The Bots Boom And The Future Of Financial Responsibility

Chatbots are taking over the world.

Or so it seems. Consumers can now book a flight, hail a ride, reserve a hotel room, buy shoes, manage their bank accounts online — now all without ever leaving the comfort of Facebook Messenger.

There is just one tiny fly in the ointment. Bots might be the future, but “the future” accurately describes any and all the time between next week and when Elon Musk successfully colonizes Mars (and beyond).

And while that bot-based future may well be glorious, it isn’t quite here just yet. For a simple reason, the bots are, well, still learning how to interact with humans correctly, and the learning curve has been a bit steeper than some had initially predicted. Said simply, the average bot is just not smarter than a sixth grader.

“Chatbots are primitive. In fact, many of them are primitive to the point of being annoying, if you can figure out how to use them in the first place,” Karen Webster recently wrote of the burgeoning bot hysteria. “Most of the time, I just want to punch Poncho the Weather Cat since all I want is the weather when I ask about the weather. Spare me the cutesy icon that tries to make a joke about it. We take our weather very seriously in Boston. Shopping with a bot is tedious — it takes 20 exchanges to finally get a link to a just-OK pair of black pumps that you have to then go outside the bot to the retailer site to buy.”

And Webster is not alone in these observations. David Marcus, president of Facebook Messenger, whose big bot announcement early this year sent a million developers off to build an army of chatbots, has noted that bots are still in their embryonic phase and will need to undergo several rounds of evolution before they become a truly useful and desirable part of the ecosystem. Wired made a similar point over the summer. Bots are at their beginning and, as such, work better in concept that in actuality.

Whoops. Bloomberg may have jumped the gun in declaring apps dead and bots the wave of the future.

But Cleo, a London-based FinTech firm using bots to offer customers “an intelligent assistant for their money,” seems to be thinking about bots in a slightly different way. Instead of trying to replicate a feature already available through various financial services apps, Cleo is honing in on using chatbots in ways that it believes are, by design, better at providing services for customers.


How Cleo Works

Launched to the general public (in the U.K.), Cleo has been around in beta for about a year. The concept is fairly simple: Consumers allow Cleo to plug into their various bank and card accounts, and Cleo will gather information on where, when and how the customer is spending.

Then, it “talks” to them about financial responsibility and how they can take steps to better manage their funds.

Cleo is not designed to be pushy. The app isn’t designed to nag or shame customers about their funds so much as it is designed to make it transparent to customers where they are spending and how much they are spending.

“We’re focused on making managing the consumer’s money really really simple, not roundups or microsavings,” Cleo Cofounder and CEO Barnaby Hussey-Yeo noted. “It’s for people that would rather not spend a couple of hours every week in a spreadsheet trying to manage their cash.”

Instead, Cleo manages “the boring stuff” of categorization of expenditures on the back end and then compiling it into easily digestible bits of data on the the front end for consumers.

For example, Cleo makes it easy to look at total account balances or check in with what bills will need to be paid, or to zoom in on where they are doing a lot of spending.

The conversational interface boosts the experience in a twofold way. One, it creates a fairly short and direct path for consumers into a transparent relationship with their spending.

Apart from mere transparency, however, Cleo also offers advice — again in easy-to-digest, upfront, chattable packages.

“We try to deliver actionable ways to save in 140 characters or less, in real time using live data,” Hussey-Yeo noted.

Those recommendations vary, Cleo noted, and vary over time as the the system learns more about the users and their favored spending patterns. Broadly speaking, however, the current focus is on areas like managing subscription services (and keeping customers current on which things they are paying monthly for), optimizing day-to-day spend and finding more efficient financial products.

In the long term, Cleo is looking to expand internationally — particularly into the U.S. — and expand its services menu. Cleo doesn’t just want to use data and an AI-moderated relationship with consumers to recommend financial products; it eventually wants to leverage that data and access into building and offering better financial products for consumers.

But to get there, it has a user base to build up, and though the beta year has gone well and social media reports from Facebook indicated the launch day was going well (other than some reports of server slowness early on), it still enters a competitive field.


Interesting Timing

As Cleo was announcing its public launch yesterday (Oct. 10), so were two of its competitors: Plum and Chip.

Plum and Chip work in a similar fashion to each other, though in a rather different way from Cleo. Both plug into the back end of a user’s account, monitor the customer’s spending habits and then determine how much they can afford to save.

Then, they automatically deduct those savings and place them into an app-based savings account.

Plum is built to run within Facebook’s Messenger program.

Trokoudes also noted that Plum chose to focus its efforts on Messenger because that is where its users are already digitally hanging out.

“We believe that the real secret here is making financial responsibility run in the background of our customers’ lives.”

Chip, on the other hand, built its own iOS and Android chatbot app.

“We have built Chip to help our friends/peers have a happier and healthier relationship with money,” the startup noted. “How? Prove they can actually save and actually afford to save. It’s possible for anyone, whatever you earn, however bad you are with money.”

That seems like a lofty claim since there are certainly levels of “bad with money” that would be hard to address with any level of technological innovation less powerful than a shock collar.

But the chatbots that want to talk to consumers about money and use a conversational interface to give customers a better way to quickly access how they are spending and saving could be a better use case for chatbots than having a cat make jokes about the weather.