On June 6, 2023, the CFPB released an issue spotlight that examines the use of chatbots in the banking industry. The spotlight specifically focuses on the use of artificial intelligence (AI) chatbots and the potential risks of violating the regulations when customer needs are not met.
Chatbots are computer programs designed to simulate conversations with human users, typically over messaging platforms. The CFPB’s issue spotlight acknowledges the potential benefits of using AI chatbots in the banking industry, including improving customer engagement and satisfaction, reducing response times, and increasing accessibility for individuals with disabilities. However, the spotlight highlights the potential risks and challenges associated with the use of AI chatbots.
The CFPB found that the use of chatbots raised several risks, including:
Noncompliance with federal consumer financial protection laws. The information chatbots provide may not be accurate, the technology may fail to recognize that a consumer is invoking their federal rights, or it may fail to protect their privacy and data.
Diminished customer service and trust. When talking to a chatbot, consumers can get stuck in a never-ending cycle of unhelpful jargon instead of receiving the help they need . Additionally, they may struggle to obtain the necessary response, including the inability to connect with a human customer service representative.
Harm to consumers. When chatbots provide inaccurate information, it can lead the consumer to select the wrong product or service that they need or it may result to an assessment of fees or other penalties should consumers receive inaccurate information on making payments.
To mitigate these risks, the CFPB encourages banks to carefully evaluate their use of AI chatbots ato ensure their compliance with existing laws and, ideally, to increase the quality of customer experience.
Read the CFPB’s press release here.
The issue spotlight can be found here.