The emergence of digital challengers has changed the banking landscape in the UK and Europe. With their focus on customer experience and flexibility, these new brands have grown quickly and are forcing established players to up their game.
Voice has been area of innovation in the world of consumer technology, with devices that support Amazon’s Alexa and Google Assistant now a common sight in many homes. Being able to control heating, lighting and household appliances, as well as compile to do lists and listen to music, with the power of the voice, has opened a whole new world of convenience.
It therefore seems an ideal technology for financial services to tap into.
Traditional players HSBC and Barclays already make use of voice recognition as a means to verify identify on their telephone banking services. These systems confirm identity by recognising a customer’s unique formation of words.
One of the challenger banks, Atom, offers voice and facial recognition security. Atom’s approach is to register customer identity credentials using face, voice and passcode, then give them the option of using their voice to log into the app. If it’s for a high-value transaction, more identify checks may be needed.
While these developments are noteworthy, they only use voice as a means to verify identify.
It’s actually more traditional banks that have gone further with voice recognition. Santander has offered voice-activated payments via its smartphone app for several years, along with the ability to request recent transactions and report a stolen card, by talking to their phone.
More recently, NatWest said it is trialling Google Assistant. A pilot of 500 customers is testing a system that lets them perform basic functions, such as asking for their current balance or latest and pending transactions with their voice. This could be extended to transfers and bill payments in the future.
NatWest is claiming voice could represent the type of step change that mobile banking has brought in recent years. One of the major areas in which it could help, the bank claims, is for people with disabilities that make it difficult for them to use a screen or keyboard.
However, Starling Bank didn’t take voice recognition technology any further after experimenting with Google Assistant and Amazon Alexa in 2017, with one senior developer describing voice-activated banking as gimmicky and not adding anything to the client experience.
Clearly, privacy and security concerns are making banks and customers cautious about using voice recognition in conjunction with financial services. As well as ways accessing financial information, there also remains the issue of other people overhearing information about bank accounts via the smart speaker.
NatWest addresses this by requiring users to read two digits from a special code generated every time they use Google Assistant, meaning the account balance will only be announced if explicitly asked for. However, this reduces the convenience offered by other voice-activated services. In addition, the smart speaker will only read out an account balance if explicitly asked to do so.
While there are mixed views about merits of voice-activated banking, some banks clearly feel it’s worth pursuing. Ultimately, it will come down to which banks work out the best ways to maintain privacy and security, without sacrificing convenience. And while challenger banks have prospered through innovation, right now, it looks like traditional banks are closer to finding the answer.