ChatBots in Consumer Banking
This is Day 5 of ChatBot Week on Daily Fintech. You can see the intro and index here.
How Much?
ChatBots are great when customers want answers to various “how much” type questions, such as how much….
- Have I got left?
- Will this cost me in interest/fees?
- Will I earn/save by doing this?
Sure I could go online or check an App, but just texting those questions is easier.
Finding this innovation in the wild
MyKai from Kasisto launched on June 28. They must have had the back end ready and had the aha moment when they saw the launch of the Facebook Messenger App Store.
Bits don’t stop at borders but money has to show its passport. I wanted to try out Kasisto, but stopped at this Stop Sign (I am based in Switzerland):
“Right now, I am available in the U.S. If you live in another country, you can sign up and I’ll let you know when I’ve arrived.”
Kasisto which created MyKai originated from SRI International, the company that came out of Stanford University and created Siri.
Privacy
MyKai anonymizes the data and does not have full access to your banking passwords. My take is “be careful” and this will be a big hurdle with most consumers, which brings us to the next point.
LunarWay, a Danish full stack startup bank (now tagged “neobank”, aka “challenger bank” in UK) offers LunarWay Bot today (in Beta with a few thousand users). It was developed in-house
…And in Africa
ABSA (Barclays Africa) offers ChatBots via both Twitter and Facebook.
Conclusion from innovation in the wild
ChatBot looks like a natural UI for a mobile first Bank. It will become an increasingly standard feature of both startup and incumbent banks. Oh…and make tons of money for Facebook (showing us again how valuable being an ID provider is).
Messaging channels
Facebook is certainly the big one in America where Kasisto plays. When Kasisto hit a tech glitch they used SMS and Slack as fallback channels. Messaging itself is clearly a commodity. The money is at the intersection of ecommerce and payments and that is where Account Linking is the key innovation from Facebook (which we identified in the intro to ChatBot Week).
PSD2 and other utility regulation
Account Linking can be used a) by Banks to offer a better service or b) by startups who innovate on top of bank account data and aim to commodities banks into being low margin utilities. Actually that is not the objective of startups. They just want to offer a better service to consumers and to do that they need access to account data; turning banks into commoditised utilities is simply a by-product consequence.
PSD2 and other regulation is key to this. When banks have to open up their data, then they will.
It is a level playing field. Banks could win. Methinks we will see a lot of ChatBots from Banks soon.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Bernard Lunn is a Fintech thought-leader.
