Banks latching on to AI in a big way
A customer service robot is the most visible side of the technology that replaces humans with chatbots
At a Calgary branch of ATB Financial, one of the bank’s latest recruits educates customers about financial literacy, plays music, challenges them to an impromptu dance-off and, naturally, takes a selfie.
Pepper, the new hire, doesn’t have the most sophisticated skill set at this point — for one thing, she can’t make financial transactions — but she’s made a big leap forward in becoming the first customer service robot in Canadian banking.
At some point, Pepper, developed by SoftBank Robotics Corp., could be programmed to do more complicated tasks. But for now, Edmonton-based ATB Financial is more interested in gauging how people react and figuring out which customer situations the robot best fits in.
“This isn’t … the world’s going to be run by robots or something like that,” chief executive Dave Mowat said. “I think it’s trying to find those spots in life, in the customer experience, where people really are looking for just an answer as opposed to a human interaction.”
Humanoid robots such as Pepper won’t be ubiquitous at the Big Five banks anytime soon, but robots of the virtual variety are already hard at work in the financial services world.
From artificial intelligence-powered chatbots that interact with customers through a bank’s digital channels — online, mobile and social media — to programmable software bots that can perform administrative tasks such as processing mortgage applications, these virtual machines are being tasked with some heavy lifting.
All of Canada’s Big Five banks are using, testing or eyeing both chatbots for front-line service and software bots for the back office.
For example, Royal Bank of Canada has been testing chatbots — computer programs designed to simulate human conversation via the Internet — with some of its employees for at least 18 to 24 months, said Eddy Ortiz, RBC’s vice-president of solution acceleration and innovation.
Canada’s largest bank hasn’t set a date for a wider rollout, but it will likely be a few more months of testing, he said. RBC is already offering e-transfers for its customers via voice-command with Siri, Apple’s virtual assistant.
Within the past few weeks, Toronto-Dominion Bank has started piloting a chatbot via Facebook and Twitter with a small segment of its customers who are early adopters, said Rizwan Khalfan, the bank’s chief digital and payments officer.
“It’s going to be a lot of test and learn, with the objective of (how) can we create more frictionless experiences on our digital properties, as customers are interacting with us more and more on our digital properties,” he said.
TD’s pilot involves testing simple tasks, such as helping to navigate customers toward transactions they want to perform, Khalfan said. But the goal for chatbots is to be proactively helpful in such ways as flagging upcoming bills and offering to assist in paying them.
It is these virtual bots that will be most apparent to customers since Canadians are increasingly interacting with their banks digitally.
“Chatbots are more about increasing customer service, rather than cost reduction,” said Joel So, partner at PricewaterhouseCoo-pers’ Canadian financial services consulting practice.
But the unseen automation technology in the banks’ back offices will likely have a bigger impact, particularly in cost cutting.
Over the past 18 months, the Big Five banks have begun using or testing Robotic Process Automation (RPA), software that can be programmed to perform manual, time-consuming office tasks modelled on the actions of a human user, So said.
Three of the banks already have them in use, and the other two have started or, if not, are close to using them, he added.
In as little as 12 weeks, software bots can be programmed to mimic processes that have been done by human workers, such as retrieving a document from an email, searching for a particular number and entering it into a database.
“In theory, that means the human user can be freed up to do more judgment-based creative tasks. In reality, it often means that human users are reduced, and that turns into cost savings for the bank,” So said.
There is a hefty upfront cost: an RPA bot that replaces one or two people could cost between $150,000 to $250,000 to create, So said.
“If you’re replacing two people, that payback should easily come in one to two years. You make the money back, and you continue to save the money from there,” he said.
So expects these “dumb” bots — an RPA bot is more akin to a robot on a factory line performing a series of pre-determined movements — in the next couple of years will increasingly be integrated with “smart” bots powered by artificial intelligence.
For example, a basic bot could power the process used in an insurance claims process, retrieving pictures of a car crash emailed in by a driver to start a claim, So said. But it could also connect with an artificial intelligence platform such as IBM’s Watson, for example, to analyze the picture and determine the number and type of vehicles involved, and trigger next steps.
Within three to five years, So expects it will be possible to install an artificial-intelligence-powered bot on someone’s computer and, over time, for that bot to develop a program to replace that role.