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ARTICLE · 13 JUNE 2023

CFPB Highlights Risks Arising From Chatbot Usage In Banking Industry

Goodwin Procter LLP
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On June 6, 2023, the Consumer Financial Protection Bureau (CFPB) issued a Spotlight on financial institutions' growing use of "chatbots" as a means to provide cost-effective customer service.

United StatesFinance and Banking
Robin L. Muir
Robin L. Muir

On June 6, 2023, the Consumer Financial Protection Bureau (CFPB) issued a Spotlight on financial institutions' growing use of "chatbots" as a means to provide cost-effective customer service.

The use of chatbots in customer service has been gaining popularity among financial institutions in recent years. The ten largest commercial banks in the country have all deployed chatbots to engage with customers. Approximately 37% of the country's population is estimated to have interacted with a bank's chatbot in 2022, alone.

The Spotlight details certain concerns and risks arising from chatbot usage in the banking industry and emphasizes the need for caution and proper implementation. "To reduce costs, many financial institutions are integrating artificial intelligence technologies to steer people toward chatbots," said CFPB Director Rohit Chopra. However, "[a] poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law."

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