Citi joins chatbot arms race, unveils Facebook messenger tie-up that will launch later this year
Hongkongers will soon be able to check their bank account balance and recent transactions via Facebook Messenger, as the US banking giant Citi plans to launch its smart chatbot in the city by the end of 2018, according to its head of digital banking Priscilla Ng.
Several other local banks have already launched their own app-based chatbots for customer enquiries this year, such as HSBC’s Amy and Hang Seng Bank’s virtual assistants HARO and DORI, in an attempt to slash costs and reduce the need for live call centres and branch visits from customers.
But Citi’s offering will be the first Facebook Messenger-embedded chatbot to let customers access their own financial records and potentially conduct transactions in future. It plans to roll out the service worldwide following its launch in Singapore in March.
“I would say Facebook is the No 1 priority for us, since it has around five million users in Hong Kong, around half of which are very active. So it’s a digital hotspot for people, very much like shopping malls,” Ng told the South China Morning Post in an exclusive interview.
Chatbots are machines which use AI-based technologies such as natural language processing to answer queries from customers. They could potentially help save global banks more than US$8 billion per year by 2022, according to a report by Juniper Research.
The smart chatbot was developed as part of the bank’s ambitious global push into developing digital services for customers in the face of looming competition from virtual banks and innovative fintech start-ups. Citigroup spent more than US$8 billion on technology last year, which is around 20 per cent of the bank’s operating expenses, its chief executive Michael Corbat revealed in May.
Key to the bank’s internal digital transformation has been the use of Open API technology, which enables third-party developers to create fintech apps and services using bank data.
In May, Citi launched six Open API partnerships with Hong Kong consumer brands including HKTVmall, Visa, AIA Hong Kong and Octopus to speed up customers’ online shopping and banking transactions using methods that include pre-filled personal information.
In addition, Citi has “several more partnerships in the pipeline” which it plans to reveal in the next month or two, according to Ng. These include endeavours in consumer retail, travel and entertainment.
“Open API will give us a competitive edge since other banks have not developed it as fast as us, and it’s a new concept targeted at millennials who want to do things more freely,” said Ng.
Ng also believes that 2019 is when mobile payments will really take off in Hong Kong, helped by the HKMA’s push to standardise QR payment codes across platforms and vendors, as well as the launch of faster payments systems in September.
Hong Kong’s cashless payment market is currently dominated by Octopus, which launched two decades ago. In a sign of the changing times, around 3,000 Hong Kong taxi drivers now accept payments through Alipay or WeChat Pay. Meanwhile, Octopus launched its own e-payment system for taxis in April.
“Because Octopus is so convenient and widely adopted, and there are ATMs everywhere in Hong Kong, people have no urgency to take up mobile payments,” said Ng. “I believe QR will be one of the most popular payment methods in Hong Kong when it is standardised.”
The city’s de facto bank, the HKMA, has launched seven “smart banking” initiatives which include faster payments, promoting Open API technology, and revamping its fintech supervisory sandbox – a way for banks and start-ups to accelerate the testing and development of pilot services before public launch.
In the 2018 budget, the government earmarked HK$50 billion towards developing technology and innovation, including fintech, over the next five years.
“This year, we hope the banking industry as a whole will further promote the development of fintech in line with the Hong Kong government’s smart city plan,” said Angel Ng, Citi’s head of Hong Kong and Macau, referring to the government’s long-term drive to spur technology and innovation in the city.