The research group that invented Siri, the virtual assistant built into Apple’s iPhone, has built her a smarter relative that could help banks cut staffing costs. Known as Lola, the new assistant can carry on more complex conversations than Siri and help with tasks that involve multiple back-and-forth steps with customers, such as opening a bank account.
Lola is going to be tested as a feature in the website of BBVA Compass, the U.S. subsidiary of Banco Bilbao Vizcaya Argentaria, the second-largest bank in Spain. The assistant appears as a small chat window at the side of the site. Users can type questions to Lola or speak to her via their computer’s microphone.
When asked “What’s the next payment on my loan?” Lola types or speaks back, and she can handle unexpected statements that have meaning only in context, such as “Sorry, meant my mortgage.”
BBVA is introducing this technology in response to a dilemma. Much of a bank’s costs are tied up in answering customers’ questions—in BBVA’s case, it’s about 65 percent of the time spent by branch staffers. But trying to lighten the load with automated services like telephone menus can backfire. BBVA’s own research has found that people judge a bank mostly by its customer service.
How can customer service costs be slashed without annoying customers? Beatriz Lara, director of innovation at BBVA, says a global review found that customers responded best to interactions that in their view had a “human” touch, whether they took place online, in a branch, over the phone, or at an ATM. “It provides reassurance and encourages trust,” she says.
To create Lola, BBVA commissioned SRI International, the nonprofit research institute in Menlo Park, California, whose Information and Computing Sciences division also produced the first prototype of Siri (the project later became an independent company and was acquired by Apple). SRI researchers have continued to work on virtual assistants, focusing on how to make them better by drawing on deeper stocks of knowledge about a particular area.
“We see this as the next generation of personal assistant—we think of Siri as the first generation,” says William Mark of SRI, who worked on Lola and the underlying technology.
Virtual assistants are software algorithms that parse a user’s question and then craft an answer by plugging relevant data (say, information in a bank account) into a set of ready-made replies. Mark says they can be more useful, and act more intelligently, if they focus on knowledge in a limited domain—in Lola’s case, banking. “I think we can develop a much more satisfying experience because of that,” he says.
BBVA’s automated assistant, expected to enter beta testing this year, is named after the bank’s top-rated customer service agent, who inspired the way the virtual Lola phrases responses and questions. “The next step for Lola is commercial service in the U.S., and then maybe Spain—and you will one day see Lola on the Internet, and in ATMs, and on mobile,” says Lara.
The Lola project is part of an initiative launched by BBVA in 2010 to use technology to squeeze more profits out of its business, particularly its customer service operations. The bank studied other industries, like airlines, which it found could double the number of check-ins per employee by having customers use automated kiosks.
If widely deployed, Lola could save money by eliminating jobs. BBVA won’t disclose details of its customer service costs, but Lara says that she expects the virtual assistant to be able to field many types of queries now handled by tellers in retail locations or over the phone. Booz&co estimates that a typical bank customer service call costs $4, compared with 10 cents for an online interaction.
Daniel Hong, who tracks customer service strategies and technology for the analyst firm Ovum, hasn’t interacted with Lola but is skeptical that the software will live up to BBVA’s expectations. He says many companies in the U.S. and other rich nations are actually retreating from efforts to lower costs with outsourced or automated call centers. Good customer service, it turns out, keeps clients loyal, and they can end up spending more.
Hong predicts that technology like Lola will be most useful for businesses interested in expanding into emerging markets. “In the emerging economies, businesses are more in customer acquisition mode, and that’s where automated systems are most valuable,” he says.
Lara of BBVA agrees that Lola could be useful in that context. She hopes such automated tellers could help the bank profitably serve millions of potential customers in the developing world, who are currently without financial services but would be costly to support using conventional means.