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WATCHLIST

MONEY 20/20
Bank of America launches AI chatbot
Erica here's what it does
Harriet Taylor | @Harri8t
Monday, 24 Oct 2016 | 1:40 PM ETCNBC.com

Joe Daniel Price | Getty Images

The Bank of America headquarters in Charlotte, N.C.
If you're not great at managing your finances, Bank of America's new chatbot is there to
help.

Monday at the Money 20/20 conference, Bank of America's president of retail banking,
Thong Nguyen, unveiled an artificially intelligent bot to help customers make smarter
decisions.

The new digital assistant "Erica" a play on the bank's name will be available inside
the bank's mobile app staring next year. Customers can chat with Erica via voice or text
message.
With Erica, the company hopes to help consumers create better money habits, said
Michelle Moore, Bank of America's head of digital banking. For example, Erica might send
someone a predictive text: "Michelle, I found a great opportunity for you to reduce your
debt and save you $300."

Click the text to launch the app, and get Erica's advice. "Based on your typical monthly
spending, you have an additional $150 you can be putting towards your cash rewards
Visa. This can save you up to $300 per year."

Though many banks have bots with some level of artificial intelligence, the customer
experience has not always been great, said Daniel Latimore, senior vice president of
Celent's banking practice. Consumers are now accustomed to the types of seamless
mobile experiences provided by apps like Uber and Airbnb and want better banking
experiences, he said.

"The whole notion of customer experience for banks is so, so critical right now," said
Latimore. "They have challenges like security and being bulletproof but consumers
don't care about all the constraints. They just know they can get great experiences
elsewhere and they want it from their bank too."

Erica will use artificial intelligence, predictive analytics and cognitive messaging to help
customers do things like make payments, check balances, save money and pay down
debt. She will also direct people to look up their FICO score and check out educational
videos and other content.

Through Erica, Bank of America hopes to extend some of the benefits of the one-to-one
personal service and advice usually reserved for top-tier customers to the masses, said
Moore.

The bank's customers did more than 246 billion payments in the third quarter. Mobile
banking customers logged into their accounts more than 950 million times or 46 times
per user over that same period. With all that data, BofA has a good idea what sort of
queries to program into the algorithm behind Erica's brain, said Moore.

Of course, unlike the bank's human employees, she will be available 24/7 to provide
guidance and execute transactions.

Artificial intelligence has been creating a lot of buzz so far this year, particularly in the
tech sector, with executives from all the major tech companies highlighting its
promise. Six percent of U.S. jobs including some in customer service will be lost to
artificial intelligence within the next five years, Forrester has predicted.

Erica is designed to streamline the banking process, not replace jobs, said Moore. This
makes sense, as this type of technology is still very young, and correspondingly limited in
what it can do. Over time, Bank of America's programmers will add new features and
make Erica "smarter" thanks to the vast amount of data she will handle.

Intelligent assistants have the potential to greatly improve customer experiences in

banking, said Forrester analyst Peter Wannemacher. That said, so far banks' bot
experiences have been "uneven or poor," he said.
"It is not a foregone conclusion that this will work the way everyone thinks it will," he
said. "The big question is whether Bank of America can and will react appropriately to
customers use of and engagement with their digital offerings."

On stage, Moore also announced that the bank's customers will be the first in the industry
to try out Zelle, a new peer-to-peer money transfer service that will compete with PayPal's
Venmo that was announced in August and, starting in 2017, customers will be able to
take out or deposit cash at ATMs through their mobile banking app.

Harriet TaylorCNBC Tech Reporter

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