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What’s Behind The Bots?

The adoption of Bots in fintech is happening. Examples include Bank of America’s Erica, Lunarway Bot 1.0 in Denmark & Lloyds Banking Group’s experiment with Amazon Echo among others. This article explains why I think this trend will become a future standard. When you want advice you typically do three things; 1. Ask friends. 2. Search online. 3. Get expert advice. Bots can reasonably create the best of all these options with limited downside.

What is a Bot?

Firstly let’s define what we mean by Bots. The usual similarity across Bots is that they are computer programs that respond to enquiries automatically. The obvious differences between them are whether they act through voice or text or both and more subtle differences are the degree to which Bots are using AI. At the truly AI end they automatically adapt their responses with increasing numbers of interactions and at the lesser end they can only respond to pre-set enquiries which are updated manually.

Usual Sources of Advice

In terms of our usual 3 paths for advice we often start by asking friends because the level of trust with friends is high. However, financial matters are often taboo across these relationships because of the sensitivity of the subject and because it’s less interesting than other conversations. The responses if any are likely to be biased and narrow. Searching online is quick and free but overwhelming, lacking a filter to reduce the irrelevant or even risky links. I still wonder why we’re impressed with search engines giving us, in the case of searching ‘Financial Advice’, ‘about 17,800,000 results (0.67 seconds) as I’d happily wait longer for the top 10 options for me. Finally, we might resort to paying for professional advice, particularly since regulations set minimum charges to make investment advice more transparent but the cost is a barrier for many people and also there remains a risk of human bias and error, whether deliberate or accidental.

Best of All Options Combined

Use of Bots mean that we don’t have to burden our social relationships with financial questions and that we can access answers online (and increasingly through voice) and Bots will

Filter the responses for us at a fraction of the cost of financial advisors and more reliably.

What Lies Ahead?

My prediction in this space is for Bots to become slicker and increasingly humanistic and part of a team of Bots for different areas for decision making like health, travel & careers as well as financial matters. We have Bots in 2D (online, telephony) and are on track for richer experiences through 3D (augmented reality & VR).

The challenge and paradox facing the wave of Bots launched is that while customer engagement is increasingly automated we want experiences to be more human to increase our trust in them so we can expect the Bots to evolve into richer characters with personalities. This much seems inevitable for me and the really interesting storyline will be the convergence as the entourage of Bots becomes too overwhelming and pressure grows for them to merge into a single Bot advisor to manage the entourage of Bots that will provide guidance for all parts of our lives.

By Max Kalis, Independent Innovation & Fintech Consultant

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