Customer Protection Agency Raises Alarm Over Inadequate Responses from Banks' Generative AI Chatbots

John Lopez, Tech Times 10 June 2023, 09:06 am

The Consumer Financial Protection Bureau (CFPB), a US agency overseeing financial institutions' relationships with customers, has recently warned about banks' use of generative AI chatbots.

CNET reports that the agency cited numerous complaints from customers who have experienced difficulties receiving timely and straightforward answers to their questions.

More Banks Integrating AI

The use of chatbots in the banking industry continues to rise steadily, with more banks incorporating them into their services. According to Cornerstone Advisors, as of early 2020, 13% of banks already had chatbots; with the release of popular large language models like ChatGPT, this number could be way north today.

Meanwhile, EY predicts that by 2030, chatbots will become so integrated into the banking process that customers won't be able to distinguish between human and bot interactions.

Some notable examples of AI-driven virtual assistants in the banking sector include Bank of America's Erica, USAA's Eva, a chatbot handling simple banking tasks, and US Bank's Smart Assistant, one of the first Spanish language assistants in the US.

Potential Risks With AI Chatbots

In a press release, the agency emphasized that resolving customer problems and providing accurate information are fundamental responsibilities of financial institutions, forming the basis of relationship banking.

The CFPB expressed concerns about potential risks associated with AI chatbots, including disseminating inaccurate financial information and infringement on customers' privacy and data.

Furthermore, the agency pointed out that a lack of trust in the financial institution and its services could arise, especially if chatbots complicate connecting customers with human customer service representatives.

Specifically mentioned were Capital One's Eno and Bank of America's Erica, both of which employ generative AI technology trained with customer conversations and chat logs. At the time of writing, neither bank has responded to requests for comment.

AI Tools in Banking

According to the CFPB, approximately one in three individuals in the United States interacted with a chatbot in 2022, a number expected to rise as more companies integrate AI into their operations.

CFPB Director Rohit Chopra highlighted the importance of deploying chatbots effectively, as a poorly executed implementation could lead to customer frustration, reduced trust, and potential legal violations.

While financial institutions are not the sole adopters of AI tools, the market has seen a surge of new services and features powered by generative AI following OpenAI's ChatGPT.

Further Investigation

The CFPB assured that it closely monitors the AI chatbot market and encourages customers to report complaints regarding banking chatbots through their website or by phone.

They can reach the CFPB at (855) 411-CFPB (2372). The agency ensures financial institutions comply with consumer financial protection laws and deliver high-quality customer care.

In light of these developments, consumers are advised to explore ways to earn higher interest on their money and consider opening bank accounts online.

The CFPB's warning underscores the importance of vigilance and informed decision-making when engaging with financial institutions and their AI chatbot services.

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