What U.S. banks can learn from global AI experiments

From Editor at Large Penny Crosman for American Banker

While several U.S. banks are working on and piloting artificial-intelligence-based virtual assistants — Bank of America, Wells Fargo and Capital One Financial among them — it’s all relatively new here. Banks in other countries are further along.

A look at some of the deployments in three of them — Israel, Canada and Hong Kong — could offer ideas and inspiration for those in the early stages, as well as insight into what is working and what is not.

A few takeaways: Bots are not just for millennials, document scanning can be the hardest part, and people are more comfortable asking questions of bots than they are of humans.


Bank Leumi officially launched the AI-powered, mobile-only bank Pepper in June.

Artificial intelligence lets Pepper provide what CEO Lilach Bar-David calls “contextual intelligence.” The AI engine analyzes customers’ transactions, what they are clicking on, how long they stay on specific data elements, and other data points to determine what should appear in each customer’s app.

This includes real-time, daily, weekly and monthly spending alerts and customized content including news articles and consumer tips based on the AI engine’s growing understanding of what the customer does, wants and responds well to.

“It takes time — the more you transact with us, the more we know about you and the more we leverage that data to give you personalized banking,” Bar-David said. “So my Pepper and yours won’t look the same because the feed will be based on our personal behavior.”

Pepper warns customers of potential problems — for example, if a customer continues to spend at his or her current rate, that customer will have a negative checking account balance by the end of the month. It might also tell the customer it’s OK to draw from savings to avoid that negative balance.

Pepper will eventually be three apps that can be used alone or together, linked with a single sign-on. The Pepper banking app provides access to checking accounts, savings accounts, credit cards and loans. Pepper Pay, launched in February, allows person-to-person payments. And an investment app is due to launch by early next year.

So far, a few hundred thousand users have downloaded the Pepper banking and Pepper Pay apps.

The goal is to help customers better manage their money. The bank conducted several surveys of the “global millennials” it targets with Pepper and found they were less concerned about fees because they don’t know how much they pay anyway, but struggled with lack of knowledge about banking in general and how to develop good personal finance habits.

Early adopters are not who Bank Leumi thought they would be.

“We were under the assumption that only millennials would get on board Pepper, but actually, more than half its users are consumers aged 35 and above,” Bar-David said. “It makes me think we’re reaching people with millennials’ state of mind more than an age.”

The bank is developing 24/7 human customer service for all three apps over voice, video and chat. When the customer starts a call or chat, agents will know who the customer is and what they have been doing; the AI engine will try to predict their questions.

Surprisingly, customers really like the video chat; they use it to help them navigate the eight-minute sign-up process.

The hardest part of onboarding, Bar-David said, has been having the app read information from the ID documents correctly in Hebrew. The workaround is to let people take pictures of their IDs and then type in the details from their phones.

Because design is important — “When they join a bank that’s only mobile, consumers compare you to Facebook, Google; the expectations are sky high,” Bar-David said — the bank hired 150 employees, many from tech startups, to create the mobile apps. It worked with the strategy design firm Designit on the apps’ look and feel, including a custom-made font. The core is Temenos’ software, selected for its affordability so Bank Leumi can pass those lower costs on to customers, Bar-David said.

Pepper is being given time before it is required to produce a return on an investment.

“On the one hand, it’s a strategic move for Leumi,” Bar-David explained. “They did it because they believe disruption is needed and consumers expect a dramatically better experience in the banking industry. On the other hand, we didn’t build a bank for fun. It has to be in the end a bank that’s profitable.”


In Canada, RBC launched a Personetics-based virtual assistant including financial guidance and automated savings features in September. TD Bank embedded an AI chatbot that uses Kasisto’s Kai software in its mobile banking app in early October.

Another large Canadian regional bank, ATB Financial, launched an AI virtual assistant for Facebook Messenger using Finn.ai’s technology in late October.

