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In an embarrassing turn of events, Virgin Money’s AI-powered chatbot has publicly scolded a customer for using the word “virgin” in their query, highlighting the potential risks of deploying external artificial intelligence tools in customer service.
The incident came to light when fintech commentator and Virgin Money customer David Birch shared his experience on LinkedIn. Upon asking a simple question about merging two ISAs with Virgin Money, the chatbot responded with a stern warning about inappropriate language, seemingly flagging its own brand name as offensive content.
The bank swiftly issued an apology on LinkedIn, explaining that there was “more at work than just single word exception” and assured customers that improvements to the chatbot were already scheduled. This mishap occurs amidst a broader push by UK high-street banks to implement customer-facing generative AI tools, aimed at enhancing service personalisation and customer loyalty.
The timing is particularly sensitive following Nationwide’s £2.8 billion acquisition of Virgin Money last year. Nationwide has pledged to enhance the bank’s customer satisfaction metrics, especially given Virgin Money’s concerning ranking of 15th out of 16th in overall service quality in 2023, according to Ipsos surveys.
Sources close to the matter revealed that the error occurred on one of Virgin Money’s older chatbot systems, which operates on basic natural language processing rather than their latest upgraded models. This incident serves as a stark reminder of the challenges banks face as they navigate the integration of AI technology into their customer service operations.
The banking sector’s AI implementation struggles mirror wider industry concerns about chatbot reliability, particularly following incidents like Air Canada’s recent compensation payout to a customer who received incorrect information from their AI system. As UK banks continue their technological transformation, the balance between innovation and reliability remains a critical challenge.
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