Banking bots highlight conversational commerce trend

A new generation of consumers connecting with their friends via messaging platforms expects the same conversational tools from their favorite brands. Financial services firms are giving it to them.

Western Union joined MasterCard and Wells Fargo among the financial services leaders to announce chatbots for Facebook Messenger at the social network giant's F8 Facebook developer conference last month. The company's money transfer bot allows Facebook Messenger users in the U.S. to digitally wire money to more than 200 countries and territories using 130 currencies.

In embracing Messenger, Western Union hopes to capitalize on the broad exposure afforded by the ubiquitous messaging platform, which has 1.2 billion monthly users, says Khalid Fellahi, senior vice president and general manager of Western Union's Digital Ventures unit. "We just want to ensure that [consumers] have access to this information and present it with simple menus that allow them to get the information literally in seconds," says Fellahi.

[ Related: How Facebook plans to bring Messenger to business ]

Banks have long used virtual agents as early chatbots to assist retail customers. Driven by improvements that allow computers to better understand natural human language, companies are building chatbots for tasks as basic as ordering food to more sophisticated chores, including provisioning more servers in IT departments, a key element of the so-called chatops trend.

Money transfers go through Messenger

For Western Union the calculus to leverage Messenger was simple. More than 80 percent of the company’s users are millennials and 81 percent use its financial services through mobile devices. Many of those users and younger consumers aged 16 to 20 prefer to conduct chat sessions and exchange text messages in familiar platforms rather than downloading applications to access digital services, says Fellahi. Western Union has enabled such a service by embedding its cross-border money transfer platform inside Messenger.

Western Union

"Conversation through chat or texting is how they prefer things and that's what we're giving them," Kellahi says.

You access the money transfer bot by searching for Western Union in Messenger, then starting a conversation with the company's bot by selecting "Get Started." Options will appear prompting you to send money, track transfer status or check real-time exchange rates in the software's drop-down menu.

If you need more sophisticated transactions you can select customer service to chat with a human agent through Messenger. You can elect to send funds to any of billions of bank accounts around the world or in cash at half a million global retail locations.

Fellahi says that Facebook, which began allowing consumers to create chatbots in Messenger in April 2016, has made it easy for Western Union to integrate chatbot technology into Messenger by providing access to its APIs as well as additional support and consulting.

Network effects are key

Western Union has its own digital services unit and it could have built its own chatbot, as Capital One and others in finserv have done. But Kellahi says it is important for Western Union to tap into the powerful network effects of Messenger. He likened it to joining consumers' conversations in progress.

"It's important to be more customer-centric," Kellahi says. "Where do our customers want to meet us? What are they already familiar with? Which ecosystem are they spending most of their time in? It's about joining them in the conversation or like waiting for people to come to your house or meet at an important café."

Even so Kellahi wouldn't rule out exploring additional chatbot capabilities and other services, such as voice-based assistants like Amazon's Alexa. For now, he says Messenger allows Western Union to experiment with certain elements "and as we learn more we can build more sophisticated things and that is the impetus here." He says that while the bot is available only in the U.S. Western Union expects to expand its use to other countries.

Western Union is hardly the only finserv firm tapping Messenger to facilitate transactions. Wells Fargo is testing a chatbot to assist consumers in basic functionality, such as checking their accounts and resetting their passwords, via Messenger. The U.S. bank said is piloting the virtual assistant with several hundred employees, and plans to extend testing to a few thousand customers later this spring. Mastercard meanwhile launched Messenger chatbots that allow consumers to order and pay for food and gift cards through Messenger.

While finserv chatbots hold the promise of making consumers' lives easier, missteps can court risks for providers who fail to master superior customer services, wrote Peter Wannemacher, a Forrester Research analyst, in an August 2016 report. Potential problems include a consumer erroneously sending money three times or paying a bill wrong, which would reflect poorly on the brand.

“If a person using a chatbot has a problematic or potentially incomplete bot interaction regarding their money, they can be left annoyed, upset or even scared,” Wannemacher wrote.