Banking Chatbots Have ‘Harmed’ Consumers, According to New Fed Report

Chat bot  service concept.
Galeanu Mihai / Getty Images/iStockphoto

If you bank online, you may have used a chatbot to resolve a conflict or find an answer to a question. The top 10 largest commercial banks all use chatbots as part of their customer service repertoire. Roughly 37% of people in the U.S. interacted with a bank chatbot last year, according to a new report from the Consumer Financial Protection Bureau (CFPB).

While chatbots offer a few benefits — including 24/7 availability, fast responses, and access to a vast library of information — the report shows that there are several drawbacks to chatbots and, in some cases, they can cause more harm than good.

“A poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law,” said CFPB director Rohit Chopra in a press release describing the report.

It may be worth examining potential drawbacks when it comes to using chatbots for your banking, and why these limitations exist.

Chatbots Can Deliver Inaccurate or Incomplete Information

Chatbots designed around rules-based language models rely on consumers asking the right questions to get the information they need. If you don’t phrase the question correctly, the chatbot could deliver inaccurate information. Or, it might send you to a FAQ page with a general response that may not apply to your situation.

Getting inaccurate information about banking products could lead to financial risk, unnecessary fees, and even loan defaults.

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Failure To Protect Customer Security and Rights

The CFPB found situations wherein a customer was trying to escalate the problem to a human customer service rep and were unable to reach a live person. They may have even been trying to invoke their federal rights.

Out of frustration, the consumer may enter personal information, which can pose a security risk. In general, you should not share account numbers or your Social Security number in a chat conversation. But, out of desperation and to streamline the conversation, you might be tempted to do so. This can create a security risk.

Lack of Customer Service and Diminished Trust

When a bank fails to provide satisfactory customer service — through automated chatbots or human representatives — it erodes consumer trust in that bank and the banking system in general.

“The deployment of deficient chatbots by financial institutions risks upsetting their customers and causing them substantial harm, for which they may be held responsible,” the report warns.

If you’ve received unsatisfactory customer service from a chatbot, it’s always best to reach a human being, either at a bank branch, by phone, or online. You can file a complaint about your financial institution at CFPB’s website or by calling 1-855-411-CFPB (2372).

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