Today, artificial intelligence seems to be combined most often with voice recognition, and together, they are only going to become more and more sophisticated in the future.
The consensus seems to point to voice recognition (i.e., voice commands) gaining ground while keyboards and other control panels take on a secondary role. For many consumers, there is simply nothing easier than using one’s voice.
With this in mind, financial institutions should carefully consider the practical applications of these powerful technologies and how they can be deployed to improve the overall user experience for critical banking tasks such as payments.
Smart speakers infiltrate
Consumers have certainly begun to adopt voice recognition software solutions at a rapid pace. There are approximately 31 million Amazon Echos/Alexas installed in the U.S., as of yearend 2017, and 14 million Google Home units, according to research by Consumer Intelligence Research Partners LLC.
Within the context of this growth in smart home speakers, financial institutions must be able to offer practical integrations into these solutions, as well as leveraging the A.I. technology that these platforms provide access to in order to remain relevant in the financial lives of their consumers and business account holders.
Yet voice services for banks represent an evolution, not a standalone revolution.
VRU tech and telephone banking
While the best examples of innovation around consumer-facing voice interaction are smart home speakers and smartphone assistants, voice interaction in banking has been available for some time. In the 80s, many of the core processors and ancillary providers launched voice response unit (VRU) or interactive voice response (IVR) technology that quickly became known as telephone banking.
Financial institutions of all sizes took advantage of this technology, which offered customers a series of intuitive, customizable menus that were available even when branches were closed. The technology was fairly inexpensive, required little maintenance, and gave consumers access to their accounts to perform a variety of basic banking tasks, such as balance inquiries and transfers.
The concepts behind this older technology has effectively been reborn into a more responsive, modern version with much more potential as it utilizes artificial intelligence. [Also read Dan Fisher’s recent blog, “What was hot, now is not”]
Who is already talking to Alexa?
As one of the emerging trends in banking, A.I. is integrating voice recognition software into the digital experience and leveraging devices such as the Amazon Echo or Google Home.
In 2016, Capital One was one of the first U.S. bank to announce its customers could use Amazon Echo to pay their bills, among other tasks. U.S. Bank and Ally Bank developed integrations or “skills” for Amazon Echo in 2017. FIS, Citigroup, and Wells Fargo have also confirmed that they are testing uses for Amazon Echo.
These megabanks have seen the value of helping consumers accomplish banking tasks through their voices, instead of typing requests on devices.
While these financial institutions are incredibly large and have well-funded research and development departments, as these integrations become more commonplace, consumers will soon expect the same solutions from their regional and local community financial institutions. Regardless of size, all financial institutions can benefit from the implementation of A.I. into their digital experience.
Private banker in every home?
Because of its simple concept, consumers have adopted voice interaction software solutions at a rapid rate. Devices such as Amazon Echo and Google Home that rely on Natural Language Processing technology are quickly multiplying.
Juniper Research suggests that by 2022, more than 55% of households in the United States will have voice-enabled smart speakers. These smart devices are conversational and always present, making them an ideal example of how A.I. can be seamlessly integrated into consumers’ daily lives.
Furthermore, even the most tech-averse consumers can easily master the skills needed to interact with the interface. Few consumers have trouble asking Alexa about the weather and quickly grow dependent on her ability to set reminders, build shopping lists, or make purchases. [Read “Alexa, teach my Grandmother to use Amazon”]
As the adoption rate of smart home devices grows, so does the opportunity for financial institutions to provide value. Banks will effectively be able to offer all their customers a “private banker” experience previously only available to elite customers.
This “private banker” experience would manage the account holder’s day-to-day banking needs, including paying bills, monitoring account activity, and managing cash. Through voice interaction, financial institutions can offer all of their customers the experience of having a private banker in their own homes.
And just as a private banker would proactively make decisions based on a customer’s needs and individual profile, consumers will find that accessing their bank through their home smart speaker and asking the device to help manage their financial lives is a natural fit for this software’s capabilities.
This technology is not just for the young. The ability to use one’s voice to transact has appeal. Voice interaction does not require key strokes for responses, nor do you need to enter long account numbers or specific syntax.
Consumers are now asking their financial institutions about having the ability to make simple payments more convenient. The financial services industry has lagged behind other consumer-facing industries, such as the ride-sharing industry or the meal-kit delivery services, as consumers look to technology to add value by simplifying their lives, namely by completing everyday tasks for them.
Financial institutions will need to find solutions that meet the needs created by this “do it for me” mentality. Voice interaction software, along with A.I., will be critical in solving this discrepancy between consumers’ demands and existing banking solutions.
Voice recognition vs. voice interaction
When building or adopting voice-based solutions, financial institutions should distinguish between pure voice recognition software and A.I.-based voice interaction.
Pure voice recognition is reactive, simply translating or transcribing human speech into data. Early examples of this would include voice-to-text software designed to eliminate typing tasks.
Rather than just translating your words, voice interaction takes voice recognition further by replying to the user in an intelligent way. This can make the conversation two-sided and also entails the device’s learning based on prior interactions.
Virtual assistants such as Alexa, Siri, and Cortana combine voice recognition software and voice interaction, and they are growing smarter and more conversational through A.I.
For example, it is not farfetched to envision in the near future a bank’s customer and Amazon Echo user asking, “Alexa, how are my finances today?” Alexa would not only provide an overview of the funds available in different bank accounts, but then remind the user that a bill is due at the end of the week and offer to pay it.
“She” might also make further suggestions, such as recommending moving excess funds from a checking account to a high-interest savings account. Through the added layer of voice interaction, these exchanges become truly intelligent and virtual assistants can serve the role of a personal private banker.
Financial institutions need to act now on opportunities available through the recent developments in A.I. and voice interaction technology. This technology has the potential to change the banking industry through its ease-of-use and growing adoption rates, as smart home devices become more ubiquitous and smartphones are increasingly equipped with virtual assistants.
Voice software capabilities represent a rapidly changing set of technologies and financial institutions should look for innovative partners then can help them to adapt to the “Do It For Me” culture that is quickly becoming the norm.
About the author
Fran Duggan is CEO of Payrailz, a digital payments company offering bill payment and money transfer solutions to banks and credit unions.