BAI Managing Editor Lou Carlozo
Lou Carlozo Jan 26, 2017

In the new recipe for helpful banking robots, Pepper provides the spice

Enlisting the real-life equivalent of C-3PO, with his true-to-human behavior and unfailingly polite banter, may still be some years away for the world's banks. But in the meantime, the Japanese retail and corporate banking company Mizuho Financial Group has enlisted an innovation as incredible as it is lovable: Pepper the robot.

First introduced at Mizuho's flagship branch in central Tokyo, Pepper is a computerized concierge. The bright, shiny white humanoid stands 4-feet tall and entertains customers with a mix of games and multimedia, while providing basic information on Mizuho products.

And his robotic leap into banking’s next generation earned Mizuho a Channel Innovation award in the 2016 BAI Global Innovation Awards. Pepper and his strong customer-centric focus grew from an effort on the bank's innovation side that dates to April 2014, says Tetsuhiko Saito, Mizuho's senior managing executive officer. But getting Pepper to strike the right notes was not an effortless process.

"We were always concerned that cutting-edge technologies wouldn’t be welcomed by customers," Saito says. That wasn't the only obstacle Mizuho faced in Pepper’s development.  One fear was that "robotic concierge services might be too hard a technology to deploy."

To move forward, Pepper was tested with customer focus groups not merely as a novelty, but also as a tool to address real-life banking needs. "Our customers responded with enthusiasm,” Saito says. “To understand your customers deeply is essential to creating innovative services.”

It turns out that Pepper not only understands customers: He delights them. As a Mizuho bank ambassador, he greets customers at the door with a friendly "What can I do for you today?" in a reassuring, childlike voice. Mizuho reports a 10-percent increase in branch traffic since Pepper’s debut—with some curious people, no doubt, showing up just to see the robot in action.

Despite appearances, Pepper is no child's toy. He uses facial recognition technology to identify whom he's talking to. He then escorts customers to the proper bank employee and will even assure the nervous ones (those looking for a first-ever mortgage, for example) by saying, "Don't worry." Meanwhile, an iPad on Pepper's chest communicates with bank staff and clients simultaneously. As Saito puts it, “We believe Pepper creates a friendlier atmosphere in our branch.”

Mizuho captured honors based on criteria that embraced a number of key factors, says Matt Calman, director of the Innovation Outreach Program at Microsoft and a judge at last year’s BAI Global Innovation Awards.

“I’m looking for firms that [introduce] well-recognized disruption,” Calman says. “The winners in general are firms that adopt this kind of disruptive technology in a way that creates customer value without drifting too far from the mission of the bank.” That harkens to Mizuho’s goal to make sure Pepper advanced the bank’s mission to deliver quality service rather than just provide a high-tech diversion.

Steve Monaghan, the chief investment and innovation officer at Gen.Life Limited, also shared his perspective on what makes a strong Awards entry.

“What I look for in the winners is really a bold move on technology, someone who’s really stepping aside from the industry and propelling the industry forward against new technological standards,” Monaghan said. “We also look for people who drive huge customer engagement, huge adoption and that advance the industry ethically, morally and financially.”

Lou Carlozo is the managing editor at BAI.

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