As promised, after all the recent hot talks about chatbots in the fintech industry, we’ve started to explore how the most successful of them work.
Trim: AI assistant that cuts off recurring charges
To get started with this subscription management chatbot sign up at the official website. Then, provide the required short amount of info on your credit card or bank account, username, password, and a phone number.
Trim chatbot supports more than 15,000 U.S. financial institutions, including Bank of America, Capital One, USAA, Chase, Wells Fargo, PNC, and US Bank. If your bank is not on the list simply email Trim for support.
How Trim chatbot works
After the banking activity review, it texts you a report that contains the list of subscriptions, monthly prices, insurance premiums, and utility payments.
It will take you a few seconds to cancel subscriptions you don’t need any more: simply type “Cancel (name of subscription),” and get a confirmation text message from Trim.
Then the AI-powered chatbot cancels the unwanted subscription via chat or the website. There is no Trim app, only a chatbot that can be linked to SMS or Facebook.
“People prefer to use the messaging interface,” mentioned CEO and co-founder of Trim, Thomas Smyth. “Anything that you can do on your mobile banking app, you can do with Trim with the exception of moving money,” he added.
How does Trim save money?
First of all, the chatbot analyzes and shows the user’s transaction history.
Trim’s algorithms scan the user’s bill, then searches for merchant names that are known to use recurring payments. Netflix, Comcast, premium LinkedIn or Grammarly accounts, monthly subscriptions – are just a few to name. This method identifies 98% of user’s subscriptions at once.
Then the system searches for the same amount recurring bills to the same trader in the following months.
“We leave out merchants like coffee shops, where you may be buying the same coffee every week but it’s not a subscription,” – mentioned on Trim’s official FAQ page.
You don’t have to cancel a subscription at that very moment; you can do it at any time. Trim will continue monitoring your accounts for subscriptions and services.
Trim Chatbot Message
This particular money-saving chatbot is also partnering with other subscription-based service providers to help its customers find lower bills and save more.
For instance, if you connect a Comcast account, the chatbot will always be checking if it’s possible to lower your bill with available promotions and discounts.
By linking your Visa credit card, Trim bot will automatically look for coupons and promotions for the places you shop. Once you’ve applied the discount, you will get a credit to your Visa card. It helps to save on groceries (including $10 off your first grocery store visit), dining, and retail purchases.
When you open Trim’s dashboard (available in a browser) you will see some other savings tools. For example, there is a section for auto insurance. Type in the year and the model of your car and shop for better insurance rates.
How does Trim make money?
For features like Comcast bill negotiation, Trim gets interested in what was saved to a customer (25%).
The company is also compensated by third-party partners, like credit card issuers, for referring customers to their partners. Now, the service is free of charge, but Trim’s CEO claims that ultimately they plan to monetize by charging for advanced features.
Though, the main features of this subscription management chatbot (e.g. review and cancellation) are supposed to remain free of charge.
Chip: a savings app with a conversational interface
All of the automatic savings apps are designed to help their users save money as easily as they spend it.
For instance, Chip saves money based on a user’s spending behavior. Users also have an option to save while overdrawn, reserving “a few bucks” every couple of days until it’s enough to pay off all the debts at once.
However, you can break your virtual piggy bank at any suitable moment and start using your savings.
To start saving money you simply connect Chip chatbot to your current account by entering your name, birth date and the address where your current account is registered. Nothing else, it is that simple.
Chip works only with 12 banks currently. You can find the full list of banks on the official webpage, it includes Barclays, HSBC, Santander, Lloyds, NatWest, Nationwide, RBS, TSB, Halifax, First Direct, Co-operative Bank and Metro Bank accounts.
This AI-powered chatbot uses secure cash savings account at Barclays, so your savings are kept in an instant-access and protected the place. The account is created automatically during the sign-up.
How does Chip save money?
According to the company, Chip’s algorithm calculates how much you can afford to save, without having an impact on your life.
Chip automatically transfers small amounts of money from your current account into your Chip savings account, every few days.
When you sign up, you give Chip permission for read-only access so that it can see the transactions info in your online banking. This is how Chip gets to know what you are spending.
As opposed to Trim, it is possible to link only one bank or credit card account to a single Chip account.
Chip is regulated by the Financial Conduct Authority (FCA) through its agency status with Prepaid Financial Services (PFS).
Plum: a Facebook Messenger chatbot for stress-free savings
Same like Chip, Plum FB Messanger AI-powered chatbot also monitors your spendings and automatically sets money aside.
The process of signing up is as natural as in each of these money saving apps: the first option is to find Plum on Messenger, the second – to sign up on the web.
You can contribute to the savings you have in your Plum account and earn up to 3% interest due to the RateSetter.
RateSetter is one of the biggest peer-to-peer lending platforms in the UK, which Plum is partnered with. You can easily access that money at any moment with no fees charged.
Plum transfers your savings back within 4-5 days. The financial system is authorized and regulated by the Financial Conduct Authority (FCA).
You can learn more about RateSetter’s protection on their official website.
How does Plum save money?
Plum chatbot features AI algorithms that make a constant analysis of the user’s transactions. This is how it learns about your income, expenses and spending behavior.
User accounts are created and administered by Plum’s partner MangoPay (the European Union licensed financial institution); savings are held as e-money at Barclays.
How does Plum make money?
