Home tech products such as Alexa and Siri have made voice activation a part of everyday life. Financial services firms are following suit – and the benefits go far beyond looking cool
the Covid-19 pandemic has shifted us all much closer to digital services when it comes to managing our finances, with even the most reluctant consumers forced online due to repeated lockdowns.
Amid this sustained and growing wave of change, voice-activated technology is making itself heard loud and clear across the financial services sector.
Voice activation and financial services are a natural fit. The explosion of artificial intelligence (AI)-powered personal assistants such as Amazon’s Alexa and Apple’s Siri has brought voice technology into people’s homes and cars. Shouting commands at a box in your kitchen or telling your car to “call home” no longer feels strange.
Meanwhile, banking and financial services organisations operate in a very customer-centric industry – and it’s increasingly important for them to engage with consumers on their own terms, matching the experiences they are getting in adjacent industries.
“Financial institutions really have to get with the times,” says Martin Keelagher, CEO of Agile Automations. “People have seen what’s possible in a world re-imagined by the likes of Netflix, Amazon and Uber, and they are demanding the same level of treatment in financial services.
“Banks and other financial services providers can’t miss the opportunity to apply this innovation to their front-line services. Some have tested the water in recent years – rolling out voice ID in telephone banking, for example – but they need to consider how they can widen use cases in a secure, compliant manner that everyone in their value chain is comfortable with.”
Expanding the use cases
Many specialists agree that banks and other financial institutions are the logical next stop for the smart speaker. And the banks are reacting.
In 2019, Bank of America led the way, releasing its very own AI-powered digital helper, Erica. According to the bank, Erica attracted more than six million users in its first six months, with daily client engagement doubling.
Customers can interact with Erica through voice commands, making it more convenient when they’re engrossed in another task. Its current functions include helping with transactional and other financial queries, handling bill payments and unlocking new debit or credit cards.
Aditya Bhasin, Bank of America’s Chief Information Officer (CIO), has been quick to point out that this is just the beginning. Over time, Erica’s learning curve will make it possible for users to not only transfer money to a friend or list their transactions at a specific merchant, but also make better financial decisions by analysing their habits and providing bespoke guidance.
Other large banking organisations are beginning to follow suit. JP Morgan’s corporate and investment bank research, including specific analyst research and stock tearsheets, is now available to clients through an Alexa skill.
Meanwhile, a number of other banks are teaming up with the ‘big techs’ to shift the dial on what’s possible. Amazon Web Services (AWS), for example, is working with incumbents such as Barclays and Capital One – as well as challenger brands including Starling and Monzo – supporting migrations to the cloud as it looks to make its mark on the banking business.
In April this year, Microsoft agreed to buy voice recognition pioneer Nuance Communications in an all-cash transaction that gives the company an equity value of $16bn. The deal, the second largest acquisition in Microsoft’s history, comes almost two years after the two companies first partnered to roll out advanced AI systems that help doctors with administrative tasks.
Microsoft’s famously forward-looking CEO, Satya Nadella, is well aware that CIOs across the financial services spectrum are busy exploring the potential of voice technology.
They’re looking to support everything from chatbots that help customers find answers to questions about products and services, to apps that help mitigate the effects of Covid-19 and help companies to manage the return to offices.
“My reading is that the Nuance portfolio that relates to speech will become integrated with, and will enhance, Microsoft Teams and Dynamics to deliver a next-generation customer engagement experience,” Bern Elliot, Vice President and Analyst at Gartner, told the Financial Times recently.
And don’t forget the emerging fintechs. Until recently, the pioneering attempts at making voice technology effective, secure and flexible were seen as the preserve of the big financial institutions with the largest pool of resources.
However, with an increasing number of agile start-ups and open-source projects coming up, it’s likely the technology will become increasingly democratised.
One UK fintech, a cloud payroll solution, is working with Amazon to introduce features to its app. Users will soon be able to get their pay slip, tax and pension information by asking Alexa, saving time rifling through boxes of old paperwork.
Any queries that can’t be solved by smart AI chatbots will be transferred to a company-branded payroll team. It will also be possible for an employee’s earnings to be split between multiple bank accounts, perhaps to cover savings, bills or simply day-to-day living.
Developments in voice technology go far beyond simple convenience. For some, they can be life-changing. Those living with a disability, for example, can benefit from cutting-edge voice services that greatly enhance their financial inclusion and independence when it comes to keeping control of their money.
Bank of America’s Erica features an innovative ‘gesture’ command-prediction function, which has been designed to create a more seamless experience for consumers with impairments.
Banks, fintechs and card companies that are adopting voice-activation technology aren’t doing so simply to boost their ‘cool’ factor – they’re preparing for voice banking’s logical place in the future financial ecosystem.
Ironing out security concerns
While the idea of being able to voice a thought and have your banking assistant take care of all your concerns is hugely appealing, there is of course the obvious question of security.
What happens if a cyber criminal clips together a voice command to make illicit use of it? Or you return home after a few beers and make a bullish purchase you wouldn’t have otherwise considered?
“There are some questions over API integration and where the voice data is stored,” says Keelagher. “Then there are considerations around affordability controls. Perhaps the best way forward is to introduce payment limits, like we see with contactless technology. You could certainly argue that the ultimate success of a voice purchase feature is dependent on a sensible limit function or cap.”
These are valid questions and relevant concerns, and banks and their partners are busily collaborating on them.
One of the big strengths of AI and machine learning is that they can significantly help financial institutions to protect their consumers and reduce the risk of fraudulent behaviour.
There are a number of fintech start-ups dedicated solely to combatting financial crime. The banks are working closely with the likes of compliance expert Pelican to help improve the security behind their AI helpers, and this is where AI security and voice banking innovations go hand-in-hand.
“As we recover from the pandemic and re-engineer financial services, biometrics and technology will dictate the way forward,” adds Keelagher.
“Voice-activated technology has a major role to play in this new ecosystem and the numerous partnerships that we’re seeing across the financial landscape will accelerate adoption.”