During an excellent fireside chat about the future of payments at Money20/20 Asia in Bangkok Farhan Ahmad, the CEO of PayNet (Payments Network Malaysia), made many interesting points, particularly around the need for a strategic framework for dealing with the coming change to bots, rather than people, as customers. Financial services organisations of all kinds have years of experience in selling to people. But how do you sell to a bot?
Bot Preferences
What is it that bots will be interested in when they come to select a financial services provider then? As I asked here recently when talking about Business-to-Robot-to-Consumer (B2R2C) commerce, what is the marketing department of a financial services organisation supposed to do?
The bots won’t care about the Superbowl commercial or the race team sponsorship. They will be supremely indifferent to brand colours and logos. And the technical nature of the trust demanded by a AI (which depends on digital signatures, authentication schemes and liabilities) is a very different thing to the trust of consumer in an offline world. The bots will access services via APIs that bypass insurance company web pages, bank apps and call centres.
What this means is that we may see financial services companies beginning to develop new APIs to support the needs of bots rather than people since bots can search through more data, access more sources and process more transactions than any person might do.
So what would bots be interested in? What should a fintech pitch a robot? I would imagine that one place to start would be grade of service and quality of services, the old GoS/QoS pairing that I remember so well from my early career in secure and reliable communications. A bot would care about the API availability (99% or even 99.9% is nowhere near good enough for a bot that’s going places) and response times (100ms! You must be joking!). Levels of service acceptable to a customer may be completely unacceptable to a bot. I think the accuracy of the data would be a factor too. Bots would have zero tolerance for bad data!
Security and private would surely be a key factor. My bot would be instructed to choose secure over insecure channels, post-quantum secure where possible. And it would demand privacy: an API that tells you a counterparty IS-OVER-18 rather than hand over a date of birth is much preferred.
Implications
In a recent paper on “Implementing artificial intelligence empowered financial advisory services” in the Journal of Business Research, authors Hui Zhu, Olli Vigren and Inga-Lill Söderberg note that unlike other technological innovations in financial services (eg, ATMs, digital wallets and internet banks), bots replace frontline employees in delivering advisory services. These services, provided by banks themselves or (more likely) BigTech, provide advice on financial planning, investments and asset management. Unlike customers in various other service sectors, those engaging with financial advisory services tend to maintain prolonged commitments, such as long-term investments, while also facing the risk of potential asset loss if their chosen financial products underperform. In other words, they are either helping customers to make really important decisions or are making these decisions for them., but choosing a pension plan is not the same as choosing a mobile phone or a holiday AirBnB.
Therefore the bots must be built using “explainable AI’ (XAI) and operate within a regulatory framework (eg, the Financial Conduct Authority’s duty of care) according to well-define principles that put the customer first. If this can be achieved then the implications of retail financial services are profound. As the noted fintech investor Matt Harris over at Bain Capital Ventures wrote recently, such a bot given to customer by a retail bank might say
Right now, we pay you 1.2% on your deposits, but you could get 4.85% at XXX Bank. You are paying 10.5% on your auto loan, but you could get an 8.75% rate at YYY Finance. You paid $450 in fees in the last 12 months in fees, but with a ZZZ checking account you would have paid $0 in fees. RUN!
Well, indeed. Run. If I were a bank, I would be more than mildly concerned about this clear and present danger to my profit pools and would be developing a strategy to respond to the inevitable.
Visions
Back at Money20/20 Asia, Farhan also said that if you are trying to develop strategies for the longer term, then ”don’t ask consultants about the future, ask science fiction writers or historians”.
(I could not agree more, which is why I enjoyed taking part in the creation of the Cybersalon collection “All Tomorrow’s Futures”, an anthology of future fiction recently launched in the universe and a metaverse simultaneously at the British Science Fiction Convention. I advised some the authors and wrote an afterword for the future of money section.)
Which writer though? When it comes to an overarching vision of the future, I rather like the perspective of the renowned science fiction writer Arthur C. Clarke, the man who predicted communication satellites and very accurately predicted in a 1964 interview with the Australian Broadcasting Corporation (ABC) that “Men will no longer commute, they will communicate”. He once commented that “The goal of the future is full unemployment, so we can play”. I have to say that I find this an admirable manifesto for change. A world in which we can all play Dungeons and Dragons while the robots make everything we need is a world worth fighting for.
