Eva never sleeps. Since she joined HDFC Bank about a year ago, she has been a super performer, having dealt with six million customers so far - answering their banking queries and helping them pay their bills. Eva (electronic virtual assistant), a chatbot which uses artificial intelligence (AI) and machine learning to process and understand language, was created by Senseforth, a financial technology (fintech) company with which HDFC Bank collaborates.
Eva, with a success rate of around 85 per cent, which has also recently been integrated with both Amazon's Alexa and Google's Assistant, is not alone. Her counterpart at ICICI Bank is iPal - devised by a number of local companies and a global tech player working together - which answers customer queries and enables bill payments, fund transfers and recharges. "Since its launch last year, iPal has interacted with over 7.1 million customers with nearly 90 per cent accuracy," says B. Madhivanan, Chief Technology and Digital Officer, ICICI Bank. "It is the only chatbot in the country which enables financial transactions on mobile as well as on our website."
So too, YES Bank has Yes Robot, created by the fintech firm Gupshup, which does not speak but can chat with customers on Facebook Messenger, answering queries relating to account balance and recent transactions, as well as carry-out tasks such as transferring funds, recharging phones and paying bills. HDFC Bank also has another chatbot-enabled facility called HDFC Bank Onchat, conceived in a tie-up with Bangalore-based AI company Niki, which allows customers to book movie tickets and cabs through Facebook Messenger.
But chatbots are only one of a range of innovations fintech companies have brought to banking, thereby reducing their human interface, bringing down operating expenses and improving efficiency. Bank of Baroda, for example, has partnered with fintech firm CreditMantri to launch a credit product that evaluates a loan applicant's creditworthiness, using unconventional data and yardsticks, thereby enabling better credit-risk decisions. CreditMantri claims to have assisted in five million such decisions.
ICICI Bank, YES Bank and Bank of Baroda all use the services of ToneTag, which has created databases of encrypted sound waves for them, allowing customers to make payments without touching a button. ToneTag, which has 26 partners, maintains it has a base of 300,000 merchants and has reached 50 million customers. "While the banks drive customer demand, the fintech sector offers innovation and disruption through technology," says Naresh Makhijani, Partner and Head, Financial Services, KPMG India. "By partnering with them, banks gain access to new market segments, create new offerings for existing customers, churn customer data and deepen their customer engagement."
HDFC Bank has also a humanoid at three select branches in Mumbai, Kochi and Bengaluru, called Ira (Interactive Robotic Assistant), which - equipped with AI and machine learning - helps the front- office deal with visiting customers. The second Humanoid, based on AI and ML, was launched in Bengaluru recently. "We were one of the early adopters of technology among banks," says Nitin Chugh, Country Head - Digital Banking, HDFC Bank. "Today we are consolidating our digital leadership through collaboration with companies that give us the best solutions and applications."
So strong is the trend that banks are even handholding fintech start-ups, whose services they then utilise. FinoPayTech - which provides digital solutions to acquire new customers, biometric products to store and verify transactions, and more - was incubated by ICICI Bank. YES Bank has an accelerator programme called Yes Fintech through which it has supported 1,000 fintech start-ups. It has institutionalised what it calls 'ART' - alliances, relationships and technology - to explore partnerships and co-create solutions with fintech companies. "Currently, we are working with 20 fintechs to co-create solutions pertaining to data analytics, predictive models, chatbots, biometric user authentication techniques and more," says Ritesh Pai, Chief Digital Officer, YES Bank. "We realise the possibilities on this front. While machine learning and data analytics find their most common uses in the cross-sale of financial products, we are also investing in innovations which can lead to a more secure transacting experience for our users."
HDFC Bank has its 'Industry Academia' initiative, which allies with engineering and management schools to promote fintech start-ups, as well as an annual Digital Innovation Summit where start-ups make their presentations and the bank selects and backs the five best ones. "We work together, partake of each other's learnings and this collaboration results in the creation of many differentiated and superior solutions," says Chugh of HDFC Bank. "It enables us to remain agile in a fast-paced environment, while the fintechs get access to our systems, knowledge and customer base."
Brave New Future
Fintech is even moving beyond transactions to help bank customers in their financial planning. Bank of Baroda and Lakshmi Vilas Bank have partnered with Fisdom, a Bengaluru-based fintech company, to offer financial planning and wealth management services. Axis Bank has teamed up with US-based fitness technology company GOQii to use the latter's fitness band - which measures steps taken, calories expended, etc - for making payments as well, using the internet of things (IoT) and near-field communication (NFC).
But perhaps the most ambitious in this respect is ICICI Bank. It is working to introduce IoT and machine learning in a big way in HR matters - answering employee queries, identifying vacancies in departments and prioritising transfer requests. It even aims to monitor employees' staff canteen purchases and thereby track their health!
In September 2016, the bank also announced the deployment of software robotics in over 200 business processes, including agribusiness, trade, and foreign exchange, apart from retail banking and HR. These robots perform around two million transactions every day, which include data entry and validation, automated formatting, reconciliation, and currency exchange rate processing, among others. "We are the first in the country and among a few banks in the world to use software robotics, which emulates human actions and thereby automates all high volume tasks that are repetitive and time-consuming, cutting across multiple applications," says Madhivanan. The investment has enabled ICICI Bank to reduce response time by 60 per cent and increase accuracy to 100 per cent, while employees focus on more value-added functions.
Chatbots currently understand and respond only in English, but with smartphones and Internet connections spreading to the hinterland, many fintech companies are working on solutions that will be able to comprehend regional languages as well as the Hindi-English combination that is customary speech in many parts of the country. "Yes Robot has been very well received and we are now exploring fintechs which can support us in developing conversations in local languages," says Pai of YES Bank.
The possibilities with IoT are numerous and banks and fintech companies are busy exploring them. "We have identified opportunities for developing systems to automate payments related to movement of goods with banking systems," says Pai of YES Bank. "We already have an application programme interface (API) for corporate clients to automate payments, and in coming days hope to leverage the existing APIs for working capital loans and supply chain financing payments as well."