How financial institutions are trying to find their voice (assistants)

Voice assistants can make phone calls, check scores, and schedule appointments, so it only makes sense that they can work as banking assistants too.

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

“It is now less focused on physical distribution points and more focused on digital touchpoints. Digital touchpoints in the past has meant that it’s more around online and mobile banking,” Montez told Emerging Tech Brew. “When you think about the internet of things and you think about even younger consumers’ interest in using voice assistants, that is where customers are.”

By the end of this year, 42% of Americans were projected to be monthly voice-assistant users, according to a recent estimate from Insider Intelligence. And that percentage could grow to 45% by 2026, per the research firm.

But despite the popularity of the tech in general, Montez said there’s still a long way to go before voice banking is widely adopted, as “a lot of them [still] have poor functionality or poor user experience.”

Getting smarter

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

According to Montez, the smart-speaker trend hasn’t gained momentum because of challenges around authentication and security (e.g., the potential that an unauthorized person could overhear an out-loud banking conversation).

“If you can’t control and validate someone’s identity, and they perform a transaction on a smart speaker—who’s logging and recording what happened and who invoked that task? Who’s confirming that that person is who they say they are, and that they’re authorized to perform that transaction?” Montez said. “At the end of the day, consumer expectation is that their bank owns that task. Whether they do or they don't, customer perception is, ‘It’s my bank account and the money came out of that account, so therefore the bank is responsible.’”

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

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

“Until the technology starts to mature, and we start to support things that aren’t, like, the top 10 activities that you would do in any channel, and start to look [like] ‘How do you deliver financial insight through a chatbot?’ That’s when you’ll actually start creating real value for consumers versus asking the assistant to tell you your routing number,” Montez said.