MasterCard, Bank of America want you to let chat bots handle your finances

If your credit score has fallen, or if you’ve overdrafted on your debit card, or if you want to see a list of your last few transactions, Bank of America (BAC) wants you to let Erica help fix the situation. But MasterCard (MA) is hoping you’ll ask Kai.

Erica and Kai are chat bots, coming soon to your smartphone, both announced in the same week by BofA and MasterCard, respectively. The financial firms are just two of the large companies suddenly betting big on bots. The only problem: for now, there’s scant evidence that consumers see their usefulness.

Chat bots run on artificial intelligence (AI) and have been around for decades in some form or another. More recently, better AI has allowed for more advanced bots that can sound more natural in their use of language. Digit, a savings app that communicates via text message, launched in early 2015, and the news site Quartz launched a mobile news app this year that feeds you stories based on your text response to questions. Domino’s Pizza (DPZ) offers an SMS bot that will deliver pizza if you text it the pizza emoji. These are forms of AI.

But it was Facebook (FB) that arguably ignited interest in bots at its F8 conference in April, when it announced Messenger Platform, a new API for businesses to develop chat bots that live inside Facebook Messenger and can communicate with customers in conversational exchanges. There are already more than 11,000 bots inside Facebook Messenger. The 1-800-Flowers bot lets you order flowers, the Uber bot lets you order a ride, the Expedia bot lets you browse hotel and flight prices, the Fandango bot shows you movie times.

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Of course, Facebook isn’t the only platform that hosts bots. A handy web page, Botlist, lists them all and specifies whether they are for Messenger, Kik, Slack, Skype, SMS (text message) or another platform. But Facebook has brought bots to the fore, and its Messenger bots are the latest tool in Facebook’s effort to make Facebook a closed ecosystem. Facebook now has 1.7 billion users, and more than half access the site through its main mobile app; the separate Messenger app recently hit 1 billion downloads. Facebook wants you to stay inside one of these apps for all your needs—shopping, messaging, event scheduling, and even your banking.

Enter Bank of America and MasterCard. Neither company has a bot on Facebook Messenger yet, but neither is ignoring Facebook. BofA’s Erica is not for Messenger; it will live inside BofA’s own mobile app and can operate by text or voice command. But BofA has already announced it is developing a separate bot for Messenger. MasterCard’s Kai will go on Messenger.

BofA’s Erica, unlike most Messenger bots, will act predictively, sending unprompted text messages to users to suggest actions, rather than just responding when a user initiates a chat. Erica might text, “I found a great opportunity for you to reduce your debt and save you $300.”

Erica will “serve as a trusted financial advocate,” said BofA head of digital banking Michelle Moore said at the annual Money 20/20 conference in Las Vegas. Kai, according to MasterCard, will “make financial information and decisions part of consumers’ everyday lives.”

Text robots as “trusted financial advocates” that make your financial decisions? That might sound a little scary to some. A new Forrester research report from August warns, “Bots aren’t ready to be bankers” and that banks should avoid chat bots for now because, “the customer experiences they offer today are often either poor or uneven.”

Indeed, there’s been one big problem with chat bots thus far: most of them are just plain bad—clunky, slow to respond, only able to understand questions posed in the exact wording they’ve been taught. Few of the bots are must-use, and many misunderstand you at times—that could be disastrous if you’re telling a bot to move your money around. In many cases, ordering a service through a bot isn’t necessarily easier or more pleasant than ordering it through the traditional method: visiting the company’s own web site or mobile app, or calling on the phone. (As it turns out, for some functions, the phone call is still a pretty good technology.)

The current trend toward voice-activated home assistant devices is not unrelated. Amazon launched Echo (which runs on voice assistant Alexa) two years ago, Google launched Home (which runs on Google’s voice assistant) this year, and Microsoft is expected to announce its own home device, HomeHub (which would run on Microsoft’s voice assistant Cortana) soon. Companies building bots want their bots to work like Alexa: you simply ask a question and it has the answer, or performs the task, instantly. But they aren’t there yet.

For bots to succeed they must offer an experience that is easier and faster than the previous way customers completed a task. But they also must not be too intrusive. When it comes to a robot sending you text reminders, less is more.

Trim bot in Facebook Messenger

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Trim bot in Facebook Messenger

MasterCard and BofA will have to compete with more generalized finance bots like Trim, which is in Messenger but also available through just SMS texting, and which sends users a friendly text when a check has been deposited in their account or a large amount has been charged. When Thomas Smyth was creating Trim, he says, he took a page from sticky social apps like Instagram and then wondered, “Now how do people interface with not cat photos, but their finances? And how do we make it seamless?”

When you first sign up for Trim and link your bank accounts, it lists all the subscriptions that are charging you each month, and Smyth says most users immediately see one or two they had forgotten about, and no longer need; Trim will cancel the subscription for you; it says it has cancelled $6 million worth in subscriptions for users. (Personally, I found that Digit, a helpful savings app, sends me texts a little too often; Trim texts me less than once a week.) Trim has scored funding from firms including Ashton Kutcher’s Sound Ventures.

But financial giants like BofA and MasterCard have one built-in advantage in getting people to try their bot: huge customer bases. While new tech startups that only do one thing might have the tech savvy and the focus, and might appeal more to millennials, BofA and MasterCard might achieve quick growth from an existing customer base who have never tried a chat bot, but would sooner try one from their bank (which they, presumably, trust) than a young startup.

Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.

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