Banking Chatbots Could be Harming Consumers

Advocate Andy

Study finds AI saves banks money, decreases quality of customer service

A new study by the Consumer Financial Protection Bureau (CFPB) suggests that the use of AI-powered chatbots by banks could be decreasing the quality of customer service and in some cases, causing consumer complaints to go unresolved.

The CFPB notes it has received numerous complaints about chatbot customer service and an inability to reach human help in order to answer questions or resolve problems with accounts. While the use of artificial intelligence can save banks money, customers often report a lower quality of service.

“To reduce costs, many financial institutions are integrating artificial intelligence technologies to steer people toward chatbots,” said CFPB Director Rohit Chopra. “A poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law.”

CFPB data shows nearly 40% of banking customers report having interacted with their institution's chatbot in an attempt to resolve an issue. The widespread use of chatbots raises concerns around customer service quality and the length of time it can take to resolve a complaint. Customers often report an unsatisfactory resolution or no resolution at all, prompting additional time spent in order to address an issue.

The CFPB report outlined three specific ways chatbots can harm bank customers:

  • Noncompliance with federal consumer financial protection laws. Financial institutions run the risk that when chatbots ingest customer communications and provide responses, the information chatbots provide may not be accurate, the technology may fail to recognize that a consumer is invoking their federal rights, or it may fail to protect their privacy and data.
  • Diminished customer service and trust. When consumers require assistance from their financial institution, the circumstances could be dire and urgent. Instead of finding help, consumers can face repetitive loops of unhelpful jargon. Consumers also can struggle to get the response they need, including an inability to access a human customer service representative. Overall, their chatbot interactions can diminish their confidence and trust in their financial institutions.
  • Harm to consumers. When chatbots provide inaccurate information regarding a consumer financial product or service, there is potential to cause considerable harm. It could lead the consumer to select the wrong product or service that they need. There could also be an assessment of fees or other penalties should consumers receive inaccurate information on making payments.

The CFPB says it will continue to investigate and encourage banks to take steps to improve the service provided by chatbots and/or provide real-time human support in order to ensure accurate information and complaint resolution.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN

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