Community banks dabble with voice banking, but still not fully sold

Bank Independent in Sheffield, Ala., is experimenting with voice banking.

Customers can now interact with the $1.5 billion-asset bank through Amazon Echo. Alexa will now answer questions about account balances, routing numbers, branch hours, interest rates and money transfers, among other things.

Bank Independent is one of a handful of community banks that has become an early adopter of voice banking, an area where much larger banks are leading the way. A number of small banks are reluctant to jump into new technology, with concerns that include cybersecurity and implementation costs.

While conversational banking is unlikely to be a cure-all for community banks in the fight against growing competition, it does represent another way to engage with clients, industry observers said.

“I don’t think it’s game changing; but it’s a nice additional channel to interact with the customer,” said Kevin Tweddle, leader of innovation and financial technology with the Independent Community Bankers of America, adding that it makes sense for innovative banks to leverage smart devices.

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Only a quarter of community bankers believe it is important or very important to be a leader in new or emerging technology adoption, according to a survey of 521 banks conducted between April and July by the Federal Reserve, Conference of State Bank Supervisors and the Federal Deposit Insurance Corp. About 22% said it was not important.

Still, community banks are slowly warming up to technology initiatives like voice banking, Tweddle said.

“I like the future of voice banking — it simplifies things,” Tweddle said. “That’s what fintech is. It’s about faster, cheaper, simpler and safer. Alexa checks the boxes on that.”

Bank Independent, which worked with tech provider Enacomm to launch voice banking earlier this month, started thinking about ways it could use Alexa once the Amazon Echo became popular, said Kelly Burdette, the bank's senior vice president of digital and product. Executives viewed Alexa as a way to stand out from competitors, he said.

“We believe technology, like this new voice banking skill, is an enabler of great personal service, not a substitute for personal service,” said Rick Wardlaw, Bank Independent's CEO. “We are excited to be able to offer another convenient channel for our customers to bank with us.”

Bank Independent hopes to add more conversational banking capabilities, including personal financial management, advice and spending habits. It also would like to expand voice banking to include other brands of smart devices.

The bank, which does not expect Alexa use to take off as quickly as mobile banking, declined to share adoption data.

“We still do not believe in the short term that the masses are going to come to this,” Burdette said. “We believe this will be a slow adoption process as customers get comfortable from a security perspective.”

Bank Independent isn't the only community bank that is dabbling with voice banking.

Avidia Bank in Hudson, Mass., is testing its voice banking capabilities, said CarrieAnne Cormier, the $1.6 billion-asset bank's vice president of retail operations and strategy. Avidia, which is working with FIS to roll out voice banking through Alexa, keeps Amazon Echos in its branches to show customers how they could use the device for personal banking.

“They really think it’s cool," Cormier said. "It's that cool factor of, ‘Oh, wow I didn’t know you could do that.’”

Some customers are more skeptical, expressing security concerns and uncertainty about using a smart device for banking, Cormier said. Branch employees have discussions with those clients to explain that authentication is required to bank through Alexa.

Launching the ability to bank through Alexa has taken Avidia and Bank Independent several months longer than expected. Avidia ran into trouble with how the smart device heard the bank’s name — a common user challenge.

Avidia is close to launching the new channel, but it needs to make sure Alexa learns the bank’s name first.

“Our name isn’t a word, so Amazon has a hard time understanding it,” Cormier said. “Ask Avidia Bank what my balance is, Alexa hears it as ‘a video bank.’”

Once it is ready to go, Avidia plans to use social media to spread the word that customers can bank through Amazon Echo.

Banks could also use Amazon Echo internally to produce reports or sort data, said Stacey Zuniga, Enacomm's vice president of financial services. Ideally, Alexa will eventually interact more other platforms such as chat bots and ATMs, he said.

In one scenario, customers would ask Alexa for a bank statement that could be sent to the customer via text or email.

“The power in Alexa isn’t just that I speak to it, the real power is she can understand what I want and deliver it to me on any channel,” Zuniga said.

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