Conversational Banking: The New Wave of Fintech Innovation

September 13, 2018

conversational_banking

Conversational banking is an increasingly popular customer interaction paradigm, a new way to access digital banking services through voice or text-based interfaces powered by Artificial Intelligence. With the rising adoption and convenience of virtual assistants — Amazon Alexa, Google Assistant, Apple Siri, Microsoft Cortana, etc. — it's only natural that the financial technology (fintech) world is looking for ways to expand its omnichannel strategy from mobile banking to voice-enabled digital customer engagement.

According to a recent study by Invoca, mobile-only and voice assistant usage continues to grow by roughly 130 percent in 2018, and the opportunities created by this industry will be worth $18 billion in 2023. Despite this massive growth, financial services providers have only scratched the surface of what voice assistants can do across personal finance, wealth management, payment and lending use cases.

In addition, the growth in public cloud adoption will be a factor in increasing usage of voice assistant technology, as consumer protection is key and more secure authentication and data protection by the cloud service providers, e.g. Amazon Web Services and Google Cloud Platform, will help over the next five years.

Voice Assistants Drive Conversational Banking

New research by Adobe Analytics which surveyed over 1,000 U.S. consumers who own a smart speaker indicates that 13% use voice assistants to manage finances. And with over 50,000 voice applications in market between Amazon Alexa Skills and Google Assistant Actions, businesses are racing to build the next generation of consumer applications delivering new engagement models with voice. 

Therefore, digital-savvy financial services leaders need to consider the growth of voice technology and how to leverage conversational AI to augment banking services. Financial institutions and fintech service providers are early on their journey in using voice assistants to engage consumers, but we expect more to follow in the next few years. For example:  

  • "Ok Google, how much money is in my Ally checking account?”

  • "Alexa, transfer $500 from my US Bank savings account to my checking account."

  • "Ok Google, please pay my electric bill to PG&E on Friday." 

  • "Alexa, how much do I owe on my credit card? Can you make a payment?"

In fact, voice-assisted payments are already being used by consumers, as an estimated 8 – 10% of people have used some kind of voice payment at least once.

Leading financial institutions such as Bank of America have already seen impressive results from voice-enabled virtual assistants. For example, its artificial intelligence-driven virtual financial assistant Erica now has more than 2 million users. This latest milestone more than doubles Erica’s users in less than one month. Erica is the first widely available of its kind and employs the latest technology in AI, predictive analytics and natural language. Clients can type, text or talk with Erica to help meet their financial needs. 

Enable Data-Driven Personalization Across Channels

The fintech industry has been leveraging artificial intelligence, machine learning and natural language processing to make sense of the trillions of transactions, billions of dollars, and millions of users. And since fintech tools help to aggregate, analyze, and report on data, banks and financial institutions are able to provide each individual with a customized, personalized banking experience. These innovative tools enable consumers to improve their financial health and better manage their personal finances, more efficiently obtain loans, make payments, and receive investment advice, etc.

Since voice applications can also leverage personalization and take advantage of the variable reporting data that comes from multiple financial institutions, it's not hard to imagine some of the use cases for conversational banking once account linking, such as through a data aggregation platform like Envestnet | Yodlee, is implemented: 

Personal Finance 

  • Ask for bank account balances, as well as pending payments and deposits

  • Request analysis of current financial health and predictive insights to increase savings

  • Ask about your transaction history and how to reallocate extra budget

Wealth Management

  • Inquire about your investment portfolio and how to optimize returns

  • Ask for stock updates and receive email/text alerts when a stock reaches a certain price

  • Receive updates on your 401(k) and find out how to rollover assets to an IRA 

Payments 

  • Schedule and make payments to service providers and credit card companies

  • Transfer money between accounts or deposit money into a retirement account

  • Send money to friends/family using a financial application like Zelle, PayPal or Venmo

Lending

  • Ask about the latest interest rates on mortgage loans and refinancing options

  • Obtain information on small business loans and how to get access to working capital

  • Ask about personal loan options for major expenses or debt consolidation

We're already seeing several banks and credit card providers like Capital One, American Express, and US Bank offer skills on Alexa, as do banks like Ally. ICICI, OCBC, Barclays, and ING also have voice-enabled applications on Siri. 

You can transfer money with PayPal via Siri, use Google Assistant to send money via Google Pay, and Amazon is currently looking to integrate Venmo into the Alexa ecosystem.

Differentiate Your Brand and Engage Consumers Through Voice

In conclusion, as financial services companies need to continuously differentiate their brands and deliver personalized and predictive digital banking services through an omnichannel approach, they will need to move beyond web and mobile interactions to engage consumers through voice-activated devices, whether through a smart speaker at home or mobile devices on the go. 

Six keys to a successful conversational banking strategy include: acquiring needed talent, understanding new voice technology, improving privacy and security, ensuring transparency with consumers, delivering consistent experiences across channels, and implementing a hybrid model of humans plus technology.

Are you looking to extend your digital banking strategy to engage consumers through conversational interfaces? PullString Converse voice technology software enables cross-functional teams to quickly prototype ideas with a visual interface, share with key stakeholders for feedback, and then integrate into existing financial systems and publish to platforms like Amazon Alexa and Google Assistant when ready. 

Protecting the security and privacy of our customers' data is the number one priority at PullString. To learn more about how to use PullString Converse to securely link accounts and create voice-enabled financial applications, contact us for a consultation on the various ways you can leverage conversational AI to deliver high-fidelity voice banking experiences.

Written by Jenna Cheng

Jenna Cheng is the Director of Marketing at PullString, where she leads brand awareness, consideration and demand generation initiatives for the company. She is passionate about emerging voice technologies and growing the PullString community of voice app innovators, conversational designers, product managers, digital marketers, and developers.

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