CFPB warns AI chatbots in banking must comply with law

The Consumer Financial Protection Bureau today warned financial institutions that they are legally obligated to “competently interact with customers” about financial products or services even if those interactions occur through chatbots powered by artificial intelligence. In a report on the use of chatbots in banking, the agency said the technology is useful for answering basic customer inquiries but its effectiveness wanes as the problems raised become more complex. Financial institutions risk running afoul of the law and alienating customers when deploying chatbots, the CFPB said.

“Like the processes they replace, chatbots must comply with all applicable federal consumer financial laws, and entities may be liable for violating those laws when they fail to do so,” the CFPB said. “Chatbots can also raise certain privacy and security risks. When chatbots are poorly designed, or when customers are unable to get support, there can be widespread harm and customer trust can be significantly undermined.”

The CFPB didn’t propose any new rules regarding the use of chatbots but said it was actively monitoring the market “and expects institutions using chatbots to do so in a manner consistent with the customer and legal obligations.”