A bot walks into a bank …

This article originally appeared on VentureBeat.

Bots have landed.

It’s hard to believe only eight years ago, Steve Jobs stood on stage and announced Apple’s App Store — providing unparalleled distribution to anyone who owned an iPhone. With respect to personal banking, this game changing event forced banking executives to huddle inside a board room and put together a plan for this new “app” thing.

This past April it wasn’t Steve Jobs on stage, it was Mark Zuckerberg. At their annual F8 developers conference, Facebook announced the opening up of their Messenger API, meaning they are betting big on bots. For today’s banking executives, this “app” thing has become this “bot” thing.

Conversation is the new UI.

As appetite for apps grew and banks rushed to develop their own independent app, they removed a layer of friction for the customer for whom they held money, providing a clickable path for them to reach their personal finance information. Forced to reimagine the graphical user interface (GUI), banks jammed as much personal finance information as possible on a small phone screen. Some banks did this super well. Others like [insert your bank of choice] didn’t …

As apps removed a layer of friction, bots have removed yet another layer. The once necessary GUI layer isn’t always necessary anymore. Conversation is becoming an adopted design method in which customers can engage with a brand or business.

Banking + Bot = ?

As banks once competed in the arena of apps, they’ll need to compete in the arena of bots. Responding to natural language requests will become another facet of the customer experience. Institutions like Capital One are already on Alexa and Bank of America is building their bot on Facebook Messenger.

According to a recent article by Jim Marous, Co-Publisher of The Financial Brand and Publisher of the Digital Banking Report, “Millennials are the largest generation in world history, numbering 80 million and commanding $1.3 trillion in direct annual spending in the U.S. alone.” All banks are searching for ways to deliver new value and digital banking experiences to this generation.

So, how might your bank might experiment with a bot? Well, there are two key areas you might expect a bank to squeeze value out of a bot.

Leverage customer data to deliver real-time recommendations

Despite sitting on a mountain of personal data, banking doesn’t feel personal at all. Institutions are missing out on an opportunity to provide personalized recommendations at scale, especially when it comes to helping a person manage cash and grow into a financially secure customer.

According to Mary Beth Sullivan, Managing Partner, Capital Performance Group, “Banks of all sizes will leverage data and technologies to help customers make better financial decisions — improving the ability to save money, achieve specific financial goals, increase financial knowledge, better budget spending, etc. For many banks, this will entail partnering with technology partners rather than building in-house.”

Banks might consider building a bot who can lead a guided conversation to help a customer see the pros and cons of a personal finance decision. Having an honest dialogue around a person’s financial state is precious — and banks are missing this valuable opportunity.

Reduce friction to new products

Personal banking has always been about the right products, at the right time, for the right financial persona. Banks, with a contextual understanding of user data, might consider a bot an interesting channel to offer timely and well designed products directly to users.

Josh Reich CEO and Co-Founder of Simple said this: “Banks who don’t have a strategy to build authentic relationships with digitally native customers will continue to feel pressure as their customers leave their branches and head online.”1

Bots have landed and brought with them a new way for people to engage with their money. It’s so new in the world of financial product design. The guesswork of the GUI is gone. It’s an incredible opportunity for banks to win back brand trust and market share by delivering newly imagined value to a digitally-native generation.

If you want to talk more in depth about banking by bot, catch me at abe@abe.ai