Business of Fintech
Beyond chatbots, banks are now investing in ‘brains’ behind them
- Kasisto, a company that's behind a conversational AI platform for banking, just confirmed a Series B investment of $17 million
- The investment in Kasisto's AI platform is symptomatic of how discussion around customer communications has evolved beyond chatbots to what underlies them

The customer experience in banking is about to get a lot more personal, as shown by an investment announced Wednesday in technology that will act as the "brain" behind AI financial services applications. Kasisto -- a company that's behind a conversational AI platform about around a dozen financial institutions globally use -- just completed a $17 million Series B funding round.
It's yet another sign that customers' future interactions with their banks are more likely to be with non-humans.
"It not only helps the bank become more informed of their end consumer, it serves the individual better, and in so doing reduces their cost structure and potentially generates additional revenue," said Patricia Kemp, co-founder and general partner of Oak HC/FT, the venture capital firm that led the funding round. "It's strategically important for banks to improve their mobile experiences and improve their online experiences."
Propel Venture Partners, Commerce Ventures, Mastercard and the Partnership Fund for New York City also participated in the round.
For many people, conversational AI is synonymous with chatbots, but Kasisto emphasized that its platform, KAI, is the thinking behind the chatbot or Alexa skill that some banks are rolling out.
"KAI is not custom built -- it's an open platform that banks can build off of and provides APIs where banks can build their customized experience," said Kasisto co-founder Zor Gorelov. "It's an omnichannel product -- you can have different conversations with KAI on Alexa or Facebook Messenger; it knows when you're logged into your mobile banking app."
KAI effectively functions as a "banking brain" that can have contextual conversations with customers based on what it knows about the customers, harnessing customer data to create a more personalized conversation with the customer. Mastercard is developing a banking bot using KAI technology and the U.K.'s Standard Chartered Bank recently said its bot will use KAI. TD Bank is also using Kasisto's technology.
What's at play here is a way to add more value to the bank-customer interaction beyond just simple commands, said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy and Research.
"What banks are good at doing is finding ways to reach a customer -- they've got multiple ways to do so, but we don't have anything to talk about when we start the conversations, they're conversations that customers don't care about like 'you have a statement available,'" he said.
What banks are aiming towards is a way to proactively get to customers' needs through data mining, which AI-powered platforms like KAI are able to do, he added.
The investment in the "banking brain" is symptomatic of a shift in thinking about how to reach a consumer, said Celent analyst Stephen Greer. While a year ago the emphasis was on chatbots, immature technology led to some missteps with them. Now, that thinking is shifting to technology that can be applied to a variety of channels.
"There was a crescendo of interest and news about chatbots about a year ago -- it was the the hot new thing," said Greer. "The market is moving away from 'let's talk about creating a chatbot' towards what underlies the chatbot -- the AI and the analytics."
Kasisto isn't the only player in the space, with other companies like Personetics and IPSoft also working with banks on conversational AI platforms. Schwanhausser said the market has room for many players, given that the technology is still very much in an early phase of development. To Personetics, the Kasisto investment is seen as a positive, since it's another means for AI to be used by banks in their quest to offer more options to service their customers.
"It's part of a bigger picture of expanding the types of choices that the customers will have on how to interact with their bank," said chief marketing officer Eran Livneh.