Chatbot compliance is another important factor to keep in mind when developing a chatbot. In finance, nations regularly update financial regulatory requirements. This means that processes and systems also need to continually improve and adapt. 

So if a financial institution wants to incorporate a chatbot, they need to know that it’ll be designed and implemented to be in line with the regulations and rules they must follow. In Canada, these include IIROC and the Canadian Securities Institute. 

  • IIROC: IIROC governs the activities of investment firms and builds the regulatory framework. 
  • Canadian Securities Institute (CSI): The Canadian Securities Institute has been setting the standard since 1970 for excellence in life-long education for financial professionals. It is part of Moody’s Analytics Learning Solutions, which offers credentials and educational programs.
Chatbot Compliance

Benefits of Chatbots in the Banking and Financial Industry

In the banking and financial industry, here are just a few of the benefits to using a chatbot:

  • Support that is available 24/7
  • Easy to use for customers
  • Customer satisfaction is easy to measure
  • Marketing experience can be personalized
  • Shows how progressive the banking industry can be
  • Presents cost savings to companies 

While there are clear benefits to using a chatbot, from marketing to customer service and even internally for employees, there are also important regulatory compliance concerns. This article will examine the process of integrating a chatbot that is compliant with financial regulatory bodies. 

The chatbot market size is projected to grow from $2.6 billion in 2019 to $9.4 billion by 2024.

Chatbot Compliance

5 Legal Considerations for Financial Chatbots

  1. Disclaimers for Regulated Activities 

If a company is giving a chatbot the authority to give advice, the company and developers will need to ensure that the chatbot has access to current information. 

  1. Terms and Conditions 

If chatbots are being used to facilitate online transactions or give any type of advice, users should be aware that the help being doled out is from a chatbot, not a live human being.

  1. Protection of Data 

Since chatbots collect personal data, the data protection policy is essential to keep in mind, not just in the development phase. It should be regularly monitored.

  1. Infringement of the Rights of a Third Party 

Appropriate safeguards must be put in place to prevent copyright infringements since chatbots can use third party trademarks (accidentally) and can easily infringe on rights.

  1. Prevention of Chatbot Errors 

A chatbot has an impact on a company’s brand and image. It is important to be careful about potential detrimenta or incorrect responses that a chatbot may give. Close monitoring of the chatbot and the technology is essential.

Chatbot Compliance Case Study

Chatbot Compliance

Investment Company ABC 

(Please note the company name has been altered to ensure confidentiality.) 

This company operates as an investment firm in Canada and specializes in managing wealth for individuals.

The Problem: 

Investment Company ABC was very interested in developing and using a chatbot to increase customer satisfaction. Sometimes it can take a long time for customers to get questions answered about their accounts, and a chatbot that could deliver personalized information about current investments seemed like a great way to communicate faster. However, the main question was how to ensure that it was compliant.

The Process: 

The company felt it was important to work with a team that could understand their vision and help them meet their goals. They needed a chatbot that sounded human-like and one that would help to increase customer satisfaction. 

It was also essential to build a chatbot with compliance front of mind, due to the industry they operate within. In order to make sure that all the boxes were checked, regulations were followed and due diligence was performed, a chatbot consultant was the perfect gateway to line up requirements (compliance, level of customization, etc.) with the right developers. The company was committed to ensuring compliance, but knowing that the chatbot consultant would also be doing the same was extra reassurance.

The Solution: 

After meeting with the company, determining the use case and collaborating on the KPIs for success, the chatbot consultant facilitated the development of a friendly and positive chatbot using conversational AI technology. It provided key investment portfolio data and answered simple questions. The focus was to solve simple customer issues, all while ensuring compliance, including disclaimers, terms and conditions and a rigorous review process of the software. The bot continues to meet regulatory requirements and is improving its interactions with clients each and every day, as measured by the customers’ survey responses.

If you want to avoid chatbot compliance issues, reach out. One of our highly trained Chatbot Consultants can answer all of your questions today!