Whether ’tis smarter for banks to build bots that increase consumer engagement with their attendant risk — or suffer the slings and arrows of potentially falling behind. That’s the question we’ll be answering in this VB Live event featuring Forrester senior analyst Peter Wannemacher. Join us for insight into how to leverage the power of banking bots while minimizing the real potential for danger to your brand.
“We could have written a report called, ‘Bots are just a fad; ignore them, you don’t need them,’” says Peter Wannemacher, senior analyst at Forrester Research. He’s referring to the newest Forrester report, “Bots Aren’t Ready to Be Bankers.”
Indeed, the report did take take a cautionary view specifically for the banking sector, but that doesn’t represent the whole story.
“We are decidedly bullish on the long-term value of bots,” Wannemacher adds. “However, we are saying there are better ways for banks to use your money by preparing for the better bots that are coming — and ultimately the great bots.” Forrester reported that many bots companies have launched to date offer an uneven or poor experience. But experimentation in the finance sector carries different risk.
“Bluntly, the problem with bots are pretty similar in banking as they are with other industries — but the stakes are higher when it’s the customer’s financial life, when it’s their money,” he explains. “And those heightened stakes, as well as the psychology that surrounds those stakes, make a big difference here.”
When you’re chatting with a weather bot and it comes back and tells you the forecast for your area ‘is undefined’? Not a big deal. “But the idea that my bank balance is undefined? That’s scary,” Wannemacher says. “That’s a scary moment.”
One is the major issues facing any company eyeing bots is the sophistication of current systems and the technology. A.I.-based technologies have evolved rapidly in the past five years, Wannamacher notes. “But they are still farther away from science fiction — or even some articles — would make you believe,” he says. “And we’re still a long ways away from when the systems behind that technology that the bots need to tap into is ready.”
A is bot is also only as good as the data it can get to, and how well integrated the systems behind it are — and banks have a lot of data.
“Sometimes because of their own mistakes, but sometimes just because of the nature of the business, that data is managed and stored in ways that are not always easy to access, in ways that are hard to combine,” Wannamacher adds. “Even the structured data can be a problem, but the unstructured data in banking is even bigger. We’re still a ways away from when the systems behind the technology bots require is ready.”
It’s heading toward a tipping point, however, and Forrester does believe we’ll continue to see rapid evolution in A.I. technology — but that’s not the same as being there today.
“Our view is that most banks would be better off by preparing for next-gen bots rather than rolling out bots today,” says Wannamacher. “Mostly my advice is they should be balancing the risk by investing in what bank executives call ‘foundational digital initiatives.’ But ultimately it comes down to really upgrading and integrating back-end systems to serve future purposes. That will get them to a future state bot experience that’s second to none.”
All of that, though, doesn’t mean that you shouldn’t ever build a bot, Wannamacher says. He stresses that there are exceptions. “If a bank said well we’ve got to build a bot for something, I’d say then make sure you build it for something specific. Capitalized, bolded, italicized and underlined.”
Citing the Apple empire, Wannemacher notes that customer experience needs to be the ultimate driver for tech innovation. “We’ve been talking to executive and digital leaders at banks about the idea that you don’t need to predict the future to innovate, to win, in the age of the customer,” he says. “What Apple does better than anyone is get obsessed with what the customer needs and wants are, and then iterate based on that.”
What’s your something? Join this free VB Live event for more insight into what financial institutions can do now to tap into the bot zeitgeist but avoid the risk, how they can prepare for the future, and more!
Don’t miss out!
By attending this VB Live event, you’ll learn how to:
- Re-engineer back-end systems to enable real-time action
- Make progress on platform improvements—or replacements
- Embrace APIs for faster, more dynamic future changes
Speakers:
- Peter Wannemacher, Senior Analyst, Forrester Research
- Katy Gibson, Vice President, Product Applications, Envestnet | Yodlee
- Evan Schuman, Moderator, VentureBeat