At this year’s F8 developer conference, Facebook announced its plans to open up an app store for “chatbots” , or intelligent software programs that communicate with customers over existing instant messaging apps such as WhatsApp and Facebook Messenger, rather than the familiar company website or mobile app. Could this new use of technology reshape the way we manage our finances?
Using your messaging app to place orders
Facebook’s announcement marks a turning point in the fledgling chatbot economy, which has been seeing developments over the last 12 months. Workplace chat app Slack made a similar announcement in late 2015, allowing developers to build apps that talked to its 2m customers. You can now order a Taco Bell through Slack, and in the US it’s been possible to use Facebook Messenger to order an Uber since last Christmas. As of last month you can check-in or rebook your KLM flight using Facebook Messenger too.
Some commentators have already been likening Facebook’s announcement to the opening of the Apple app store in 2008, which brought simplicity and convenience to the struggling field of native app development, generating many new jobs and oodles of cash both for developers and Apple. Only time will tell whether this marks the start of Facebook’s takeover of the chatbot space, but this is a watershed moment nonetheless.
Financial chatbots of the future
Companies and customers are just starting to imagine a future where WhatsApp, Siri, Cortana, Alexa, Slackbot, Amy and the rest merrily chat to you, booking your flights, ordering you pizza, rearranging meetings with your colleagues, sending an Uber Courier to pick up your dry cleaning, all whilst humming away doing the same for thousands of other people at the same time. It is interesting to reflect on what this means for people and their money.
One of the big opportunities is dealing with that interminable problem of just wanting to speak to someone about something related to your mortgage, loan, savings account, etc. Waiting in call centre queues or struggling through huge corporate websites looking for a phone number or email address are some of the least enjoyable day-to-day experiences customers have with financial companies. The immediacy and flexibility of a conversation with a chatbot will be a huge boon to customers and companies alike, providing a better experience and allowing companies to cut costs.
Immediacy also has a beneficial effect in the area of impulsive savings. At the moment, putting money away when you are suddenly motivated to do so can be a tricky exercise — at best, it means logging in to online banking having written down the sortcode and account number of the service you want to pay into. Switch this for a simple one-liner in a messaging app and you can imagine how much easier it will be for people to make good on those oh-so-rare moments of financial parsimony. The infrastructure to support this will be necessary to handle WhatsApp pizza ordering anyhow.
Finally, the ability to have conversations with customers will completely change the face of purchasing financial products. Imagine applying for a loan with a few upfront questions, with supplementary queries arriving over Facebook Messenger as and when the bank’s processes require them. How much better for everyone than a high-pressure, 30-minute form-filling exercise, with one yes or no answer after much waiting and no opportunity to appeal. Obviously banks and other financial institutions will have a lot to change to make this sort of experience possible, but there will be a strong incentive in the form of superior customer retention and sales.
Overcoming security and trust issues
As with any new technology, there will be concerns. Security and trust are big hurdles. Financial companies spend a lot of time building up a trustworthy brand, and dispersing this and all the associated security paraphernalia you get on a website, in favour of one-line exchanges with customers over someone else’s messaging platform is a big ask for some companies, and many customers too. But banks were slow to adopt mobile apps for the same reasons and now they are indispensable.
At PensionBee, we want to be a positive force in people’s lives when it comes to their long-term savings. For me, chatbots are an exciting development. The most successful financial services companies in the future will be the ones that are able to put themselves where their customers are. We’d better get used to emojis.