3 minute read | June.08.2023
The Consumer Financial Protection Bureau (CFPB) warned financial institutions this week about the risks of using AI-powered chatbots to communicate with consumers. The Bureau advised financial institutions to “consider the limitations of the technology” given that chatbots can:
The CFPB’s “issues spotlight” cited three key risks from chatbots, including those fueled by large language models and other complex technology:
The post also flagged the negative impact chatbots can have on consumers with limited English proficiency. It noted that “technology trained on a limited number of dialects makes it difficult for consumers with diverse dialect needs to use chatbots to receive help from their financial institution.”
The CFPB based its post on publicly available studies, news articles, press releases and the Bureau’s own complaint database – which it leveraged to cite several complaints as examples of chatbots causing consumer confusion, frustration and harm. The CFPB named a number of large financial institutions that use chatbots, virtual assistants and similar generative technology.
The post encouraged people and companies to take these actions:
The CFPB post is the latest salvo in its ongoing effort to oversee and limit the “shift away from relationship banking and toward algorithmic banking.” Notably, the CFPB did not try to balance its concerns about chatbots by acknowledging that human customer service representatives may make similar mistakes.
Financial institutions supervised by the CFPB should prepare for examiners to ask about how they use chatbots and other AI-based communication tools, as well as internal controls to prevent deceptive communications and other legal violations.
Please reach out to one of the authors if you have questions about the CFPB’s issue spotlight on chatbots. Our team advises clients on the compliant use of AI in financial services, and we would be happy to talk through how this recent post may impact your clients as well.