Who Wants to Chat with a Robot? Turns Out, Everybody

 Credit / Attribution - Print © Can Stock Photo Inc. / iLexxMicrosoft is teaching bots to chat more like humans, and it’s set to radically change the way we interact with businesses.

A recent Wired piece describes the progress made in Asia by XiaoIce, a stripped-down version of Cortana, Microsoft’s virtual assistant, which was launched in 2014. The bot is programmed to interact in a human-like, “chatty” way with humans, which seems to mean, among other things, not going straight to the heart of the matter. (Think of the first few minutes of a conference call.)

This is very interesting for social media and search engines, but will it fly in financial services? What would the regulators think?

It’s a hit on social media in China and elsewhere in Asia, in any case. XiaoIce banters with some 40 million users, and chats last an average of 23 turns. Why would users who know they are talking with a machine prattle on like this? Simple, they can’t help it. “Chitchat is a basic human need,” says Harry Shum, head of Microsoft technology and research, told Wired.

The movie “Her” immediately springs to mind, with a human engaging emotionally with a machine. The success of artificial intelligence will reside not in what bots know, it seems, but in how effectively they interact with humans. (A similar case might be made for dogs.) Responding to human requests in a way that humans respond to is the essential ingredient.

Dominic Venturo, chief innovation officer at U.S. Bank, noted that XiaoIce is an interesting approach to the AI problem. “People can tell they are not talking to people, and if the AI is too good, it can give people an uneasy feeling.” XiaoIce is just good enough — just like your friends. Well, hopefully your friends are good enough.


Example of Dyme’s persona-based savings tool.

Is the human element helpful even in wham-bam bank transactions? Do we want chit chat when we move $50 from checking to saving? The startup Dyme thinks so. The text-to-save app uses a stripped down version of this stratagem with its customers, who can choose from a variety of “personas” to cheer them on or cajole them into stashing savings.

It is not difficult to see offerings like Dyme’s growing more and more complex and interactive, and humans responding positively. XiaoIce or similar applications seem well-suited to work in roboadvisors or personal financial management software for text-loving millennials. But it will appear first in a nonfinancial context — keep an eye out for it.

We’ll all be chatting with robots soon, and presumably they’ll know enough to learn our kids’ names — maybe they’ll even be able access our camera rolls to see pictures — and they’ll even pretend to care! <b> Can. you. dig. it. </b><&#33;>

Learn more about the future of fintech at Bank Innovation 2016, Feb 29-Mar 1 in Seattle. Click here for details.

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Philip Ryan is Senior Editor of Bank Innovation and Senior Director of INV Fintech. He began covering financial services in 2012 and has more than 15 years' experience in online journalism, which makes him quite old. He can be reached at pryan@royalmedia.com.

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