Erica, the new chatbot from Bank of America, uses advanced AI to deliver personalized, actionable insight that goes beyond users’ specific requests. By delivering added value, Erica will help Bank of America to engage more deeply with its customers.
Over the last couple of years, banking-related chatbots have moved from the realm of experimental applications into mainstream use. However, often these chatbots are rather unsophisticated and can only deal with simple tasks, such as balance checks and transferring funds between accounts. Where requests are more complex, chatbots typically resort to referencing answers from the FAQ sections of banks’ websites.
However, Bank of America’s new chatbot Erica (due for launch in late 2017), will use AI, predictive analytics, and cognitive messaging to deliver high quality insights that anticipate users’ needs even before they have been clearly articulated. Users can access Erica via Bank of America’s mobile app, using either text or voice commands, and it will analyze their financial situation to produce recommendations for managing their money more effectively.
In an example use case, Erica sends a proactive SMS to a customer, telling them they can reduce their debt and prompting them to activate the chatbot. It then explains that the customer can cut their credit card interest by using surplus funds that it has calculated the user can spare to pay off more of the outstanding balance.
Alternatively, where a user makes a simple balance enquiry, Erica will alert them if their balance is lower than it normally would be at that time of the month and if this means they are likely to go overdrawn. In this instance, Erica will then offer possible solutions, such as transferring funds from a savings account to cover the predicted shortfall.
Erica can also monitor third-party financial data. For example, it can track users’ FICO credit scores over time, warn them if their creditworthiness has fallen significantly, and direct them to financial education videos and websites. Bank of America hopes that by pushing proactive insights and advice to users without prompting, Erica will become their “trusted advisor.”
AI-enabled digital assistants have the potential to transform the way consumers engage with their banks, and to do so in a way that does not add significantly to operating costs. Mobile has become an essential banking channel for consumers, particularly those in younger age groups. As per our 2016 Retail Banking Insight Survey, 22% of US account holders aged 18–34 years old use mobile banking every day. These consumers are also the most time-pressured and the most likely to seek help with decisions.
This demographic is therefore fertile ground for solutions such as Erica. While AI is not a panacea for banks seeking to rebuild the trust that has been so damaged in recent years, it will help them create stronger bonds with their customers.
By Daoud Fakhri, Principal Retail Banking Analyst