By Brad Powell

When Facebook announced it was opening its Messenger platform for third-party chatbots in April, a flood of technology and business coverage followed, hypothesizing about what the move could mean for a variety of industries.

Banking was not immune – a Google News search on "banking and bots" continues to turn up a long list of recent articles and blog posts about artificial intelligence-powered chatbots and their potential uses for banks, credit unions and other branches of the financial industry.

Often opening with the detail that Bank of America is planning to develop a bot to interact with customers in Facebook’s mobile messaging app, many of these articles sound similar notes. But a few outlets made points that were more original and intriguing. I wanted to highlight those in this post and add a couple ideas of my own regarding banking and bots.

But first, it’s worth going over the points that most of these articles have in common – the material that makes up the conventional wisdom on the topic.

The most obvious advantage banking bots could provide, these articles say, is simplicity. As Fitz Tepper wrote in a TechCrunch article, “no one likes to log into their bank’s account portal, and even when they do it’s difficult to parse and understand the itemized statements offered each month.”

With a bot in Messenger (or another AI-powered platform such as Amazon’s Alexa, Apple’s Siri or Microsoft’s Cortana ), customers would skip the login steps and perform simple transactions by tapping out (or speaking) a few words: “Send $100 to Jim Smith,” or “Pay credit card bill.”

And, as Bijan Shahrokhi writes in VentureBeat, “Chat bots are also a great tool for the banks to simplify their digital interfaces, while being easier to maintain than an app.”

Another use for bots that many banking experts foresee is providing automated advisory services for customers.

“We could see it migrating toward more complex financial decisions. Imagine it going from understanding ‘I'd like to save more’ to ‘Can you help me find ways to get closer to my savings goal?’” said Bradley Leimer, head of fintech strategy for Santander U.S. Innovation, in a recent American Banker article.

Unsurprisingly, many of the bots-and-banking articles mention security, as well. “If Facebook has its way and companies build bots into Messenger, how do you deal with security through Messenger? How do you prevent further financial information feeding into Facebook?” asked Robert Haslam in a recent BankNXT article.

More Than the Basics on Bots

The reporters and columnists who saw beyond simplicity, advice and security made more of an impression.

For instance, instead of fantasizing about the capabilities of a hypothetical super-intelligent bot, Faisal Khalid made a more practical case in TechCrunch: “I believe that un-intelligent chatbots will be the first excellent use of chatbots.”

In a piece that’s critical of the current state of chatbots, he sees promise in deploying them to “explain how complex things work. Like bank products, for example.”

“Imagine a chatbot that could help you — a first-time buyer — understand anything and everything you need to know about buying your first house. How valuable would that be? It would be amazing and immense.”

Bots also could do more than answer the questions and perform the transactions that customers initiate, Keith Armstrong writes in VentureBeat. They could sell.

“Personal banking has always been about the right products, at the right time, for the right financial persona,” Armstrong writes. “Banks, with a contextual understanding of user data, might consider a bot an interesting channel for offering timely and well-designed products directly to users.”

Bots’ access to customer data and their precision make them good matches for the tasks described by Khalid and Armstrong. There are two other ways bots could leverage these advantages:

• Follow-up. Banks and credit unions aren’t always at their best in communicating with customers. If a customer has applied for a loan and is waiting for the decision, it’s not uncommon for him or her to call to check.

A bot could provide a quick answer without taxing call center resources. The bot could also send notifications – “You’re approved!”— once the decision is made.

• Compliance. For loan applications and other complex transactions, questions arise: Which disclosures are necessary? What compliance language is appropriate? How much training should be scheduled?

Automated customer service via bots takes care of all these issues. As Armstrong wrote, a bot would know when to offer a banking product to customers. It would also know how.

Understanding what chatbots can do is a good start for banks and credit unions as they consider building them. But, as I wrote in a post about electronic signatures, financial institutions also will have to ask themselves “why are we doing it?” Those that anticipate tangible benefits, such as reducing cost, reducing risk and adding revenue, might well find that there’s much more than hype when it comes to bots.

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