Plum’s founders Victor Trokoudes and Alex Michael stated that they aim to make money in two major ways:
“Once we start offering people a better way to manage and earn a return on their money we will charge a management fee for enabling that. As we look to make sure people aren’t getting ripped off on bills, we will get an introductory fee when getting them a better deal.”
They are also going to help users discover any financial product and service they might need at different points in their life.
Cleo: AI-powered chatbot to help you manage your finances
Cleo chatbot is claimed to be your AI friend. It’s free, simple, lightweight, and fast.
At the moment, this financial assistant works only through SMS and Facebook Messenger, but the company announced we’d be able to talk to it through Amazon Alexa and Google Assistant in the future.
To start making calculations about the financial balance you have to link Cleo to your bank account. This expense tracking chatbot lists which bills you have to pay each month and helps to gain better deals with banks.
It also allows viewing the balance, checking direct debits, latest transactions, and seeing spendings per category.
At the moment, Cleo doesn’t work with Banks outside of the UK but plans to expand beyond U.K./Europe to the U.S. and Australia.
Just a few months ago Cleo introduced payments via Facebook Messenger. All you have to do is to type “send money” in the Messenger, pick a Facebook friend you want to send the money to and the defined amount of money will be delivered to him or her automatically.
And yes, there are no fees to pay for either of you.
This is not the only example of successful implementation of the bank-level security chatbots via Facebook Messenger.
Not so long ago, in cooperation with Jasoren, Mastercard launched LeoBot, a payment chatbot for users of the Masterpass digital wallet. It allows making money transfers between Masterpass accounts from the Messenger in just one click.
How does Cleo make money?
The AI-driven algorithm scans your transaction history, calculates and spots interesting spending habits.
The platform performs thorough secure access, in a read-only mode of user’s transaction data. This means Cleo can only view the user’s encrypted transactions.
These procedures are done with the help of SaltEdge financial software.
At the moment, Cleo has significant backing from tier-one investors. They are going to roll out “[their] own faster, fairer and cheaper financial products” soon.
The backside: how do financial chatbots handle security?
To make all transactions safe, all of the mentioned above chatbot financial assistants employ bank-level security.
For instance, Trim uses Plaid API to securely connect to users’ bank accounts (over 15,000 financial institutions).
During registration, users enter their online banking credentials. But they never touch Trim’s servers, nor are they stored in the money management app. Instead, the requested data is sent by Plaid to your bank provider.
The money-saving app gets back an encrypted token, that has read-only access to a user’s transaction data.
- 256-bit SSL encryption (one of the most secure encryption methods) for all server-side databases;
- two-factor authentication;
- read-only access;
- Amazon Web Services (also used by NASA and FINRA);
- and swears not to use or sell user data without permission.
There should also be no worries about Cleo that uses bank-level encryption and security practices.
Considering that Cleo is a read-only service, there is no possibility to move money in or out of the account.
“To access your transaction history, we either connect directly to your bank’s private API or use Yodlee/SaltEdge, world leaders in financial security and data aggregation,” says Cleo.
Cleo doesn’t store your personal data on their servers. Facebook either has no access to your banking info. That’s all managed by the user’s bank and SaltEdge during the sign-up process.
Chip also accesses your bank as read-only. Chip has no data stored in the system, nevertheless, has permission to review your transactions so that it can find out how much you can save.
“Chip is regulated by the Financial Conduct Authority (FCA). The money it saves for you is held in an instant-access account (created during the sign-up process) in your name at Barclays,” mentions the official FAQ page.
When you enter the online banking credentials, be sure they’re secured by bank-level 256-bit encryption.
At Plum, your savings are held as e-Money and administered by MangoPay.
Plum doesn’t store your personal data on their servers. All personal data is hosted in a secured EU-regulated MangoPay data center in Luxembourg.
When a new user signs up, his/her account setup is done in a secure web view (generated by Plum’s servers).
Facebook has no access to the transaction history, or moreover the user’s bank details.
Instead, the bank login is forwarded to Yodlee for further encryption and safe storage. Yodlee is the world leader in account aggregation.
How do financial chatbots implement AI?
All of the expense tracking chatbots mentioned above are using Artificial Intelligence to create the best services for their customers.
But AI chatbots can’t be efficient without being trained continuously by people. They demand human input to function correctly.
Chatbots users are the ones who always train AI and make their algorithm work successfully.
It is You, who supply the relevant data through responses, and non-responses, as well.
The AI behind financial chatbots is simple: your decisions train the algorithms.
A recent report by Gartner states that “artificial intelligence technologies will be virtually pervasive in almost every new software product by 2020.”
The rising interest in AI is not surprising. Its approaches are used for collecting and organizing data and then leveraging the organized data to drive results.
Human-assisted AI makes it easier and faster for companies to understand their customers.
All the processes behind the scenes are tightly interconnected.
Without an integrated team of experts, the artificial intelligent methods can only produce low-level data, which is not precise and actionable enough to drive business goals.
Instead of a summary:
Expense tracking chatbots are extremely promising for banks and other financial businesses.
However, great ideas are worthless if executed poorly. That is why it’s vital to have an experienced company build your chatbots.
If your money-saving chatbot doesn’t respond relevantly to users’ requests or the security is not established on the right level, no one will want to put sensible data at risk, especially when it comes to financing.
Just make sure to consider these concerns before hiring a chatbot development company with deep expertise in this field.
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