When I saw the summary of the recently released Forrester white paper on what banks should do in the face of the rapidly evolving usage of chatbots, I was pretty floored. At Finn, we believe strongly it is essential for banks to enter the chatbot space and that it will be critical to the future-proofing of their business.
I remembered the same outlook having been taken on the rise of app usage… and boy was Forrester wrong there. In 2007 they claimed that consumers weren’t interested in mobile banking, which turned out to be completely untrue. The same thing is going on now. A lack of understanding of the marketplace has resulted in a wild, and soon to be proven inaccurate, claim about consumer behavior.
So let’s take a look at why they are totally wrong this time as well…
1. Bots are already huge and growing
Half a billion people already use bots, and that number is expected to triple in the next 2 to 3 years. Those people aren’t prospective users — they are actually engaged consumers, and that number doesn’t even take into account the explosive growth of app development on Facebook messenger. Shopping, news, health, the stock market: All these areas are seeing an explosive growth in bots launching. The learning curve is steep. Progress will be made in 2 to 3 months, while Forrester is waiting to see what banks do over the next 2 to 3 years.
2. Taco or bank balance, encryption is key
Forrester analyst Peter Wannemacher’s deprecatory, albeit convivial, comment regarding banking being a more serious matter than ordering a taco misses the mark entirely. The underlying technology is the same. A bot that orders a taco for you has no less access to your personal information than a bot that tells you your bank balance. What makes messaging services a safe environment, and thus bots a safe bet, is the encryption Facebook imbues. If someone is comfortable ordering a taco or asking the weather of their particular location, they should feel comfortable checking their bank balance.
3. Banks are already there (in China)
In the same report that claims bots aren’t ready for primetime, Forrester itself highlights how Chinese banks have already deployed this technology. Compared to banks in China, global banks are behind. Instead of waiting to see what happens in the next 2 to 3 years, global banks can see what’s happening right now by looking at China, where consumers are actively using bots via messaging services to bank.
Above are only three distinct areas in which Forrester is completely off base. In short, high level? The idea for banks to wait on adoption of chatbots is crazy! It will take the next 2 to 3 years just to dip their toes in and explore deeper business cases to improve efficiency and engage consumers, especially millennial consumers.
Millennials are constantly being invoked as the catalyst for much-needed change. We know they are 10 times more likely to consider using peer-to-peer lenders — bad news for banks who will more and more be bypassed when their services don’t stand up to those deployed by technology companies. In fact, tech companies aren’t waiting 2 to 3 years to take advantage of usage trends. Startups like Digit, Trim, Abe, Penny, Xobi, and more are shaking up the mobile banking space with their virtual banking assistant products (more on my thoughts here).
If you can see the future, and it is coming up hot, why wait years to find yourself behind when you can easily be ready?
I understand change and evolution in any large institution can be challenging. We don’t advocate throwing out all the old systems in place, but banks absolutely should be experimenting in the chatbot space.
Perhaps to their surprise, they will find efficiencies that save them real money and resources — not 2 to 3 years in the future, but right now.