Given that chatbots interact with customers, Ms Lumsden Kelly said it raises some interesting questions around whether a financial service is being provided, and if so, who is providing that financial service?

“Is it the developer, or the licensee organisation, and does it depend where the software is hosted?” she said.

A chatbot may be providing a financial service if it is dealing with a financial service, she said.

“This may happen if the services it provides result in an issue, application, acquisition, variation or disposal of a financial product,” she said.

It could also be providing a financial service if it contains content that is financial product advice, she added.

“This is an opinion or recommendation that is intended to influence a consumer to make a decision about a financial product. It also covers opinions or recommendations that a reasonable person may consider as being intended to influence a decision,” she explained.

Whether a chatbot is providing financial product advice to customers, she said, will depend on the questions and responses that are approved by the business licensing the chatbot software.

“If responses containing advice are approved by the licensee organisation, and the chatbot is capable of tailoring such a response based on the consumer’s particular circumstances, then it will be personal advice. If there is no tailoring capability, it’s general advice,” she said.

“Generally, it’s presently unlikely that chatbots will provide personal advice to a customer, as this requires more complex algorithms of the type used for robo-advice. Such a chatbot would be, in essence, a robo-adviser.”

A chatbot could also be dealing in financial services, she said, if the customer enters into a financial transaction as they interact with the chatbot, such as if an insurance application can be lodged with a chatbot or a policy issued.

“If financial product advice is provided or the chatbot deals in financial services, then you need to determine who is actually providing that service,” she said.

A software business that licenses a chatbot to a financial services business can’t be responsible for the services its technology provides, she said, even if they offer support, customer service or even hosting services.

“Think of it like this — Google isn’t providing a financial service when someone gives financial advice over Gmail. The person providing the service is the one who creates the content of the email,” she said.

“This means that businesses who create content for chatbots need to be aware of what services the chatbots are providing, because they may need to hold an AFS or credit licence and make sure that they’re compliant with the financial services or consumer credit laws.”