How Financial Institutions Are Trying To Find Their Voice (Wizards)

Voice assistants can make calls, check scores, and schedule appointments, so it only makes sense that they could also work as bank clerks.

According to Tiffani Montez, principal banking analyst at Insider Intelligence, in recent years, as part of a larger effort by banks, financial institutions have been experimenting with voice assistants to meet customers where they are.

“It’s now less focused on physical distribution points and more on digital touchpoints. Digital touchpoints in the past have made it more about online and mobile banking,” Montez told Emerging Tech Brew. “If you think about the Internet of Things and the interest of even younger consumers in using voice assistants, then customers are there.”

According to a recent estimate by Insider Intelligence, 42% of Americans are expected to be using voice assistants on a monthly basis by the end of this year. And that percentage could rise to 45% by 2026, according to the research firm.

But despite the popularity of the technology in general, Montez said there’s still a long way to go before voice banking becomes widespread because “a lot of them [still] have poor functionality or poor user experience.”

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When financial institutions like Capital One added Alexa Skills in 2016 and US Bank and Ally Bank in 2017, functionality focused on relatively simple tasks like checking account balances, paying credit card bills, and managing car loans.

According to Montez, the smart speaker trend hasn’t gained momentum because of challenges related to authentication and security (such as the possibility that an unauthorized person could overhear a loud bank conversation).

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“If you can’t control and validate someone’s identity and that person completes a transaction on a smart speaker – who is logging and recording what happened and who invoked that task? Who confirms that this person is who they say they are and is authorized to conduct this transaction?” Montez said. “Ultimately, consumers expect their bank to do that. Whether they do it or not, the customer perception is, ‘It’s my bank account and the money came from that account, so the bank is responsible.’”

She said financial institutions are now focusing “the bulk of investment” on building voice and text-based chat experiences into their own own Apps rather than integrating with third-party platforms like Facebook Messenger or Alexa. One example is Bank of America’s virtual assistant, Erica, which the institution says has been used more than 1 billion times by 32 million customers since it was released in 2018. The technology has both text and voice capabilities.

But ultimately, Montez said that if voice assistants are ever to become a mainstream channel for banking, the technology will need to move beyond their current offerings.

“Until the technology starts to mature and we start supporting things that aren’t in the top 10 things you would do in every channel and start looking.” [like] “How do you deliver financial insights via a chatbot?” That’s where you actually start creating real value for consumers, rather than asking the assistant to tell you your routing number,” Montez said.