Voice-Activated Features Raise Stakes in Digital Banking

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A handful of banks are upgrading their apps with Siri-like "virtual assistants" that understand spoken questions, at a time when most institutions don't even let digital customers do typed keyword searches of their transaction data.

This week, for example, Ally Bank unveiled Ally Assist, which displays on the smartphone screen answers to texted or spoken queries about things like bill payment initiation, recent transactions or routing numbers. The feature also suggests what the customer might want to do next. Other banks offering virtual assistants include USAA, Tangerine in Canada and Garanti Bank in Turkey.

As a direct bank, Ally needs to be at the forefront of digital initiatives that meet customer needs rather than bankers' fancies, said Diane Morais, its president and chief executive. "We don't want to invest in capabilities that make us feel better," Morais said.

The bank's digital enhancement, which uses technology from Personetics, underscores the mounting importance for financial institutions to rethink navigation features, even in an industry known for sticky customer relationships.

"Customers control the conversation on how they do business," said Kate Leggett, vice president and principal analyst at Forrester Research. "If [customers] aren't happy with engagement they are getting, they will leave you."

The latest banking developments borrow from other industries setting the digital tone with consumers.

"What's a rarity in financial services — unicorn and all of it — is not so rare or unusual in any other sector," said April Rudin, the founder of The Rudin Group, a wealth marketing firm. "My car is voice-activated.... Why wouldn't my bank be voice activated?"

Ally's Morais sees the recent update as a good add-on to improve the customer experience on a device consumers rely on. The Ally app also lets customers click to call a live agent.

The voice activation feature also reflects the market's gravitation to smaller and smaller computing devices.

"As new devices with limited or no visual interfaces come into play (like smartphones, wearables, etc), it becomes important to think differently about how to enable efficient interactions with those devices," Charaka Kithulegoda, the chief information officer at Tangerine, said by email to American Banker. "This often requires new input and output modalities to enable better/different navigation and do it in a way that is intuitive to the user — especially as more and more functionality is exposed through these interfaces/devices."

What demand Ally Assist will find among customers remains to be seen, so the bank will be watching to track the new navigation function in the weeks to come.

"It will be fascinating to watch what people are doing," said Morais.

Early Reports

USAA's virtual assistant, launched in March of 2013, now averages 20,000 interactions per week with most of those questions coming in the written form rather than asked out loud.

"People love text," said Neff Hudson, vice president of emerging channels at USAA. Hudson believes that has to do with how popular texting is and the reputation of voice's accuracy, which has been ridiculed by popular TV shows.

The irony, though, is voice recognition must be used for it to improve, he said.

Hudson can imagine a day when banking voice commands play a greater role as more devices like objects in the home and within the car get hooked into the Internet and to one another.

"You pick the right mode for the moment," he said. "People use what works for them."

It is important that virtual agents do not end up embarrassing their brands by stating the obvious, like the much-ridiculed, anthropomorphic cartoon paperclip who would tell Microsoft Office users things like "we see you're writing a document."

"We're trying to draw a fine line between being helpful and being Mr. Paperclip," said Hudson. "We all fear becoming Mr. Clippie."

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