Nothing to download, no account to set up, no new interface to learn: AI-fueled, text-based conversation is set to be a true contender of icons and menus as the primary method of man-machine interaction. Chatbots are coming - and being adopted in wealth management too.
A computer program designed to simulate conversation with human users over the internet - that's what a chatbot essentially is. To do its job, the chatbot relies on artificial intelligence techniques such as deep learning, text mining or natural language processing.
The way it works in practice is: you just tell or message such program about what you want - and it reacts accordingly. So, if you, say, intend to get yourself a pair of shoes online, then instead of visiting a particular website, you just have a conversation with a store bot, mirroring what you would experience after crossing a threshold of a brick-and-mortar outlet.
Now, an intelligent chatbot is the one that continuously becomes smarter by learning from the data it collects during interactions with people. This is what deep learning consists in. For this reason, chatbots are - or one day will be - capable of delivering human-like customer service at a fraction of cost and time it now takes to accommodate those you cater to.
Apps out, chatbots in
In fact, a new study by Juniper Research, conducted in retail, e-commerce, banking and healthcare industries estimates that chatbots will help these save more than $8 billion per year by 2022.
High consumer adoption of messaging platforms and advancements in AI are the two major driving forces behind the rise of chatbots of all types and shapes: from weather and grocery bots through to life or financial advice ones.
According to Gartner, these new personal assistants will eat up 20 percent of all user interactions with the smartphone by 2019, gradually taking over mobile apps which are simply not paying off - overcrowded stores, too low adoption, not enough customer engagement.
Chatbots are making a splash. And coming, too, to a bank near you.
Thinking and acting for you
In the world of wealth management, once reaching appropriate intelligence level, chatbots are expected to relieve cognitive load people often grapple with when managing their money in the long run. In other words, the bots will be relied upon to do some thinking and acting on behalf of their interlocutors, with the aim to help them reach and maintain financial health - by offering insights, recommendations and ideas.
To do that, virtual assistants will need to crunch loads of data, willingly shared by those being assisted. Then, and only then should it be possible to, first: create client's behavioral profile complementing a regular 360-degree client view, second: come up with a personalized investment offer for the client based on their profile, life events as well as individual interests and preferences, and third: successfully guide the client in terms of investment-related issues such as portfolio rebalancing or order execution.
The said data is simply beyond the grasp of any human advisor, not only because it's so big, but also due to the fact that, paradoxically, it may come easier for clients to talk about delicate matters with a robot. This is how the boundaries of "know your client" can be pushed - within reason. First off though, chatbots will provide basic functions like portfolio information and updates, working their way up from there one step at a time.
Solid companions
When it comes to wealth management, the lack of human touch is an obstacle for chatbots to be adopted in the industry on a large scale. Highly individual approach towards every single client, personal relationships between the bankers and the banked, the extra mile the former are willing to go in terms of client's wellbeing - these are the industry's solid foundations. And if so, full robotization in this case is probably out of the question, with more complicated financial decisions to always be passed on to a living, breathing human being.
Recent advancements in AI do hold promise of making machines smart enough to take some of our responsibilities. In the world of finance, we envision a chatbot, for instance, as a reliable robo-advisor who knows investor's personal, financial, behavioral and risk profiles, being able not only to adjust to various needs and objectives but also anticipate them.
Here's where a decent dose of AI comes into play. And while AI might still be in its infancy, one must remember that, as Forrester puts it, bots are like seeds - once "planted" they need a proper amount of consumer interaction to grow.
Let's water them with it.
Maciej Wolański, CTO and Head of R&D, Financial Services Division, Comarch
Guiding you towards financial soundness
She understands you instantly, replies smoothly, assists you whenever you need it, and sometimes even cracks a joke.
A brainchild of Comarch, her name is Devra and she's a voice-controlled, AI-driven interface whose job is to act as a reliable companion being able not only to adjust to your financial needs and objectives, but also anticipate them.
So, as you snuggle into your sofa, Devra may use your TV as display helping you pay bills - or visualize financial data for you via VR goggles. When you drive your car, she switches to its head unit and lets you keep track of your household budget or investment portfolio, without you ever having to take your eyes off the road. Facebook user? Devra uses it too, as a chat bot.
What this means is she dwells on your smartphone by default, but, depending on context, she can run on a number of other devices automatically. In so doing, she allows financial institutions to seamlessly guide their digital-native clients towards financial soundness - in the most convenient way possible.
Interested in a demo? Write to finance@comarch.com.