Banks should not underestimate Facebook Messenger

This post was originally published at Techcrunch.

Before you say that Facebook is no longer perceived as cool with today’s youth, do you know what is even less cool? Banks.

When you break down the numbers, coolness becomes less relevant. When it comes to user engagement, Facebook’s reigns supreme above all others. WhatsApp has exceeded 1 billion users, and Facebook Messenger reports 900 million users, handling 60 billion messages a day combined — three times the number of traditional text messages.

The combination of chat and payments have already proven to be a great success, as exemplified by the launch of Facebook Pay, Snapcash by Snapchat, WeChats integrated payment solution and Kakao Pay in Kakao Talk in South Korea.

However, the potential for chat apps in financial services is by no means limited to social payments. Facebook has already confirmed that they are pursuing Wechat’s success, venturing into eCommerce. This is only the beginning. The introduction of chatbots on the Facebook messenger platform could revolutionize the way we look at relationship banking. Digibank in India is based entirely on a chat interface, and allows its customers to do all their everyday banking needs through a chat interface. Even opening their initial bank account. By applying machine learning and natural language processing, the chat interface is able to handle a wide variety of everyday banking use-cases that was previously solved by navigating through user-unfriendly mobile banking apps or contacting customer service representatives.

Facebook messenger’s  chatbots will have a significant impact on banking, and is predicted to usher in the end of the app-era. By transitioning from graphical UI til conversational AI, a majority of banking services could be automated through simple chat request like “what is my daily spending limit until my next paycheck” or “approve and pay my outstanding bills”. The impact of chatbots is not limited to simple daily banking requests. AJ Bell is aiming to utilize Facebook chatbots to offer trading services for investors, as well as Personetics that delivers personalized financial guidance to customers everywhere through their AI-powered chatbot.

The bots for messenger platform represent a unprecedented opportunity for incumbents to increase customer engagement. Banks are in possesion of vast amount of user data that is invaluable for unsupervised machine learning as well as intangible know-how through years of experiance for supervised machine learning.

Chat apps and virtual assistants is predicted to be the future of user interaction, and may even replace traditional web browsers and traditional online search as we know it. Banks should not underestimate the disruptive power of chat apps. Remember, it was a banker who once said: The horse is here to stay, but the automobile is only a novelty – a fad.