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StrategyOct 25, 2018

Voice-Recognition Applications: Financial Services

Drew Allen, and Connor Huffman

Voice-recognition technologies are disrupting existing markets. From widespread smart speaker adoption (47.3 million U.S. adults own a voice-activated smart speaker) to impressive new use cases (Google’s demo at I/O 2018 of its assistant making a phone call to book a hairdresser appointment), voice technologies have reached a tipping point in terms of innovation. Whether these innovations take the form of customer experience improvements or business process optimization, the possibilities for voice are endless and not yet fully understood.

In this three-part series, we will analyze voice applications in three industries where we see the most growth: financial services, travel and hospitality, and retail. In this article, we will focus on current voice-enabled applications and potential future applications in the financial services industry.

Voice Technology in Financial Services

Financial technology disruptors are driving technological innovation across the financial services sector. In fact, North American banks alone spent nearly $20 billion in 2017 developing technologies to fend off smaller, tech-centric competitors. These investments have focused on improving the customer experience across all touchpoints, including the development of voice-enabled applications.

However, due to the sensitive nature of financial data, many institutions have been slow to adopt voice until the technology matures. For example, Michelle Moore, the head of digital banking at Bank of America, said, “[For] integration with Siri, Alexa, Google Home, Facebook—we’d like to let our customers bank where they want to bank, but it only can be done if it’s done soundly.” Though concerns like this persist, there are three specific areas within financial services where voice technology is already providing innovation: personal banking, “smart home”/Internet of Things (IoT), and insurance call center automation.

current applications of voice in financial services

Personal Banking

Account management is a component of the banking experience that has already been infiltrated by voice. For example, the Capitol One Alexa skill lets users check account balances, pay credit card bills, analyze spending in different categories, and even make account transfers. While there are certainly challenges to using voice for banking (e.g., security, identifying use cases, etc.), early-mover banks view these applications as a way to provide customers with an easier way to bank. Instead of an app from their phone, customers can simply say what they want to do, without lifting a finger.

Why It Matters: Providing Timely, Actionable Information

81% of consumers use mobile banking apps at least nine days out of each month. With near full adoption of mobile banking, voice applications are the next frontier for greater convenience, speed, and financial insights.

“Smart Home” / IoT

The increased adoption of smart home devices like Amazon Alexa and Google Home has laid the foundation for voice-enabled, automated payments in the home. This market continues to grow, as smart speakers are projected to be installed in 55% of U.S. households by 2022. Mastercard and Samsung, as well as Amazon and LG, have teamed up to allow customers to order groceries by voice to restock their smart fridges and securely pay by voice.  Whether for repeat purchases (e.g., basic food items, cleaning supplies, etc.) or specialty items, financial institutions should look for ways to provide seamless payment processing in the smart home of the future.

Why It Matters: Personalizing the Customer Experience

Consumers are moving toward a “conversational economy,” where the number of businesses using voice technology is expected to triple over the next 12 months. Just as mobile technology completely changed the way we interact, voice technology has huge disruption potential, especially in the home where smart speakers have already seen widespread adoption.

Insurance Call Center Automation

Automating call center operations through voice-enabled automation provides a massive cost-cutting opportunity for insurance companies. Customer service employees can avoid low-value, repetitive tasks (i.e., post-call documentation) and focus on more impactful functions. From a security perspective, voice recognition can authenticate the human voice, bypassing the need for password sharing over the phone. Insurance companies are also using sentiment analysis to identify certain customer traits and needs based on the emotion and tone in the customer’s voice. These types of improvements in voice tech not only offer cost reduction but also introduce game-changing customer experience innovations.

Why It Matters: Driving Operational Efficiency

Assistance from voice-enabled call center robots can reduce time spent on tasks such as documentation and basic insurance claims processing by up to 80%. Cost savings from these types of process improvements allow insurance companies to pass savings onto the customer.

emerging applications of voice in financial services

Omnichannel Virtual Assistants

While platform-specific applications are getting headlines today, bank executives envision a future where their own omnichannel, branded assistants lead the banking customer experience. These omnichannel assistants could do everything from processing mortgage applications to offering financial advice in real time. There are several challenges preventing banks from owning the end-to-end voice solution through their own AI-assistant (integrations across financial institutions, regulatory concerns, etc.), but a future where each major bank has its own voice assistant that works across all platforms and integrates with all accounts is enticing to both the consumer and the banks themselves.

Why It Matters: Delivering Consistent Cross-Channel Experience

As it currently stands, only a handful of voice technology platforms exist in the market. The first major bank to create its own voice assistant that is accurate and dependable will have first-mover advantage in a space that is currently nonexistent.

Brokerage and Automated Investment Advice

Existing voice apps from brokerage firms like TD Ameritrade and Ally Bank allow users to perform informational tasks (e.g., accessing on-demand market information, news and events, stock quotes, and sector information.) As voice technology matures, firms will be able to use voice assistants to automate the delivery of financial planning advice, progress to investment goals, liquidity management optimization, portfolio-rebalancing events, investment opportunities, and more.

Why It Matters: Changing Where Money Is Invested

Over the next 20 to 30 years, $30 trillion of wealth will be transferred to millennial investors that expect their advisors to be tech savvy. Voice-based assistants, offering personalized investment options powered by artificial intelligence, fundamentally change the way investors can interact with brokerage firms and money managers.

In-Car Payments

Global demand for autonomous vehicles could grow to as much as 33 million units annually by 2040, according to market researchers IHS Markit. As cars become increasingly autonomous, a brand-new customer segment will emerge with ample time to browse and buy goods—commuters. Auto companies, like Mercedes and Volkswagen, are working with financial technology companies to cater to this new future of in-car customers.

Why It Matters: Meeting Customers Where They Are

The average American spends nearly 300 hours driving each year. As these previously occupied hours are freed up thanks to self-driving cars, financial services firms must consider new ways to meet customers’ needs during this newly uninterrupted timespan.

credera experience with voice technology

Interested in learning more about how to implement cutting-edge voice applications? Credera’s ecommerce, digital strategy, and IoT service offerings can work alongside your company to define and implement a voice strategy for your financial services business. Contact Credera if you would like to learn more.