The Bank of Montreal is taking a first step towards artificial-intelligence powered customer service by launching chatbots that can field questions via Facebook Messenger and Twitter.
The deployment of such technology is the latest move by a Canadian bank to beef up its digital capabilities as customers increasingly conduct their banking on mobile phones and computers, rather than over the phone or in a brick-and-mortar branch.
However, these chatbots – developed in partnership with Finn.ai – will only answer customer questions such as how to view their account balances or transfer money. They will not perform transactions, such as paying a bill, themselves, even though the Vancouver-based financial technology startup has the capability and some financial institutions are adopting it already.
BMO is exploring adding further functions to the virtual robots' repertoire, but is treading slowly to ensure customers' personal information discussed on platforms outside of their own digital properties is secure, said Brett Pitts, BMO's chief digital officer.
"We're not starting in a place where people are entering personal information, or making payments or balances or any of those type of things... We have to be very thoughtful about those elements before we are comfortable rolling out the next generation of features," Pitts said in an interview.
The chatbots have been fed with 250 of the top customer questions received at BMO's call centre and their websites and will learn over time, but customers will also have the option to talk to a live customer service representative on Facebook and Twitter during business hours, he added.
Other Canadian banks have either been testing or rolling out chatbots on Facebook and Twitter as well. In October last year, Calgary-based ATB Financial launched a virtual banking assistant in conjunction with Finn.ai that allows users to do transactions such as paying bills via Facebook Messenger. Also in October, Toronto-Dominion Bank announced an agreement with Kasisto to integrate its AI-powered interactive chat interface into the lender's mobile app.
TD and BMO are also among the financial institutions that have developed a voice app, called a skill, that allow customers to ask questions via Amazon's voice-activated assistant, Alexa.
These technologies can help these financial institutions both save costs and address higher volumes of customer requests.
The Big Five Canadian lenders have been in a technological arms race in recent years and have been ramping up investment and spending to stay ahead of the curve.
Last year, BMO increased its technology spending by 13 per cent, and expects that expenditure to grow in the double digits moving forward, its chief executive Darryl White told an industry conference in January.
Meanwhile, the physical footprint of Canada's five largest lenders is shrinking, as they close or remove more branches than they are opening.
In the 2017 fiscal year, these banks collectively opened or relocated 39 and 29 branches, respectively, but closed 170 brick-and-mortar locations, according to their public accountability statements. BMO closed 19 branches, but opened three and relocated nine in the 12 months ended Oct. 31, 2017.
Its a reflection of changing banking patterns among Canadian consumers. A 2016 survey commissioned by the Canadian Bankers Association shows that 51 per cent say online or internet banking was their primary method, up from 47 per cent in 2012. Mobile banking was the route of choice for 17 per cent of those surveyed, up from five per cent four years earlier. ATMs and tellers were falling out of favour, at 16 per cent and 12 per cent respectively, compared to 26 per cent and 17 per cent in 2012.
BMO will be investing in its traditional digital platforms, but will be looking at different ways to interact with customers, particularly in conversational interfaces, said Pitts.
"Clearly, there are a number of indications that we are going to be thinking more flexibly about digital distribution."