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Money20/20: Wealth Managers Need More Chatbots as a Quarter of Millennials Use Chat Applications

Chatbots are not a new concept. However, by leveraging artificial intelligence (AI), they have come a long way. As they will continue to mature, it won’t be long before the technology tackles the wealth management space and becomes the go-to solution for the younger generation says GlobalData, a leading data and analytics company.

Speaking from Money20/20, the largest fintech event globally, Heike Van Den HoevelSenior Banking Analyst at GlobalData, comments, ‘‘Given Money20/20’s focus on AI, it didn’t take long for the conversation to turn to chatbots. While natural language processing and recognition is far from perfect, advances in AI have seen chatbots progress to a more conversational level.

‘‘In the financial services industry overall adoption rates remain low, but this is changing rapidly. For the generation that is growing up with Alexa, Cortana, and Siri, talking to a robot is nothing unusual. To remain relevant to this generation, financial services providers will have to integrate chatbots into their overall channel strategies.’’

Using the UK as an example, GlobalData’s 2018 Investor Survey shows that only 8.3% of customers have used chat applications when dealing with their investment providers. However, this proportion rises significantly among younger investors. Among 18–39 year olds, more than a quarter have used this channel. While this does not mean that they have talked to a chatbot, it shows a change in user behaviour and clear demand for more remote channels.

Van Den Hoevel, continued, ‘‘There is a clear consensus among industry leaders at Money20/20 that conversational chatbots will take a more proactive role as machine learning continues to mature. For example, Bank of America’s (BoA’s) Erica, launched in March 2018, is already heading this way.’’

Erica can help customers with simple transactions, pay bills, and advise customers on how to save money. There is every expectation that this will continue to develop and branch out into more complex tasks, benefiting from real-life interactions with BoA’s massive customer base. 

Van Den Hoevel, adds. ‘‘Chatbots may not be able to provide tailored financial advice yet. However, client demand for chatbots is there and will only continue to grow as the tasks the technology can tackle evolve. It’s time for providers to review their channel strategies and start training their chatbots.’’

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