Speech recognition and voice technologies have advanced rapidly in the last few years. Most people use voice-recognition on a regular basis, interacting with Siri, Alexa, or Cortana. In fact, 51% of consumers are already using voice-enabled virtual assistants via a smartphone. Here is how voice technology is changing the financial industry.
Voice-enabled devices are to save time, to make things easier, and to be more efficient.
When on the road, for example, consumers need a hands-free option. While consumers are perfectly comfortable asking Alexa to play a new song or for the weather forecast, they are a bit more wary of using voice recognition with banking.
Financial institutions, however, have seen a lot of advancements with AI-powered voice technology.
Many are now pushing internal projects or partnering with fintech in order to offer more robust voice-activation services. And while this industry has the added challenge of consumer trust, this technology is truly taking off in this space.
Customer service is key.
One reason why voice technology has taken off in the banking sector is to improve customer service. Thanks to machine learning, this technology can understand accents, slang, dialects, intonation, emphasis, and more, making it easier to interact with and faster to get questions answered.
Customers are increasingly frustrated with outdated technology that either sends them to the wrong place or places them in long wait times. Financial institutions cannot afford to annoy their customers since the rise of fintech has created serious competition in this space.
Voice-driven customer service, therefore, is one key to keeping customers happy.
This technology can answer questions quickly and also understand if there is a particularly angry or upset customer that might need human assistance fast.
Powered by artificial intelligence and machine learning, voice-recognition software does not necessarily replace human employees either. Instead, it serves as an automated support staff that can categorize calls, answer questions, and direct customers to the right place.
Voice payments are starting to pick up as more consumers become comfortable with this type of banking. Business Insider notes that the adoption of voice payments is set to grow from 8% to 31% of US adults by 2022. The report noted that the factors fueling this growth are “an explosion of voice-enabled devices, generational gains in AI, and a strong consumer value proposition for voice payments.”
Currently, touchless payments are typically only used for small e-commerce transactions.
But this will likely change — as consumers will become more reliant on virtual assistants and more comfortable with biometrics in banking.
Those who currently use voice payments can send money to friends via platforms such as Venmo, Square Cash, or PayPal. These customers use Alexa to make a purchase and conduct bank transactions such as paying a credit card or making a transfer.
The potential for voice payments is enormous.
Once consumers adopt the technology — the world of e-commerce will impact how consumers find and buy products. Voice technology creates a new payment method for consumers to use that is even easier than the “one-tap purchase” option.
Overcoming security barriers.
Financial institutions are much more risk-averse than other companies and for good reason. Security breaches have far-reaching impacts beyond just frustrating customers. Given that, while voice technology is quickly evolving, banks are less likely to launch these tools until they are fully secure.
Aside from ensuring the technology is sound, these companies will also have to convince the consumer that they are trustworthy.
Again, this is a more difficult task in this industry, where consumers are less likely to risk personal information being breached. Furthermore, any security problems will make consumers extremely unlikely to use this technology in the future.
Another challenge is new regulatory compliance mandates for global banks. The European Union’s revised Payment Services Directive (PSD2), which requires strong customer authentication (SCA), will also have effects on voice-activated payments.
Security obstacles are certainly daunting in fintech.
Those who are typically less risk-averse, are moving quickly on this technology, pushing innovation forward. Since voice-payments are still nascent and have yet to be widely adopted, first to market platforms will have a distinct advantage.
While the security stakes are high, the consumer demand for personalization and fast-acting technology will push financial institutions forward in this endeavor.
As with AI-powered chatbots, consumers began to trust and rely on these features, which means we can likely expect the same from voice technology.
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Co-Founder and COO of OmniBnk, a neobank that provides financial services to SMEs in Latin America.