Things to learn from OCBC Bank’s chatbot initiative

The banking industry is one of the verticals leveraging chatbots effectively for customer relationship management.

A Forrester survey shows that 57 percent of firms globally are already using chatbots or plan to this year. However, most chatbots fail because of an unclear purpose and poor planning.

A case study of Singapore’s OCBC Bank shows that how a focused and disciplined approach can bring positive business outcomes.

The bank’s home loan department has been working on leveraging digital channels to drive leads for home loans. So, they developed the Emma chatbot.

OCBC’s home loan department, it’s financial technology (fintech) innovation center Open Vault, and natural language processing vendor CogniCor Technologies, are the three key stakeholders in the chatbot initiative.

Jonathan Lim, head of digital strategy for consumer secured lending, OCBC Bank, created a small team comprising a chatbot trainer and a home loan subject-matter expert (SME).

The trainer monitored the leads that the Emma chatbot brings and actively communicated with the home loan product team.

According to the bank, the result was amazing. Emma has become increasingly popular among OCBC customers since its launch in January 2017. Traffic to the chatbot tripled between January and April.

In just six months, Emma has generated S$33 million worth of home loan leads. By the end of June, Emma had already handled 40,000 inquiries, 10 percent of which it escalated to a human.

As Emma’s traffic continues to grow, OCBC expects to see the contact center’s workload related to home loans drop by at least 30 percent to 40 percent in the long run.

The bank has converted more than 10 percent of chat sessions to home loan sales leads and successfully facilitated the approval of S$33 million worth of loans.

More importantly, Emma improved customer satisfaction by saving customers’ time. Emma’s average response time is 1 to 2 seconds — a massive reduction from the average waiting time of one or two working days for an email reply.

Chatbots in healthcare & banking

According to Juniper Research, Chatbots will assist healthcare and banking sectors to achieve cost savings of over $8 billion per annum by 2022 from $20 million this year. These sectors can make cost savings because they van reduces enquiry resolution times.

Healthcare and banking providers using bots can expect average time savings of just over 4 minutes per enquiry, equating to average cost savings in the range of $0.50-$0.70 per interaction.

Outlook

Developments in the chatbot industry are definitely encouraging.  In May, networking giant Cisco announced that it’s buying MindMeld.Inc, an AI start-up for $125 million.

MindMeld developed an AI platform that enables customers to build intelligent and human-like conversational interfaces for any application or device.  Cisco expects this acquisition to power its collaboration suite.

Last year, internet major Google bought API.AI, a start-up that offers conversational interface for human-like bots. The acquisition of the chatbot technology provider was in a bid to challenge Facebook and Microsoft.

Recently, Santa-Clara based cloud company ServiceNow acquired Qlue, which creates virtual messaging agents.  It has also invested in BuildOnMe, which delivers a chatbot focused on HR.

With the addition of Qlue’s technology, ServiceNow will be able to deploy chatbots in organisations’ systems to answer HR related questions.

Technavio predicts that the global chatbot market is expected to grow at a CAGR of more than 37 percent during 2017-2021.

It says the BFSI sector had 40.72 percent chatbot market share in 2016, while government sector held 15.14 percent share. Retail and E-commerce firms had 14.56 percent chatbot market share, followed by travel and hospitality sector with 10.32 percent.