Investing in chatbots could be the trendiest thing a company can do this month.
Just last week, 11 new bot-related startups caught the eye of cloud-based team collaboration tool Slack. The company decided to not only invest in them but use them to build out its bot portfolio in order to keep its competitive streak up. In case you’re keeping count, Slack has now invested in 25 bots in 13 months. In Dec. 2015, Slack launched its $80 million Slack Fund, and then, the company made three rounds of investments. Accel, Andreessen Horowitz, Index Ventures, Kleiner Perkins Caufield & Byers, Spark Growth and Social+Capital are all involved in the fund.
“Bots help increase productivity, so it makes sense that a company focused on increasing workplace productivity would invest in the bot developer community,” said Rob Guilfoyle, cofounder and CEO of Abe, which builds AI-powered banking chatbot software for progressive banks and credit unions. “The Slack platform has the most mature bot ecosystem of any platform, which is why companies are putting their technologies on Slack first.”
Guilfoyle, as well as other experts, see investing in the bot community as a smart move for Slack. The company has been a developer-centric platform, and by building up the products that people use on its platform, Slack may well be increasing the utility and desirability of the platform and positioning it as an all-in-one operating system for businesses.
“Slack’s continued investment in the bot community is a clear sign that bots are here to stay and will only become more prolific and sophisticated in the next few years,” said Guilfoyle.
As for new bots this week, Digit launched one. It’s a savings bot, which aims to “humanize” the experience with consumers as it lives on Facebook’s Messenger platform. The San Francisco-based company said this will allow users to communicate with the company in a space they are already spending a lot of time. To date, the Digit app — operating on SMS and mobile — has saved users more than $350 million. The app works using an algorithm focused on the user’s income and spending patterns to tap off a small amount from the checking account and move it into a safe, savings account for later activities, like bills and holiday shopping.
“A savings bot is something that can be helpful to consumers,” said David Sosna, cofounder and CEO of Personetics, which combines financial intelligence and conversational proficiency with advanced cognitive capabilities. “We believe consumers are more likely to adopt such bots if they are offered by their existing banks and integrated with their overall banking experience — whether it is within the bank app, on Facebook Messenger or on other messaging platforms.”
Last year, Personetics launched the MoneyCube savings bot, which, according to its website, “enables financial institutions to engage in a conversation with customers through multiple digital channels — the bank’s app, Facebook Messenger, Amazon Alexa and many additional messaging platforms — delivering timely insights and advice to help customers reach their financial goals.”
Sosna said that it’s still early, but over the next six months to a year, more banking bots will pop up. Some may have limited functionality at first, but then, an evolution will take place.
“There will be some that will try to bite too much to begin with and will probably fail. So, success is probably going to be uneven for the next few years, but eventually, more mature solutions will prevail,” said Sosna.
Indeed, many organizations feel similarly. In fact, three-quarters of financial institutions say they’ll have a chatbot in two years or sooner. More than that say most of their customer conversations will happen via chatbot in five years or sooner.
That key word, however, according to experts, is “sooner.”
“I definitely agree with that timeline, and I would even advance it to sooner,” said Guilfoyle. “Chatbots have the potential to completely transform the financial services industry by streamlining and enhancing the current digital banking experience. As banks and credit unions compete to provide the best customer experience and win valuable market share, chatbots will be adopted more frequently and rapidly.”
Other experts agree with Guilfoyle, saying that consumers are craving interactions that are both personal and instantaneous, and chatbots will be able to indeed provide that experience.
“Chatbots will become the leading driver of communication between brands and their customers,” said Erez Baum, cofounder and CEO of imperson, a chatbot technology company. “With more than 2 billion people already on messaging apps, a five-year timeline is conservative. It would be wise for B2C brands across all industries to incorporate chatbots into their strategy. Messaging is already preferred over email and telephone.”