Back when Star Trek made its mid-’60s TV debut and “Enterprise to Computer…” entered our cultural vernacular, MIT professor Joseph Weizenbaum unveiled ELIZA, a chatbot prototype. Based on pattern matching and substitution methodology, ELIZA worked to mimic human conversation.
Let me fast-forward, now, as modern-day chatbots ‒ Alexa, Siri, Cortana, and more ‒ are helping humans play their favorite songs, remember their meds, learn the football score, order pizza, find a new home, or pay bills. The big news is that chatbots, the AI-based computer programs embedded and used through messaging apps, are sparking an evolution in the way business is conducted ‒ conversational commerce.
Generally speaking, conversational commerce exchanges are automated communications between businesses and customers via text, voice, social chat apps, or devices that enable firms to reach users to transact and support 24/7. Through personal experience, I can say that this type of interaction is compelling. However, as of 2019, only 4% of businesses had deployed conversational commerce, although adoption is on track to grow to 25% this year, according to a Gartner forecast.
In 2019, 40% of voice assistant users had begun using voice assistants within the past year, according to the Capgemini Research Institute. Notably, use is up in financial services (FS) channels. In the United States, the UK, France, and Germany, the number of consumers using voice assistants to pay for a product/service rose by nearly 20% from November 2017 to May 2019.
The rising popularity of voice assistants ‒ together with BigTechs pioneered social media messaging ‒ are fueling the adoption of conversational commerce. Apple (Siri), Microsoft (Cortana), Google (Google Assistant) and Amazon (Alexa) commanded 70% of the global voice assistant devices market in 2019. Moreover, two billion fans use WhatsApp (Facebook), and WeChat (Tencent) which has hit the one billion mark recently.
The uncertainty experienced by so many today is also boosting conversational commerce adoption, particularly in FS, where contactless and branchless banking has become a priority among many of the executives who my team has interviewed recently.
As COVID-19 dominated the headlines and Americans headed into lockdown and social distancing in mid-March, bank customer service centers endured unprecedented strain. Two Fortune-500 institutions saw call volumes rise 35%, and two weeks later, volumes were up nearly 60% at one FS firm.
In light of the wide-ranging impact of the worldwide health crisis, businesses are seeking new, leaner ways to engage consumers. Inefficient models are becoming a financial burden for organizations. What’s more, the rise of artificial intelligence and related technologies such as RPA, machine learning, and natural language processing, is spawning an era of intelligent automation.
It is no surprise that many traditional banks are now scrambling to automate customer channels. As banks continue to realign their focus on various distribution channels, conversational commerce presents a leaner and cost-effective way to enhance the customer experience. And, by reducing the workload of employees, banks can deploy staff on more value-adding initiatives.
I’m impressed by Hong Kong-based Standard Chartered, which uses its bilingual chatbot “Stacy” to interact with customers seamlessly while switching between channels. As per Efma, Stacy answers a range of questions with humor and a light-hearted personality. The bot, launched in 2019, answers more than 50,000 questions in Cantonese and English with 80% accuracy and an 85% containment rate while the bank’s live-agent volumes have dropped by 45% for significant cost-saving.
Our research found that less than 50% of the top banking players have deployed voice/chat assistants, however.
Before they get started, I recommend a structured readiness roadmap to help identify gaps in critical pillars such as people, business, and technology. FS innovators are using a hybrid framework that leverages the talents of ecosystem players to implement components of an automated conversational channel.
Want to learn more about conversational commerce? Look for Capgemini’s World FinTech Report 2020 Spotlight edition (slated to publish October 2020), for a holistic view of the state of conversational commerce in banking and ways to implement a mature conversational interface that can harness its full potential.