a founder of a mobile payments and loyalty startup called Virtual Next, offered a robust argument for bots earlier this week. Shahrokhi wrote that Facebook Messenger bots open “many doors for easier, better digital interactions by enabling businesses to embed codes in chat conversations.” He offered a few distinct benefits:

• Chat bots are also a great tool for the banks to simplify their digital interfaces, while being easier to maintain than an app. To support a new Messenger command (e.g. “what’s my credit card balance?”), there is no need for an app to be developed and published in the App Store. All the bank has to do is to write code that translates the message to a certain set of actions in the back end.
• Chat bots are great tools for delivering alerts to users’ accounts.
• Facebook users will soon be able to transfer money, pay bills, and deposit checks via Facebook Messenger. Admittedly, creating a simple money transfer experience on Messenger will take some time, but the potential for day-to-day financial transactions via Messenger will be there.
• Instead of opening a banking app, users will find it more convenient to go to Facebook Messenger and ask questions such as “what’s my balance today?” It is also simpler for the bank to add support for new inquiries in Messenger than to support it by revising a mobile application.
• Searching in Messenger will be radically different than searching in a browser. It’s a lot easier to type a question on Facebook Messenger than to go to a browser or a bank app. In addition, a user will always have access to previous inquires and can easily access them by scrolling up.
• It hasn’t been easy for banks to develop a content delivery strategy for customers because financial education is not an interesting topic to a large segment of the public. Using chat bots, banks can push personalized financial educational content to any of their chat followers, including those who are not customers. This is reflected, in part, in Dyme’s prototype.
• It is more convenient for the average user to speak to a customer support agent on Facebook Messenger than on a private chat service on a website or an app. (Presumably, this is why BofA is developing its chatbot.) On Messenger, a user can post a question without giving it their full attention and come back to it at a later time to review the response.
• Banks can present offers and promotions in Messenger. The offers can be personalized (e.g. “pay off your $2,000 credit card debt today”). There is also an almost 100% guarantee that customers will see these messages, considering how often Messenger users obsess over the app.

While authentication via Facebook Messenger is a challenge, Shahrokhi believes that “the adoption rate for Messenger bots will be much higher than any disruptive software or hardware device in the past.” He recommends pursuing chatbots immediately.

Given the importance of security and privacy in banking, it is essential for banks to start playing with chat bots as soon as possible. Due to the current limitations with authentication in Facebook Messenger, banks should begin by focusing on areas that do not need authentication, like search, news, education, and general inquiries. Phase 2 can include more complex services such as live chat and alerts. Phase 3 will include services such day-to-day banking in Messenger with secure authentication.

Dyme is jumping right to Phase 3.

Based in San Francisco, Dyme won “Best in Show” at FinovateFall 2015.