"I'm on the side of the road and need help. What should I do?"

USAA's voice-activated mobile banking app has received that question. Seriously. Though an extreme case, it is a reminder that consumers are testing the limits of technology's personalized services and financial services companies have to respond.

With this in mind, USAA — which primarily serves members of the military and their families — posted an important update this week. It is meant to improve the app's ability to provide automated yet thoughtful answers to questions about banking and beyond.

The San Antonio company, which began pioneering voice recognition in its mobile app a year ago, has expanded the app's knowledge base, added a search function and connected its mobile app to its contact center.

When a member taps a button to talk to a live customer service representative, the employee knows what that member was looking at and doing just prior.

And in partnership with the speech-recognition technology firm Nuance, USAA has improved the app's voice algorithms and added machine learning such that its "Virtual Assistant" voice-recognition system can learn from members' behavior to anticipate their needs. It now offers voice-activated banking to Apple and Android users.

The upgrade shows that USAA is taking a leadership role in attempting to solve the top problem customers have with mobile banking: poor customer service, experts said.

Research CEB TowerGroup conducted late last year found that customer support issues are holding digital channels back. Asked where they would prefer to receive customer assistance, only 18% of banking customers selected digital channels; 75% chose personal channels.

Bank customers reported a lack of communication around their problems. Only 44% said their issue was formally acknowledged in the digital channel, versus 62% in personal channels. Twenty-three percent said they were kept informed about efforts to resolve the issue (whereas 49% who were served personally said the same). Nearly half said their issue was resolved in a satisfactory manner, as opposed to 68% in personal channels.

"If you call a bank and say you have a problem and somebody helps you with it or says they're working on it, it's a formal acknowledgment that the issue happened," said Nicole Sturgill, research director at CEB TowerGroup. "You can't get that in the digital channel."

A customer that tries to change her address in a mobile app, for instance, rarely gets acknowledgement of a submitted change, nor when it will be officially made, according to Sturgill.

"I like the [USAA] app update because they are making it easier for members to get better service and contextual assistance without necessarily having to make a call, and certainly without having to physically interact with the bank," said Bradley Leimer, who leads digital strategy for Mechanics Bank in Richmond, Calif.

The app's ability to learn from log-in, transactional and other behaviors will help it provide more sophisticated services such as advice on home buying or investments, he said.

Eventually, USAA wants to bring IBM's Watson technology into its app, to bring a broader base of data and documents to bear in answering customer questions. In July, USAA began making Watson available to members for questions about leaving military duty.

"We're trying to understand how we can use Watson to handle more generalized queries where there might be four different answers and we're trying to come up with the best possible answer," said Neff Hudson, emerging channels executive at USAA. "One thing Watson is good at is combing through unstructured data and developing, based on interactions with people, the best answer based on your personal circumstances or people like you."

It could be the difference between USAA's Virtual Assistant answering 20,000 questions instead of the 2,000 it is prepared for today, he said.

The new release has added voice and text search to its mobile app.

"We haven't had search on our mobile apps," Hudson said. "You could argue whether or not we needed it in the early days; our apps were pretty simple. At this point, the app is action-packed with transactions and ways to do things like get advice and file a claim. The complexity of the app itself demanded that we start surfacing the capabilities in a different way."

If a search fails to turn up a satisfactory answer, members can tap to talk to a live agent in the contact center. The agent receives members' names and what they were doing in the app just before making the call.

Using voice over Internet protocol, USAA keeps the mobile banking session open during the phone conversation, so the customer service rep can send information to the customer inside the app. "You're not losing the session, you're not switching channels," Hudson said.

One problem this solves is something Hudson calls "leakage" — the number of digital sessions followed by a phone call within 30 minutes. "For the member and for us that's a bad thing because, obviously, they weren't able to accomplish what they were trying to from the digital channel — that's why they called you," he said.

The phone call also means USAA is paying for the use of two channels rather than one. "It's an expense savings every time we keep somebody in-channel." USAA has conducted about 56,000 such VOIP sessions so far.

USAA has also dedicated more staff to its automated answer base, so that as customers pose questions to the app using voice or text, a business team is poised to quickly add answers that do not yet exist in the knowledge base.

Members typically ask the Virtual Assistant basic questions about routing numbers, bill payments and funds transfers. More offbeat questions involve rental car locations, roadside help and proof of insurance. Members can obtain images of documents such as insurance ID cards and bank statements through the app.

Eighty percent of USAA's Android users are posing questions through texts, and 20% are using voice calls, according to a review of the first 14,000 transactions made using the new technology.

Among iPhone users, 30% use voice and 70% text. Speech tends to be used more in cars. "That seems to be the best-use case, when people are trying to keep their hands on the wheel and talk," Hudson said. "As an insurance company that's constantly worried about our members' welfare, we're not encouraging them to text and drive."

About 10% of the time, Virtual Assistant users are posing more challenging demands such as "pay my electric bill on Tuesday." Such requests are difficult for a computer to answer because it has to understand which account the member is referring to, what "next Tuesday" means and how to map those together into an actual transaction, Hudson said.

This app, along with most others, still has room to improve.

"We think of this as a journey," Hudson said. "We're really excited about the potential, but we also are committed to making it better, get it live and continuously improve it."

Forrester Research Analyst Peter Wannemacher is impressed with the concept of USAA's Virtual Assistant. "It's a mobile banking innovation that aligns well with customers' needs — get answers and conveniently accomplish tasks — and banks' business objectives — offer great experiences and engage customers through lower-cost channels," he said. "But so far, the feature itself leaves something to be desired."

In tests, Wannemacher's team asked USAA's Virtual Assistant "What is my balance?" using the voice-recognition option and were steered to the right content. "But searching for 'alerts' yielded absolutely no results or help," he said. "In addition, the user must be logged in to use the Virtual Assistant. While I understand why USAA made this decision, I believe a better choice would be to force users to log in only when they are trying to access secure content or functionality. So overall I think Virtual Assistant is a brilliant innovation, but one that will need to be tweaked to really shine."

Leimer shared that view but overall is a fan. "The app's voice recognition is getting better with each update and it's likely to be the app to beat for some time," he said. "My hat's off to them."