BankSouth and Westpac Banking Corporation have invested in a $15.5 million Series C funding round extension for New York-based Kasisto, which developed a virtual assistant they both use. The extension was led by FIS and Westpac and it follows the original $15.5 million Series C round Kasisto announced in July, which was co-led by Naples Technology Vendors and NCR Corporation. The extension brings total funding for the Series C to $31 million.
The banks' investment in Kasisto reflects a growing trend in which financial institutions are putting more money and effort into virtual assistants and they're reaping returns on the technology, in the forms of lower call volumes in their call centers and higher deposits.
Banks and brokerage houses now represent more than a third of all deployments of intelligent assistants, according to Dan Miller, lead analyst and founder of Opus Research. In a recent study, his firm found that banking and financial services companies implemented 33.7% of enterprise virtual assistants. The next biggest user of the technology is the telecom industry, which has deployed just under 11% of virtual assistants.
At the same time, the technology and usefulness of these assistants are improving. Where in the early days of chatbots, odd answers and errors turned customers off, the current generation has higher success rates, sometimes measured as containment rates — in other words, customers aren't backing out and looking for a human to talk to.
"Bank of America's Erica, U.S. Bank's Smart Assistant, Capital One's Eno and a number of initiatives at brokerage houses like Charles Schwab and Fidelity are evolving into conversational search assistants whose capabilities match customer expectations," Miller said. "They help find the bank's routing number or home in on specific payments or credit scores.
"They are proving to be very efficient at answering a steadily growing set of questions and, yes, they are successfully completing tasks without requiring the help of a contact center agent," Miller said.
This is Kasisto's best year ever in terms of adoption, usage and growth, said Zor Gorelov, co-founder and CEO. The company was founded in 2013 and its software originally came out of SRI International, which created Apple's Siri.
"As the technology matures, we have built a platform that now makes it possible for a $1.2 billion-asset bank to have a digital assistant that is as powerful as Bank of America's," he said.
Adoption is being driven partly by the increased use of digital banking and the need to help customers navigate and use the tools, he said.
Westpac in Australia has been using Kasisto's technology to
BankSouth invested in Kasisto to improve customer experience, to build and retain existing customer relationships and to improve acquisition of new prospects, according Neil Hediger, vice president of marketing and digital banking at BankSouth.
The Greensboro, Georgia bank, which has $1.2 billion of assets, also recently invested in a digital banking platform from NCR.
Last October, Hediger's team began working with Kasisto to develop a virtual assistant. One goal was to make digital banking less intimidating to older customers.
"Our demographic is chiefly over the age of 50, and we believe that they, in many cases, are technology averse," Hediger said. "They may all have smartphones, but I'm not quite sure they know everything that's available on them."
Hediger also wanted to use conversational AI to personalize and customize messages based on customer behavior.
"We wrestled a bit with doing that with a bot," Hediger said. "I don't even like the term 'bot' personally, because it connects with the idea of an inanimate, impersonal robot. We wanted our bot to be personal, to be familiar, to be friendly and approachable."
His team hosted a contest to name the bot. The name "Rita" won. It's an acronym for real time, intelligent teller assistant. (They wanted to go with "digital assistant," but wanted a standard name rather than "Rida.")
A creative team at the bank came up with a look for Rita: a thirty-something woman with short hair wearing glasses, a pantsuit and high heels.
The bank gave her a personality that Hediger describes as "a little more sassy if you will, a little more confident and capable and approachable."
"We didn't want just that rote bot kind of response that we always find is somewhat of a barrier," Hediger said.
The bank wanted Rita to take care of customer queries that would otherwise go to the bank's call center. The top three questions for call center reps are, "What is my balance?" "What were my last three transactions?" and "When was my last bill paid?"
"All of that can be handled by Rita, and with a little bit of spunk," Hediger said.
For instance, the bot will tell customers, "I might be able to answer that question if only I had my humans give me enough information."
In many cases, Rita answers a question with a clarifying question. For instance, if a customer writes, "I want to know information about my last bill?" Rita will answer, "Can you tell me which account you would like me to inquire about?''
Rita also acts as a digital guide when a new customer is opening an account online or on the bank's app, explaining when the person might need to provide a driver's license or Social Security number, for instance.
"She's there, right at the very beginning of the whole digital account opening and introduction process," Hediger said. "And we hope that customers will turn to her for answers to questions at 10:00 p.m. on a Friday night, when our customer care center is closed."
It took four weeks to implement Rita, including the crafting of responses for her.
The Australian bank has co-developed a portal to all the knowledge trapped inside multiple virtual assistants throughout the company.
Today, there are life-size cutouts of Rita in every branch and in every department, even in the accounting department, where she has been given necklaces.
"The employee body has completely come alongside her," Hediger said. "We introduce her as BankSouth's newest employee."
In the past six months, BankSouth has seen a nearly 30% reduction in call volume to the call center, which Hediger chalks up to Rita's work. The bank has also gained $1 million worth of new deposits since the beginning of February, and Hediger gives some of the credit for that to Rita.
Rita so far has a 96% containment rate, which means the majority of queries from customers to Rita are handled completely by the bot.
In the future, the bot may be used to guide customers through the process of applying for pre-approved lines of credit and pre-approved loan applications. Rita will also help when the bank begins offering bitcoin trading and new payment offerings.
"Rita is going to be the guide to be able to invite people to become more digitally oriented regardless of their demographic or their awareness of technology," Hediger said.
Hediger gives Kasisto props for being easy to work with and willing to accommodate changes to the technology.
"I think anytime we're able to partner with a company that has a common vision of using technology to improve the customer experience, we have a win-win," he said. "I'm very pleased with the vision that Kasisto has. I think they are going to be a mainstay in our evolution as a digital bank."
Kasisto plans to use the $31 million to continue to invest in technology partnerships and research and development to make its assistants smarter, Gorelov said.
"We now have assistants in consumer banking, business banking and investment management," he said. "We believe it's the future. Today, we do a very effective job in helping banks manage inquiries. With this investment, we would like to start looking at more complex use cases in wealth management advice. The company's vision is to help people make better financial decisions, and I think we're just at the beginning of this journey."
