Artificial Intelligence and online messaging platforms are joining forces to help users easily build their savings with chatbots. Millennials are accustomed to using these kind of channels to address personal admin chores, so it is logical that they tend to be the target market for tools like Charlie, a chatbot that is part of Propel Venture Partners’ investment portfolio.
The power of bits and bytes knows no limits. Two decades ago, for example, it was almost unimaginable that the world chess champion of the time, the Russian Garry Kasparov, was defeated by Deep Blue, a supercomputer made up of about thirty processors that together created 200 million moves per second. The machine's ability to react left Kasparov dumbfounded: “It didn't play like a machine, it played like the greatest chess player in the world.” Today, the power of technology is everywhere. It has even managed to sneak into our billfolds through new systems powered by artificial intelligence known as chatbots, which have been developed to help manage personal finances.
Such is the case of Plum, a Facebook Messenger chatbot that connects to user bank accounts with an algorithm that analyzes financial data. The tool monitors trends related to deposits, withdrawals, and spending data. From this analysis, it periodically siphons off a sum of money to be earmarked for savings. There is also a more advanced version that gives investment recommendations. Plum, which only works with accounts in the United Kingdom, was launched in 2016, and week after week it provides a report on the the amount saved. To access the money that has been stored away the user simply sends a message in the chat: “withdraw 10” to withdraw 10 euros, for example. To save even more, a simple message “save more” does the trick.
A tool after the heart of the millennials
A report produced by the consulting firm Accenture states that “Chatbots are becoming part of our daily life.” For example, in Facebook Manager, there are already more than 33,000 bots; whereas in the giant Chinese digital platform WeChat, there are more than 100,000. A veritable army of bots joined by other initiatives like Chip, Cleo, or the Peruvian Yuntas, all vying for a spot in the personal finance market.
A chatbot called Charlie has emerged from this ocean of innovation. Charlie is an intelligent text-based bot that helps people with poor financial knowledge easily manage their money. The tool, which recently received funding from Propel Venture Partners, BBVA’s venture capital investment fund, is focused on the U.S. market and identifies new ways to build savings, sidestepping high-priced financial instruments. The goal? To take care of customers' financial health so they are in a more comfortable position at the end of each month.
This chatbot, which introduces itself as a friendly penguin and addresses the user in a way similar to the famous – and now outdated – Clippy from Microsoft Office, is also available via SMS and Facebook. Its company acknowledges that the tool's target market mainly consists of millennials, the generation who reached legal age around the beginning of the twenty-first century. This generation is used to conducting the lion’s share of their personal transactions online and with a specific interest in savings, it is the main target for many of these type of products.
Another example: MyKai, a platform that helps track accounts and and answer questions about a user’s financial health. This chatbot was created by Kasisto, a company that came out of the the same Silicon Valley research laboratory that helped develop Siri, Apple’s digital assistant. The tool works with popular messaging apps through which it can access the most recent bank balance or produce a report on how much is being spent on specific items. How much did I spend on Uber last week? How much did I deposit in September? How much do I owe on all my credit cards? These are some of the questions MyKai can answer, but it can also address more complex questions: How does compound interest work? How is a credit ranking determined?
“The increasing sophistication of mobile technology has helped us exchange details, authenticate and conduct transactions seamlessly. Information is literally at our fingertips, eliminating the need for human support.” Vivek Belgavi, fintech expert and consultant at PwC writes in an analysis. He explains that until chatbots came about, human interaction held the advantage over technology: it provided a personal touch during a conversation. This characteristic, however, is being offset by other positive aspects offered by the tools. Chatbots are “designed to understand, learn, and converse like a human and answer ad-hoc queries in real time,” he adds.