Image courtesy Admirable Design

This week is ChatBot all week on Daily Fintech. Today is the Tech in FinTech day when I attempt to summarize why so many people are excited by ChatBots and describe who is active at the platform level. Then we look at the use cases in WealthTech, Small Business Finance, InsurTech and Consumer Banking.

If you are new to ChatBots, here is a good intro (yes, there is now a ChatBot Magazine).

First we look at ChatBots through three different prisms:

Prism # 1. ChatBots = User Interface (UI) 4.0

Prism # 2. ChatBots = native UI for AI

Prism # 3. FB Messenger BotStore is like the Apple AppStore in 2008.

Then we look at what the Internet Platforms in America (GAFAM) and China (BAT) are doing with ChatBots.

Finally, to bring it home to Fintech leaders, we explain the relevance of one specific feature called Account Linking.

There will soon be a Fintech version of the Turing test. For example, is that my friendly private banker recommending an asset allocation change? Or is it a robot programmed to act like a friendly private banker?

Prism # 1. ChatBots = User Interface 4.0 

1.0 = Text command line eg DOS & “green screen” mainframe terminals.

2.0 = Windows Icon Menu Pointer (WIMP) in PCs and Macs.

3.0 = Smartphone touch

Yes, just when we all agreed on mobile first and mastered those skills….the game changes again. Apps have a problem because people are reluctant to install apps (it is the app tax friction).

The reason why ChatBots are UI 4.0 becomes clearer when we look at the next Prism.

Prism # 2. ChatBots = native UI for AI

How do we interact with those machines who appear human like in intelligence? One way is the same way that we spend a lot of time interacting with flesh and blood humans – via text messages. It is the perfect UI to hide all that complexity.

For our AI Week please click here.

Prism # 3. FB Messenger BotStore is like the Apple AppStore in 2008.

When the Apple AppStore launched in 2008, I caught a tweet by a friend that said in effect “this changes everything”. I did not get it at once so I called him and he explained and he was right. Thanks @alexiskold

The launch of Facebook Messenger platform with ChatBots on 12 April 2016 had the same inflection point significance.

6 weeks later VentureBeat was reporting 11,000 chatbots that you could try. Talk about Cambrian Explosion!

What are GAFAM doing with ChatBots?

• Google has Allo.

• Apple announced that Siri would open up to third-party developers.

• Facebook (already covered above)

• Amazon does it their own way as usual. Jeff Bezos always surprises. Their Alexa device is an AI machine in a home device. You don’t talk to Alexa with text messages. You talk with your voice – how cute and retro! It’s more VoiceBot than ChatBot, but conceptually both are UI for AI. Amazon has opened this up to developers.

• Microsoft is adding bots to Skype,

Apart from the giants, all major messaging services from SnapChat to Telegram (which has a good intro for developers) have initiatives.

What are BAT doing with ChatBots?

• Baidu has Duer, a digital concierge service.

• Alibaba has not made a move yet as far as we can see, but given their big ambitions in FinTech, we can expect it to be highly relevant when they do.

• TenCent has WeChat, currently the world’s biggest messaging platform with 700 million users, so they were early with ChatBots and have a digital concierge service called WeSecretary that helps users buy products, book restaurants, pay bills and other internet-based admin activities. It sounds more practical than SIRI.

ChatBot Account Linking

Facebook has an opt-in feature called account linking that allows you to, for example, link your Facebook account with a retailer. The ChatBot can then suggest new products based on a recommendation system. Watch out Amazon.

We expect this intersection of payments and e-commerce to be very active.

An example from Telecoms shows how this could work. You can chat to your Telecoms assistant to find out how much bandwith you have left or how much an international call will cost. That clearly has to link to your Telecoms account. Now imagine opening up to your banking accounts using PSD2.

Calendar for the rest of the week

Tuesday          ChatBots in WealthTech

Wednesday    ChatBots in Small Business Finance

Thursday        ChatBots in InsurTech

Friday               ChatBots in Consumer Banking

Please tell us about any use cases in those areas that you know about. We may already be researching them, but a heads up is always appreciated.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Bernard Lunn is a Fintech thought-leader.