The app economy is too complex, fragmented and impractical, and it could also be coming to an end in banking quicker than we think. Instead of using individual apps, customers will interact with the bank via a virtual assistant. This way, the chatbots take on the role of integrator, which makes banking easier for the customer.
I was surprised to read in the LGT Private Banking Report 2018 that more than half of wealthy investors surveyed did not understand the term “robo-advisor”. In Germany, no one had any experience of it; in Switzerland, two percent had and in Austria, nine percent. And that won’t change much for them in the near future: in Germany, nine percent are interested, while in Austria 14 percent are and in Switzerland, 19 percent. It looks different if we consider it from a mobile app developer’s perspective. The mobile app marketing company Dot Com Infoway (DCI) has also published an interesting infographic. DCI estimated that in 2017, 20 percent of smartphone user interaction was with chatbots. The company is forecasting that, by 2022, chatbots will completely dominate communication with a whopping 93 percent.
Four minutes quicker to the goal
The market is currently adapting to it. DCI quotes from one of the strategic Gartner forecasts for this year: in 2018, over half of companies will invest more in chatbots. The number of language assistants is increasing and already this year, it is estimated that 30 percent of interactions has been conversation-based. Customers using chatbots save four minutes on average compared with those who go down the classic call centre route. Above all, however, they face the imminent danger of sinking in a veritable flood of apps. Last year, more than 6.6 million apps were available in the respective stores.
Users spent the majority of their digital time (around 54 percent) on mobile apps; however, there is already talk about the post-app era. “Apps will transform into services that will work silently in the background, while we will communicate with artificially intelligent beings whose ancestors, well alive today, are called digital assistants, chatbots, Siri, Alexa or Cortana.” Messengers, today’s most commonly used apps, serve as a kind of bridging technology towards this future. They will themselves become platforms, via which all services will be controlled. They orchestrate the whole user journey – and thus, in banking for example, the whole customer journey as well. If banks offer communication via a chatbot that is integrated into the usual messenger environment, they remove the core obstacles associated with mobile banking via an app.
- Customers will no longer have to download apps.
- They will no longer have to familiarise themselves with an interface that is new to them.
- The chatbot is not so easily forgotten like a banking app, as the messenger application is opened several times per day anyway.
Paradigm shift in mobile banking
Provided that the further development of the technologies required, such as NLP (Natural Language Processing), keeps up, chatbots will usher in a complete paradigm shift for the customer. Customers will no longer be called upon to familiarise themselves with their bank interface; instead the bot will learn what the customer wants. The customer types or simply says what they would like to do and the virtual assistant will implement it via the various apps. Banks are already using bots today. Mastercard is also offering banks and their customers virtual intelligent support.
Ralf Haberich, Chairman of CRM Partners AG, questions whether the chatbot might be the “Tesla of customer contact”, “Despite innovative engine technology, practically as powerful and comfortable as a traditionally powered limousine, the customer should always experience a similarly positive quality of service as if communicating with real employees: automation without sacrifice.” If it was up to Nitin Vyakaranam, founder and CEO of the fintech Arthayanatra, the chatbot – to stay with the metaphor – would be a limousine with a huge crumple zone. He explains that he founded the company because, on his return to India, a friend sold him a bad investment product: “A robo-advisor would never have done that.” Quite the opposite, Nitin Vyakaranam envisages that artificially intelligent (AI) virtual assistants will, in future, sound the alarm if their users get carried away with costly purchases.