When Jeremy Balkin met Pepper at a fintech conference two years ago, it was love at first sight.

“Being Australian, not many people understand me with my funny accent and Pepper understood me,” Balkin said.

Pepper, by the way, is a robot, framed in white plastic, 4 feet tall with a child's voice and big eyes — a sort of polite cousin to Twiki from "Buck Rogers in the 25th Century."

The head of innovation for HSBC felt that the robot, created by SoftBank Robotics Group and powered by machine learning and cloud computing, could help the multinational bank transform its retail banking experience. After seven months of testing the robot with customers, the bank introduced Pepper on Tuesday at its flagship Fifth Avenue branch in Manhattan.

“This is more than just a gimmick for us,” said Pablo Sanchez, head of retail banking and wealth management at HSBC. “It’s a paradigm shift for HSBC in the U.S.”

Pepper, HSBC's humanoid robot, chats up humans in its Midtown branch.
HSBC said robots such as Pepper will transform its retail banking experience. Jonathan Carrera


Pepper won’t be replacing bank tellers at the branch. But the robot will provide information about products and services that the bank offers. It can help customers with a branch's ATMs, the HSBC Mobile Banking app, self-service options and direct customer support.

The robot will help potential customers understand what kinds of special promotions the bank is offering, and when it knows that a bank teller is needed, it will hail one by sending an email to HSBC employees inside the branch.

Like a Walmart greeter, Pepper will wave to people who walk in front of it, up to 10 feet away. Pepper’s build is intended to make the robot less threatening and more endearing to potential customers.

While it has the ability to detect when someone is sad or happy, the robot will not record any more personal identifiable information than an email from a potential customer.

Designed for customer-facing environments like financial services, retail, hospitality, travel, and health care, this is the first time the robot has debuted at a major bank and in any industry in New York City. The robot itself was developed about five years ago, and SoftBank Robotics has more than 25,000 robots similar to Pepper in more than 70 countries.

Unlike its foreign deployments, though, Pepper in HSBC's U.S. bank branches will not take payments or deposits. And even though the robot has been used in other industries and with other banks, there are still barriers to Pepper working seamlessly.

When Pepper isn’t connected to Wi-Fi, the robot loses its ability to access the cloud and provide as much information to customers. Every response is scripted, which helps Pepper make sense, but also limits the robot’s ability to answer questions where a question and answer have not yet been added into its networked brain.

Also, Pepper's face recognition is disabled if the robot has a bright light shining directly in its face.

“But all those things are advancing over time,” said Omar Abdelwahed, head of studio at Softbank Robotics. “For her face, we’ll probably install some shades of some sort.”

The number of robots purchased was not disclosed, but there could be one or two at the branch at any given time. HSBC said each robot is leased for three years at a cost of $25,000, which includes maintenance. The robot deployment is part of HSBC’s $131 million investment in retail called the Retail Transformation Program in the U.S.

Eventually, the bank hopes that with enough development and discussions with regulators the robot will be able to recognize HSBC customers on the street.

“The future of this tech is all about loyalty and rewards,” Abdelwahed said. “It could look you up in a database and realize that this is a big customer or that you bought a mortgage last time and ask, 'How is that mortgage doing? Did you know interest rates are lower now?' ”

In expanding where Pepper is deployed, HSBC will likely stick to coastal cities, eyeing Seattle as it’s next target, Sanchez said. The bank wants to install the robots where potential customers won’t be frightened by them and where millennial customers might engage with the robot.

"We don’t tell our customers what we should call her," Abdelwahed added. (In Japan, he noted, Pepper is considered a male robot.)

For Balkin, Pepper is also a way for HSBC to compete on Fifth Avenue.

“Even Tiffany's is trying to get foot traffic with their ‘Breakfast with Tiffany's,’ ” he said, referring to the jewelry store's cafe launch last year. “Banking hasn’t changed yet, because banking is this last boring industry — we don’t accept that hypothesis.”

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