Financial services: AI chatbots vs USSD
It is common knowledge in Nigeria “Cash is King” as digital financial service offerings are still sparsely subscribed to across board.
Nonetheless, there’s some tangible growth in adoption evident from continuous increase in transaction volumes and rise in digital financial activity. A comparative analysis of quarterly electronic payments fact sheets from the Nigerian Interbank Settlement System Intelligence Unit is quite revealing of that bit.
Recently in March 2018, the Central Bank of Nigeria reiterated its financial inclusion drive to extend financial services to 60 million financially excluded Nigerians by the year 2020 with the Shared Agent Network Expansion Facilities (SANEF) initiative.
Like Tayo Oviosu (Founder & CEO of Paga) opined: “to significantly grow financial inclusion in Nigeria, we need to offer truly effective digital financial services that operates on all mobile telecom networks”
This brings tool options in view down to mobile applications, AI chatbots and USSD. Mobile applications as a tool for financial services is excluded in the further discuss because it’s unlike the latter two options as they are simplistic and much more convenient for mass adoption. They do not exclude the demography of users who are demystified by mobile app technology nor include the strain of having to download a traditional app for each bank or service one wishes to use.
USSD (Unstructured Service Supplementary Data) use for financial services came into prominence in 2016 when commercial banks in Nigeria started leveraging its use for financial services. Bank customers get to access a range of financial services (bill payments, funds transfer, check balance etc.) without having to visit the bank, all within the comfort of their mobile phone by simply dialing a unique short code. As at date, it is safe to say every commercial bank in Nigeria has a unique code offering USSD services.
The most appealing features of the USSD service would probably be the non-requirement of internet access to use as well as the non-specificity of devices. It works on smartphones as well as on feature phones.
Since the advent of Unstructured Supplementary service data options, number of transactions performed using the USSD service has more than doubled the number of transactions on mobile banking platforms for banks offering USSD — Mobile Money Report, MEF 2017
USSDs albeit providing a simple process to basic financial services are characterized with hidden bank charges and data security lapses. USSD operations are vulnerable to being hacked, and easy to access by a third party. Users stand the risk of losing money in their accounts when they have their phones or sim in the wrong hands. The sim data granting access to one’s bank information can get swapped hence granting privilege to a different user. These security breaches on the USSD framework calls for wariness on the part of users despite its service ease and convenience.
The CBN recently issued a regulatory framework with a list of guidelines expected to curb fraud and grant more security for the use of USSD in the country’s financial system but its implementation might be complicating issues for users.
Platform security however should be just as important as Convenience.
The aforementioned security breaches encountered in the use of USSD are better checked by the technology behind Artificial Intelligence powered chatbots. Ranging from user authentication, communication encryption, data tracking and retrieval, timely alerts and red flag calls on fraudulent transactions with the application of machine learning.
AI chatbots also do not require you having to memorize ambiguous USSD codes for different services and different banks. It offers much more flexibility to access services and is just as easy as chatting with a friend.
Smartphone usage in Nigeria is growing at a meteoric rate. Number of users have grown from about 4 million users in 2011 to about 40 million in 7 years with many of these users spending the most of their on-screen time in messaging apps. So it is imperative to provide financial services to users without modifying their existing usage patterns i.e. taking financial services to Facebook Messenger, Telegram, Skype and other messaging applications.
According to the Investor day presentation by MTN Nigeria on April 20, 2018, there are 38 million smartphone users in Nigeria and 14.8 million of this figure is on the MTN network.
Nigeria is uniquely the most mobilized country in the world, ahead of India and South Africa with about 80% of its access to internet coming through mobile. – Statcounter
Biyabot recognizes this potential need for AI chatbots and by means provides this solution as a service. Biya prides itself as the most seamless, generally far better technologically advanced product with availability on most platforms than any other in the Nigerian market and it is only just getting started.
Unsurprisingly, AI chatbots for financial services is fast gaining eminence across Nigerian commercial banks as they seem to recognize the need too. Earlier during the year UBA launched chatbot “Leo”, Diamond Bank also joined the race with chatbot “Ada”, Heritage Bank with chatbot “Octopus” and Access Bank with “Tamara” amongst others to provide simplicity and ease of access to banking services but they are about bank-specific in service and are available only on one messaging platform(Facebook Messenger).
Biya has the multi-bank and multi-messaging platform advantage over these dedicated bank chatbots. Any Nigerian bank user can utilize Biya to make payments after a one time registration using a bank account number or debit/credit card information on Facebook Messenger, Telegram, Slack or Skype. So it addresses a more general market.
A culmination of the advantages both options (USSD and AI chatbots) offer would however be a perfect option across board to include non-tech literate rural dwellers and feature phone users. An AI powered mobile wallet with a USSD-like trigger service that eliminates the insecurity attached to today’s USSD operations, the complexity of traditional bank operations, a smartphone requirement as well as the condition of internet connection. A winner to get everyone on board.
Hei.. a prototype
With AI, it really is a world of endless possibilities. At Biyabot (an artificial intelligence focused entity) we are committed to innovative development and deployment of AI tools to break boundaries on financial accessibility and service delivery.
