Meet Erica, Your New Robot Banker

We recently launched a new branch design in Beijing for CZ Bank, which included a cute and entertaining robot with was cartoon-like features and a child-like voice. The purpose of the robot was to serve as a secondary greeter when the branch was extremely busy, and although it functioned as planned, its role was more to surprise and delight than to actually solve the most typical banking friction point: being recognized and put into the service queue. Ultimately the robot was introduced to reinforce the CZ Bank’s innovative position in the Chinese banking industry. The question many bankers and retailers are asking is, will robots or androids truly address one of the key challenges in providing services, namely the high cost of branch staffing?

It’s a reasonable question to ask, as many retailers are leveraging insights from the auto industry, where the use of robots has reduced the time and cost of assembly line production. Most recently, Lowe’s introduced LowBot to support front-line associates, manage inventory, and address the common challenge of getting the customer to the right aisle and product. LowBot brings exceptional value to the customer relationship, since it solves a significant friction point found in big box retailers: finding the right product during busy periods. The robot does not need to be life-like, but does need to be intuitive enough to understand the request and answer the need. We will see more of these robots in big box retailers, and their use as directional and inventory management tools will only grow.

For banking, the challenge is quite different since people come to branches to meet with humans, not robots. Financial institutions, in order to reduce transaction costs, have been automating the management of most traditional transactions through technology. You could argue the ATM and its permutations are the initial stages of the introduction of robots to the branch. Banking customers have grown accustomed to interacting with technology to accomplish our most basic banking needs.

We believe the embrace of ATM technology has allowed airlines to automate airport check-ins through the use of kiosks. Airlines and transportation in general will be one of the industries most impacted by robot technology, with the growth of self-driving vehicles and the repetitive nature of checking-in at an airline counter. A recent McKinsey study found that goods producing industries, (63%), accommodation and food services, (75%), and technology, media and telecom, (51%), will be the most dramatically impacted, while finance and insurance stand at a low 37%.

But if robots were life-like, would consumers feel more comfortable engaging with them as an alternative to people? Meet Erica, the android invention of Professor Hiroshi Ishiguro, professor at the Osaka University in Japan. Ishiguro has been on a quest for the past fifteen years to create androids that look, talk and walk to mimic the very nuances of being human. His latest creation, Erica, has achieved many of the subtle characteristics found in human behaviour, and with improved voice recognition technology, she has the ability to conduct conversations with real people. However, for all of her life-like characteristics Ishiguro identifies two main deficiencies in his android which inhibit its ability to replace humans: the ability to create intention and desire are two of the most important factors driving emotions, and are the biggest hurdles in creating androids that behave and feel like humans.

I doubt robots will ever replace bankers, due to their fundamental lack of empathy. People have a strong sense of belonging, which we covered in my book Belonging Experiences more than a decade ago, supporting the fact that humans crave relationships with other people. Empathy and the need to belong to certain group of people, in addition to our need for pleasure, are emotional factors androids cannot provide. Although AI and IoT will enhance and impact the effectiveness of androids in our lives, when it comes to customers’ financial well-being and security, there is a significant challenge in having robots answer this very important need. In addition, robots and androids do not solve an important friction point of recognition, as kiosks have been widely used and are effective in addressing this customer need. We believe will never resolve one of the most critical needs in banking: getting sound financial advice delivered through human story-telling and personal experience.

There is also a growing concern as it relates to the great “singularity,” first coined by John von Neuman, which he predicts is an upcoming era when the advances in technology would create superintelligence that would far surpass human intelligence, putting in question the future of mankind. These views polarize the scientific community, as many believe the advance in intelligent machines will only improve the lives of mankind. Irrespective of which side of the debate you believe in, the fact remains until androids can demonstrate the key emotional characteristics of mankind, front-line bank staff’s role and purpose will remain safe for the foreseeable future.