As chat platforms have eclipsed the size of the largest social networks, businesses are increasingly using them to service their customers. Some financial institutions are even enabled for customers to transact over chat.
Pieter de Villiers, co-founder and CEO of Clickatell, joins me on the podcast to talk about his vision 20 years ago for mobile experiences. Now the firm covers more than 220 territories, 1000 networks, and 85% of the world’s population, with an SMS reach of more than 5 billion users.
Pieter and I talk about banks embracing chat apps, like WhatsApp, to reach their customers. With chat banking, customers can get digital banking customer support, account management, and bill payment services from within chat.
Looking ahead 20 years at messaging
It's a quite a story. When we founded the company, we had a very simple objective. And that was how do we connect the fastest growing e-commerce platform in the world, which was the internet at the time, with the fastest growing communications platform in the world, the mobile phone?
It's actually quite ironic to think that back in 2000, those two worlds had not collided, and they could not interoperate. So, in November 2000, we launched four lines of code that enabled any website to send a mobile text message, and that really became the first SMS API interval.
Servicing financial services
We were not focused on financial services at the time, just really about how to bring the commerce universe to communications. We've always been interacting in the convergent space between those, and financial services happen to be the early adopters, early movers.
We launched the first transaction alert on SMS in the world for First National Bank circa 2002. And we also did some of the first one time pins in the world for WhatsApp. Certainly, financial services and authentication became use cases that the early adopters went with, and we serve them in that case.
Different eras of chat
In late 1997, you had what we call the internet economy that brought about with it e-commerce and internet banking. Again, the banking and financial services sector were early adopters. And you had almost every bank out there with a fairly large audience doing internet banking within a couple of years.
10 years later, you had another major shift in the marketplace, where smartphones and iPhones launched. Marketplaces, like app stores, also launched. And it ushered in what we call the app economy, then app banking, and commerce.
And 10 years after that, circa 2017, you have the four largest chat platforms in the world eclipsing the active user base of the four largest social media platforms. And so for us, that became that year of what we call the chat economy. In 2018, we first launched chat banking for Absa Bank on the largest chat platform in the world. We are in the early innings. We're in a very exciting space called chat commerce.
Use cases in banking
In many markets, the driving force for technology adoption is different. And certainly in markets like South Africa or emerging markets, there's a big delta between smartphone penetration and devices and data plan access and cost versus what banks' desires are in terms of serving their clients on a digital channel.
For them, it's a very logical economic decision, which is, I can grow my 18% to 22% mobile banking app penetration to 71%, which is the chat platform penetration, by simply leveraging my existing assets. Part of what we do for these banks is take existing check banking or mobile banking infrastructure and back end processes, and extended them over onto the chat channels. We help them reach more customers on these digital channels more conveniently.
Our engagements start off typically in customer service. We don't believe any brand wants to put the customer on hold, but they are stuck in an analog voice call center world where scaling those environments is difficult. It starts off with customer service. You know, what's my balance? Where can I find an ATM? Can you confirm the last transaction? Then eventually, it moves over to payment type experiences. And so we do double digit in the millions of payment transactions for several banks -- payment on things like telecoms and billing use cases.
Unfortunately, a lot of banks in the US, Canada and elsewhere have experimented with chat bots. Unleashing a chatbot on a customer is not improving customer experiences. There's been a bit of a pullback as a result, and I think one needs to be quite mindful of what the customer journey you're creating is and whether it is indeed better and living up to expectations.
Most of the time when you and I engage with a brand, we don't only want to start a transaction, we also want to complete a transaction, so it then breaks out to an agent desk at any point in time if you get stuck with automation journeys. And that's a very important piece: you can't forsake your customer with an automation and hope that they navigate. You have to give them a fallback on an agent desk. And then you can use those same technologies to support the agent itself to get to the answer and the resolution faster.
The initial chatbot deployments were driven by AI hype, and really were quite disappointing in expectation. You can achieve a lot with simple customer journeys. For example, simply knowing who you are when you reach out to the bank, not having to spell your name and figure out your address details and things like that all day are very simple wins that one can achieve and customers love these experiences when they're done right.
Automation versus human interaction
There's the usual suspects use cases: if you go through most of the call center data sets and reports, you'll find that it's the typical 80/20 scenario where consumers want to do the same thing over and over and it's not difficult to help by automating FAQ's. That should be the first port of call. And we typically would start with menu driven resolutions, because it's not that foreign to a customer, and they can navigate through it, and it feels a little bit more tactile. But then we should quickly go into keywords or full AI.
In terms of the more unique cases, Absa, a bank in South Africa, was the first to launch on the watch app channel. And in that experience, you can say, pay Zack $30. And we'll come back with a single message that says confirming paying Zack, account number ending XYZ. It's $30 -- yes or no? And that's it, you're done.
In the U.S., doing a wire transfer or even Zelle payment takes a whole lot more effort and steps than that. And I think a lot of the heavy lifting happens behind the scenes around authentication and validating the aliases and everything to make sure that fraud doesn't hijack the transaction or diminish the experience.
Learning from Asia
I think it's important to know that chat commerce is in its first innings, right? It's early days, a lot of the technology sets that we provide, and our competitors provide, really were not available with the right level of confidence, even 18 months ago. But we are at a point now where the use cases for the US will center around convenience. Whether it's Comcast or AT&T, your customer experience with those brands is less than optimal. We believe that there's a massive opportunity for chat and chat commerce to do better when it comes to consumers engaging with a large brand.
But you're right that chat commerce is a driving forces in China, even India with Paytm, and perhaps Kenya's M-pesa. But at the same time, consumers have got used to Uber-like and Airbnb-like experiences.
20 year journey
It's been a 20 year to get to the perfect storm we have today. One of our board members commented that if you're patient enough, and you can sustain and survive, sometimes the timing will eventually work for you.
Where to next? We believe that the momentum that we're seeing for large consumer brands, in particular in the financial services sector, is, quite frankly, the wave that we want to continue to ride. We feel we have an unfair advantage in that space. Right now, there's a lot of communication platforms as service players who can do the communication chat side. But we are really uniquely positioned as having more traction with both the communication and the commerce side than any one of our competitors right now.