Your bank really wants to chat.
Recently, Bank of America, MasterCard and several financial startups announced new tools – known as chatbots – that will allow customers to ask questions about their financial accounts, initiate transactions and get financial advice via text messages or services like Facebook Messenger and Amazon’s Echo tower.
The early versions of the financial chatbots generally do little more than answer basic queries about recent transactions and spending limits.
But companies are aiming to build the chatbots into full-service automated financial assistants that can make payments and keep track of your budget for you.
“What will banking be in two, three or four years? It’s going to be this,” Michelle Moore, the head of digital banking at Charlotte-based Bank of America, said in describing the bank’s new offering, which it has named Erica.
The banks are looking to get in on the broader excitement about virtual assistants and chatbots in the technology industry.
Facebook and Microsoft have introduced high-profile, occasionally problematic, chatbot features to capitalize on the popularity of messaging services, particularly among younger consumers.
These bots are generally powered by artificial intelligence software that lets them pull in information and turn it into comprehensible answers, in the way that Apple’s Siri attempts to do.
Many companies are betting that automated bots – both in text messaging and voice-activated form – could become the dominant interface of the future, surpassing phone apps and websites as the way to reach consumers.
“It’s pretty clear the tech industry thinks this is the next big thing,” said Tom Poole, the managing vice president of digital at Capital One.
Poole’s firm rolled out its first voice-activated bot on Amazon’s Echo personal assistant system this year, and it is planning advanced capabilities in the coming months: “It’s just scratching the surface right now.”
A few startups have already found success – and attracted attention from the banks – by creating chatbots that do particular financial tasks.
Digit, a San Francisco-based startup, offers an iOS and Android mobile app that can monitor a customer’s spending habits and pull small amounts of money from a bank checking account into a Digit savings account several times a month – with all interactions channeled through text messages. The company has raised $36 million from venture capitalists and saved $230 million for its customers since starting in 2015.
Saving is one of the features being built into Bank of America’s offering, Erica. The early version that the bank debuted last month can also track your credit score, look at your spending habits and offer advice on how to pay off bills, along with moving money.
A day after Erica was unveiled at the financial technology conference Money 2020, MasterCard revealed its Kai offering, which it will make available to the banks that issue its cards. Neither Erica nor Kai is available to customers yet, and the companies did not provide firm release dates.
Among the Silicon Valley startups working in the same realm, there is a common argument that the new digital financial assistants should come from outside the financial firms so that they can link to any account a customer may have and bestow unbiased advice.
Bank of America, for instance, would have little incentive to suggest that its customers sign up for a credit card with another bank, even if it is offering a lower rate.
Several venture capital firms have provided backing to a startup, Clarity Money, which was released last week and offers a range of services similar to Erica’s.
“Consumers should have an unbiased advocate helping them navigate their financial lives,” said Adam Dell, the founder of Clarity and the brother of Dell Inc. founder Michael Dell.
Critics of chatbots have said that even with artificial intelligence, bots will continue to lack the intuitive and empathetic understanding that humans need when dealing with difficult problems, such as financial decisions.
“We all know the technology is not there yet,” said Josh Reich, the co-founder of Simple, an online bank that has not released any bot features. “It’s just people picking up on a hype cycle.”