Banking on the Rise of Voice Technology

In 2014, Dutch bank ING launched a new voice-activated virtual assistant through its mobile app. Considered to be the first full deployment of voice banking, it went by the name of Inge. Voice banking has now been around for about a decade, its arrival accompanied by plenty of high-tech hype. However, it got off to a slow start as most financial institutions took a cautious approach to the new technology. So, how’s it going now?A good place to start is payments. Back in 2017, just 8% of customers were using voice payments; by 2022, that rate of usage had reached 31%. There are now an estimated 18MM US consumers who have tried voice payments. While payments represent an important transactional use of voice tech, they are just one of many ways voice recognition can be used by financial institutions. Bank of America, whose Erica voice assistant was an early pioneer, now helps customers perform a variety of tasks, like checking balances or transferring money. Other financial companies have been adding voice applications as well. The estimated global value of voice banking is now about $1.5B and is projected to double by 2030.What’s Driving Recent GrowthLike so much in business these days, the growth of voice banking is tied to the rise of artificial intelligence (AI). With AI, financial institutions can provide increasingly sophisticated services through voice banking used on a variety of devices, from smartphones to smartwatches to smart speakers, like the Amazon Echo. The ability to verbally tell your bank what to do is easier than starting up an app and typing in commands. People appreciate anything that makes banking more efficient and convenient, and voice banking can check off both boxes for a growing list of use cases. Benefits of Voice BankingIn an age that demands ever more complex passwords, the convenience of voice banking can be a panacea for customers. A strong voice banking system can provide voice authentication, which allows customers to access accounts without the need for passwords, usernames, and account numbers. Voice banking uses biometric authentication to distinguish the unique characteristics of an individual voice. Voice banking can also be multilingual, which is a big plus in our diverse society and can enable the technology to be used internationally. Voice technology can also be a game-changer for the visually impaired to complete simple banking requests unaided by other parties or assistive technology.Financial institutions can benefit as well, because biometric identification can enhance security. In addition, voice banking can be used to execute back-office functions like creating reports or updating records.  Two years ago, we looked at the rise of voice banking and wondered if it was the next must-have for CFIs. There is still no definitive answer, but it is clear that voice banking continues to grow and more financial institutions are adding or expanding voice banking services.The DownsideVoice banking is not perfect. Everything depends on understanding spoken words and the nuances of language. Bots are getting better at it, but the threads about mistakes or misunderstandings by chatbots like Alexa or Siri are long and ubiquitous, such as the gambler who asked for help with his addiction and got a list of nearby casinos, or the husband asking for a Valentine’s Day restaurant suggestion who got a list of nearby fast food joints. Mistakes in voice banking could be more serious. For example, a failure to recognize a customer, perhaps because of a bad phone connection, could end up locking the customer out of their accounts. In addition, human voices change over time. One study found that a human voice can change significantly in as little as two years, which can confound biometric voice recognition. This can be especially troublesome for occasional or rare users of voice banking. Voice banking has started to catch on and provides benefits to both customers and their banks. But the bots are still learning. Banks that use or want to adopt voice banking need to be aware of the shortcomings and have responses ready for any failures.