Comfort factor
People are willing to ask a virtual assistant questions they feel uncomfortable asking another human being, says Wellington Holbrook of ATB Financial in Canada. “There’s no fear of being judged,” Holbrook he says.
Though other banks, including Wells Fargo, Citi and TD Ameritrade, have Facebook Messenger bots, ATB says it is the first in the world to offer full-featured banking through Facebook Messenger.

“We’re always thinking of new ways to creatively compete with much larger competitors: How do we bring better service to our customers, how do we compete on scale?” said Wellington Holbrook, chief transformation officer at the bank.

“For financial institutions like ours, [a virtual assistant is] a bit of an evening of the playing field,” Holbrook said. “When you consider the complexity of bringing a lot of different services to our customers through traditional channels, it’s very people intensive, very cost intensive, and we’re at a disadvantage in terms of our relative size. The virtual assistant is an equalizer for us.”

A year ago, Jake Tyler, CEO of Finn.ai, and his team approached Holbrook to suggest ways the bank could provide more modern experiences.

“The virtual assistant creates a departure from the traditional ways of thinking about banking, to a much more modern way of thinking that has more in common with the way you interact with other types of organizations or your peer groups as a consumer,” Tyler said.

This increasingly means providing banking services through third-party platforms like Facebook Messenger, Google Assistant and Amazon Alexa.

Finn.ai, Tyler said, lets people do about 80% of their banking activities in a Facebook Messenger bot. Customers can pay bills, pay friends and transfer money between accounts.

“It’s the first time that full featured functionality has been available" within Facebook Messenger, Tyler said. “We thought it was important to do core banking activity for customers as the foundation for an assistant that will be useful to them.”

There is also a spending insight feature of which customers can ask questions like, “What did I spend at Starbucks?” or “When is my Mastercard bill due?”

ATB and Finn.ai are working to make the bot more helpful, so beyond telling customers when their bills are due, the bot might make sure they have enough money in their accounts to pay them.

Any question the bot cannot answer gets passed to human agents at ATB.

In testing the virtual assistant, Holbrook observed the same thing Darrius Jones has noticed in USAA’s use of Clinc’s AI-based Amazon Alexa Skill: People are willing to ask a virtual assistant questions they feel uncomfortable asking another human being.

“There’s no fear of being judged,” Holbrook said.

Holbrook’s biggest aspiration for the bot is to make it easier for customers to bank.

“The banking industry has been focused for a long time on driving efficiencies, making banking work better for us,” he said. “With the revolution of smart devices, we haven’t kept up with making experiences better for our customers. We see this as the beginning of ways we’re going to use tech to help customers make more out of their time, and create more happiness in their lives.”

Hong Kong

The latest noteworthy announcement of a customer-facing AI implementation is Standard Chartered Bank, which is based in London but has a presence in 68 countries. In mid-November, the company said it planned to deploy a chatbot on its online and mobile banking platforms using Kasisto's conversational artificial intelligence platform, KAI Banking.

The chatbot will help clients manage money, make payments and analyze their spending via natural conversations in English and other languages.

The plan is to take the bot live first in Hong Kong next year in English (subject to regulatory approval), then gradually deploy worldwide in multiple languages.

The bank is not ready to talk about the technology yet, but Zor Gorelov, Kasisto's CEO, said his company is teaching KAI Banking about Hong Kong regulatory rules and banking practices, as well as about Standard Chartered products to prepare for the rollout.

It is also teaching the software to speak “Chinglish” in text and voice communications: Sometimes people will start a sentence in one language and finish it in another, for instance.

Kai already understands much of the banking terminology used in different parts of the world, Gorelov said. For instance, it knows that “current account,” “CA” and “checking account” all mean the same thing. It knows that “FD,” “fixed deposit” and “certificate of deposit” are different ways of describing the same thing.

We’re learning everyday here at ATB and looking for insights anywhere we can. And, guess what, we’re hiring. Learn more about our open positions with our ATB transformation team here.


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