Money 20/20

Facebook banking bots mean you may never have to sit on hold with your bank again

Sigrid Olsson | Photo Alto | Getty Images

Financial services businesses are quickly launching new Facebook Messenger chatbots to improve their customer service experience, an area where banks have often lagged.

On Tuesday, Mastercard unveiled a new chatbot for banks and merchants to help them deliver better mobile experiences, something consumers now expect.

"We are seeing consumer preferences shifting and we want to make sure that we stay relevant," said Kiki Del Valle, Mastercard SVP of commerce for every device.

The bot — which launches first in the U.S. next year— is nicknamed "Mastercard KAI." The company announced the new bot on Tuesday during the Money 20/20 conference in Las Vegas.

An image showing how the KAI-powered Mastercard bot for banks will work.

Facebook Messenger now has over a billion monthly active users, and is already a crowded space for Messenger bots, with more than 33,000 chatbots on the platform. Almost $2 billion in online sales will be conducted by mobile digital assistants by the end of 2016, Gartner has predicted.

Banks can customize Mastercard's bot — which will use artificial intelligence to communicate with customers through text messaging and speech — or integrate it with their own bots.

Users connect their cards within the Messenger app and can then ask questions about accounts, check purchases and monitor spending. When customers make a purchase, the bot will remind them of cardholder benefits, like purchase protection. It will also send offers based on a user's location and guide them to educational content to help them make better financial decisions.

Financial services companies have a huge advantage in engaging with customers on Messenger because they already have so much information about their customers. They also handle transactions that are closest to customers' hearts: money.

American Express bot for Facebook Messenger
Source: American Express

American Express was the first financial institution to launch a Messenger chatbot, which it announced in June and rolled out in August.

"This is a really unique way to have a conversation with the customer about real benefits for them that are really unique and they want to use with their cards," said Matt Sueoka, vice president and head of mobile payments at American Express.

A team of several hundred developers worked closely with Facebook engineers to build the bot, which was developed so fast the company called it "warp speed," said Sueoka.

The platform provided the perfect place for AmEx to engage with its customers and remind them about cardholder benefits, he said. For example, premium cardholders get access to lounges at airports so the bot might send them a reminder of that benefit after they purchase an airline ticket, said Sueoka.

An AmEx bot can serve up restaurant recommendations, pulling in reviews from partner site The Infatuation. Travel and dining are inherently social activities, with people often "checking in" on social media throughout their journey, which makes it a great fit for AmEx customers, said Sueoka.

"It's this natural platform that creates inspiration for how we think we can reimagine service, and that is inspiring and exciting," he said.

Chatbots are seen by many in the financial services industry as a key new way to reach customers. Bank of America Merrill Lynch announced that it is taking a different approach. BofA has developed its own chatbot — Erica — which will live inside the company's own banking app.