Rise of the Bots: The Future of Mobile Banking Posted on April 13, 2016 By Nathan Binder This article may be a frustrating read, because it posits the opposite of the financial marketing mantra over the past few years: “More mobile apps! More mobile app functionality!” The push towards mobile banking has been inevitable, and mobile banking apps, the inevitable result. However, these apps shouldn’t be considered the be-all-end-all of smartphone banking, but an important stepping-stone on the way to a more convenient system: Chatbots.The idea of Chatbots goes back to the origin of computers, and Alan Turing’s AI test-- the criterion of intelligence being the ability of a computer program to impersonate a human well enough to fool a reasonable judge. Fortunately, even the most comprehensive Chatbots are nowhere near SkyNet-level potential, as Microsoft’s “Tay” experiment recently revealed. But simple call-and-response Chatbots can be incredibly useful.For example, I use a Chatbot service called “Digit.” I’m very bad at actively saving money, so Digit analyzes my checking account and spending patterns, and saves money for me through micro-transactions. Every morning I get a text with my checking balance, savings balance, and options to save more or less aggressively. What attracted me to Digit was its simplicity-- I didn’t need to download an app that would take space on my phone, slow it down, and potentially malfunction (like my other FI apps are wont to do). The appeal to the consumer is the same. At 21, I already have two different financial institutions I need to access. As I get older, that number will increase; this hilarious study from 1998 about the “uncertain future” of online financial services states the average consumer has relationships with four different financial institutions. In today’s world, that’s 4 different hefty apps (my banking app is around 45 Mbs) to install and access every time you want to make a transaction or check your balance. The attraction to these apps are clear, as FIs can include all their online services in a nice little branded package, notably different from the stark minimalism of Chatbots. However, Chatbots can be just as branded and fun to use, as highlighted by this conversation with Digit: The main attraction of Chatbot banking is its pure simplicity. Simplifying UX is key, not making it prettier. Jim Bruene of Finovate envisioned how transactions with Chatbot banking could unfold: The Royal Bank of Scotland has already introduced a chatbot into its operations; “Luvo,” the customer service chatbot. Luvo won’t be used for transactions, she’ll handle common customer issues like lost cards, locked PINs, and how to order a new card reader, but she’s the first step towards simplifying financial interactions.In China, consumers and brands have already hopped on the chatbot trend. “WeChat” is a messaging service so integrated into the Chinese lifestyle, users can pay bills, transfer funds, book doctor appointments, order food, and more. With WeChat boasting 580 million active users in China alone, it’s no wonder Mark Zuckerberg dropped $19 billion on WhatsApp and just launched his own chatbots at F8. FB users will soon be able to order flowers from 1-800-Flowers or peruse CNN articles directly within Facebook Messenger.When Microsoft and Facebook start experimenting with a service within a month of each other, it’s a clear sign which way the winds of change are blowing. The benefits are clear (convenience, low-cost, efficiency), but what are the potential issues? Where is the line between useful and invasive? There are plenty of questions to be answered-- of execution, of security, of design, but they are questions to ask now to drive innovation, not for playing catch-up.If your credit union is interested in strategies involving chatbots, or pursuing any unique marketing initiative, contact The Pod Advertising for Blooming Creative solutions!