Is your voice the passport to digital, personal, seamless banking?

By Nitin Garg | 19 February 2018

In business, listening to your customers is vital, so it is little wonder that financial services companies are ramping up their use of voice controlled intelligent digital assistants. According to a Pew Research Center survey, digital assistants are being incorporated into a wide range of consumer products, and nearly half of U.S. adults (46%) say they now use these applications to interact with smartphones and other devices. While Siri was originally released in 2011 and Alexa came out in 2014, they have really taken off with their integration to devices such as Amazon Echo and Apple HomePod.

It wasn’t too long ago that banks realised that customer preferences for interactions were shifting towards digital and new channels. Mobile emerged as a channel of choice and everyone started rolling out mobile apps. In many countries, mobile banking was being preferred over internet banking. However, as mobile banking is reaching its prime, voice banking may be getting ready to take it to the next level.

Convenience and speed are clearly among the key reasons that people are using digital assistants. While pecking at small keyboards was something that suited the younger generation more than their elders, voice control levels the playing field. In addition, the experience offered by voice banking is closer to normal human interaction than typing and clicking. The “personal” aspect should align well with people who are more used to talking to humans at bank branches. Also, because of its convenience, customers may expect not only the big banks to offer this but might start demanding this functionality from even the community banks, mutuals, credit unions and other non-banking financial services companies. Very soon, conversation and voice messaging may become popular channels in banking, and interactions with bots might also be preferred over the mobile apps.

Many large banks have already started offering voice enabled banking options though they are often quite limited in what they can do. Some are using it only as an additional means for authentication while others are experimenting with providing limited access to banking services such as fund transfers, enquiries and making payments. With a unique combination of artificial intelligence and machine learning, digital assistants could offer the customer endless opportunities to optimize their banking relationship, manage their finances, improve their credit profile and track loan repayments. The best part is that this could benefit all – high net worth individuals, corporate and small customers.

The ongoing wave of digital transformation has resulted in reducing the dependency on physical transactions in specialised areas such as lending. While a lot remains to be done, loan processes are becoming faster, paperless, automated, omni-channel ready and seamless. Is voice banking likely to make an impact in lending?  

Consider the example that today, a customer browsing travel sites already receives targeted ads and offers from hotels, airlines and holiday planners. A smart digital assistant, operating on the customer’s smartphone could look at the person’s browsing history, analyse their financial behaviour, forecast upcoming payments, access their credit profile and display a range of relevant loan offerings. In an AI-powered era, the digital assistants could go even further and negotiate the loan with the bank’s bots on behalf of the customer. All that the customer needs to do is to pick the best offer. When the customer selects one offer, the loan could be easily processed immediately, leveraging the digital setup in place. Similarly, a customer may walk into a branch and interact with Chatbots asking for details of loan products. Not only would this save time for the customer and the bank but it would also be extremely cost effective. An existing bank customer may simply speak into his phone to get info on pre-approved customised offers or loan account details. While it may seem to be a distant reality today, it is unlikely to remain so for long.

However all of this depends on the shift from physical to digital. This transition isn’t complete at most banks and many are still struggling to deliver a truly digital experience. Although great strides have been made in some areas, a report by Bain & Company indicates that while lending makes up more than one-third of retail bank revenues, banks can handle only 7% of products digitally from end-to-end. While the complexity shouldn’t be underestimated, it is clear that some part of the relatively slower adoption is a result of inertia. However, the rise of fintech is demonstrating how quickly changes can take hold. It does appear that each successive wave of new technology increases the speed of change, so perhaps voice-driven banking will be a bigger threat to established players?

So how can banks leverage voice banking? How can they offer a step change in the end-to-end digital experience? A well-integrated set-up would offer customers the fast, simple and user friendly experience that they are looking for. Clearly there are security considerations such as multi-factor authentication, unique voice-identity pins and security protocols to guarantee that a customer’s voice cannot be faked. Tremendous work still needs to be done to make voice identification technologies work in a frictionless manner. But as voice banking gains more traction, the banks can at least ensure that they have the required end-to-end digital set-up in place so that when voice banking matures, they aren’t left far behind.

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