Researchers Unlock AI in FinTech Delusions
Artificial intelligence (AI) chatbots and agents promise to revolutionize customer service by providing fast, accurate, personalized responses to customer inquiries. However, one key challenge facing the adoption of AI in regulated industries like finance is the issue of “hallucinations” – where AI generates information not based on facts.
To tackle this critical issue, AI customer service platform Algomo has partnered with leading UK universities on cutting-edge research into detecting and preventing dangerous AI hallucinations.
This article is based on my recent exclusive interview with Algomo's COO, Dimitrios Konstantinidis, on the Software Spotlight podcast.
The Risks of AI Hallucination
Hallucination in AI refers to when a system generates information that is completely made up and not based on real data. This can occur in generative AI models like chatbots that try to provide responses to natural language questions and prompts.
While hallucinations may seem harmless in certain contexts, they pose serious business risks, especially in regulated sectors. As Algomo's COO Dimitrios Konstantinidis explained in a recent podcast interview:
“If I'm a financial institution, if I'm a bank… The last thing I want to happen is to give the wrong information out to a customer.”
For example, if a customer asks an AI-powered chatbot a question about their bank account balance and the chatbot provides a fictional number, this could lead to poor financial decisions or liability issues for the bank.
Konstantinidis highlighted that with all the compliance and regulations around industries like finance, having accurate information is critical. Even minor distortions introduced by AI could result in substantial losses.
Algomo's Approach to Preventing Hallucinations
To address the pressing issue of AI hallucinations, Algomo has collaborated with renowned UK universities like the University of Edinburgh on specialized research projects.
The company is tackling hallucinations through initiatives backed by major government funding from bodies like UK Research and Innovation (UKRI).
Algomo's hallucination prevention capabilities stem from techniques like:
- Fine-tuning: Further training AI models on relevant financial data to enhance accuracy in that domain.
- Human-in-the-loop: Having humans review a sample of AI responses to check for inaccuracies and use that feedback to improve the system.
- Prompt engineering: Carefully crafting the words and structure of prompts fed into AI chatbots to constrain the space of potential hallucinated responses.
Konstantinidis explained that Algomo sees AI as an “amplification tool” for human capabilities. By focusing the AI on automating routine inquiries, agents are freed up to handle more complex, judgment-intensive issues.
This human-centered approach allows Algomo's AI agents to solve problems as a person would – gathering information from various sources and tools before acting.
Applications in Finance and Banking
Algomo's proprietary techniques to minimize dangerous AI hallucinations make it well-suited for deployment in sensitive finance and banking settings.
The company already serves various financial services clients. Its AI agents field customer inquiries on topics like:
- Account balances
- Transaction histories
- Quotes and interest rates
- Password resets
- Login problems
For regulated sectors like banking, having rigorous checks against AI hallucination protects institutions from potential compliance violations or lawsuits.
At the same time, Algomo's AI automation enables faster, more consistent customer service – improving metrics like response times, issue resolution rates, and satisfaction scores.
Case Study Results: Major UK Bank
One notable case study of Algomo's impact comes from an ongoing pilot with one of the UK's largest banks.
The bank tested Algomo's AI agents in handling common customer queries across channels like web chat. These included questions on:
- Checking account balances
- Ordering debit cards
- Managing direct debit instructions
- Updating personal details
Over a 3-month pilot, the bank found Algomo's AI could reliably handle ~80% of customer inquiries without any human oversight needed.
For the remaining ~20% of questions too ambiguous or complex for AI, Algomo's system smoothly escalated them to human agents by flagging the conversation as “requiring assistance.”
Beyond reducing call volumes, the bank discovered Algomo's AI improved key customer service metrics like:
- Query response rate: +15%
- Query resolution time: -22%
- Customer effort score: -18%
The impressive pilot results demonstrate how AI automation can decrease costs and increase customer satisfaction.
Ongoing Research to Refine AI Agents
While Algomo's current AI capabilities are production-ready for many use cases, Konstantinidis noted that ongoing research will enable more advanced applications.
Some areas the company is focusing on innovative development include:
Enable AI agents not just to provide information, but execute full transactions like bank transfers or e-commerce purchases via integrated tools and APIs.
Allow AI agents to interact with any external tool or API, eliminating reliance on pre-configured connectors.
Give more control to end users to customize AI behavior for their specific needs, similar to setting up automation rules.
As Algomo continues to pioneer AI agents tailored for customer service settings, its partnerships with academia ensure the technology progresses responsibly and is aligned with human values.
Implementing Responsible AI Solutions
Algomo provides a compelling case study for how commercial AI providers can collaborate with researchers to tackle key challenges like hallucinations proactively.
The company's focus on financial services also highlights the importance of trust and accuracy as AI adoption accelerates across industries.
For business leaders considering deploying AI chatbots or agents, some best practices that Algomo exemplifies include:
- Conduct rigorous in-house testing on hallucination rates and response accuracy before launching new AI capabilities.
- Implement human review processes to continually gather feedback for improving AI model performance.
- Customize models with domain-specific data and fine-tuning for your industry to boost relevance.
- Form research partnerships with universities and organizations pioneering safe and beneficial AI techniques.
With responsible development and deployment methods, AI automation can transform customer and employee experiences while avoiding detrimental impacts from issues like hallucinations.
Algomo's work with top academics and discerning clients paves the way for more reliable, value-aligned AI integration across the enterprise.
From major banks to currency exchanges, Algomo enables financial institutions to tap into AI's potential to enhance operations while instilling trust.
Backed by UK government funding and collaborations with leading universities, the company has developed specialized techniques to curb dangerous AI hallucinations.
By combining state-of-the-art research with a focus on integrating human insight, Algomo continues to push the boundaries for practical AI agents that solve problems just as effectively as human representatives.
As Konstantinidis summed up:
“We want to see a human-centered sort of AI, and inclusive AI where…automate all these sort of boring processes, then humans will have only sort of like more…exciting stuff to do.”
With its customer-first approach and rigorous hallucination prevention capabilities tailored for regulated sectors, Algomo unlocks the next evolution of AI in customer engagement.
Listen to our exclusive interview with Algomo COO Dimitrios Konstantinidis on our recent Software Podcast episode. Learn about Algomo's recently launched AI agents, which go far beyond just chatbots for customer service. These autonomous agents can take actions, leverage tools, and solve problems by integrating human judgment. Examples include e-commerce agents connecting platforms like Shopify for order lookups and travel agents checking real-time room availability. Algomo aims to transform support with practical AI that amplifies human capabilities. Read our Algomo Review to find out how it stacks up against competitors like Intercom, Drift, Ada, ManyChat, and ChatFuel?
AI In Fintech FAQ
What are AI hallucinations, and why do they matter for fintech companies?
AI hallucinations are when AI systems generate fictional information that is not based on facts. This can be risky for fintechs and banks where accuracy is critical, so Algomo has developed specialized techniques to detect and prevent hallucinations.
Is AI safe to use in highly regulated fintech settings?
With proper safeguards like Algomo's hallucination prevention capabilities, AI can be reliable for automating customer inquiries in fintech. Ongoing human oversight also ensures accuracy.
How does Algomo make AI safe for customer service use in finance?
Algomo leverages research collaborations and proprietary techniques like training on relevant financial data to maximize AI accuracy and minimize risky hallucinations.