The CFPB warns against the use AI chatbots in banks

It’s no secret that ever since the launch of generative AI chatbots like ChatGPT and the subsequent start of the AI revolution, every industry, including banks, has been making efforts to integrate artificial intelligence and save operational costs. However, the Consumer Financial Protection Bureau (CFPB) has recently issued a warning regarding the use of AI chatbots by banks after numerous customer reports highlighted the lack of timely and straightforward responses.

While data from the banking industry indicates high customer satisfaction, the CFPB’s concerns revolve around the fact that these AI chatbots may deliver incorrect financial information or compromise customer privacy and data, thus eroding trust in the financial institution and its services.

“To reduce costs, many financial institutions are integrating artificial intelligence technologies to steer people toward chatbots. A poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law,” said CFPB Director Rohit Chopra.

Bank’s response

In response to the report, Brooke Ybarra, Senior Vice President of the American Bankers Association, expressed her support for responsible innovation that benefits consumers and emphasized that these chatbots are additional tools aimed at expediting the customer experience and complementing traditional channels of interaction.

“There are many ways consumers can communicate with their bank, and recent surveys show the overwhelming majority of customers rate their bank’s customer service highly,” said Ybarra.

Calls for regulation

Although the CFPB’s concerns surrounding the spread of misinformation are legitimate, the popularity of AI chatbots is on the rise, with approximately one in three people in the US interacting with a chatbot in 2022, and this number will only increase as companies look to deploy AIs to save costs.

Therefore, the debate now revolves around companies like Google and Microsoft carefully designing and monitoring these tools to ensure there is no harm. Moreover, even the government is exploring ways to control and regulate AI development.