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Voice is the Future of Banking

My kids: “Hey Google please tell a joke”

Google: “You may like this one! Humpty Dumpty liked Autumn, why? Because he had a great fall!”

My kids: “That's funny! Can you tell another one?”

Google: “How did the frog burn his tongue? Because he ate a firefly!”

So that’s how my children spent the next two hours on a lazy Sunday afternoon with our new friend, Google Home.

Now imagine this...

“Hey Google (or Siri for the Apple fans or Alexa for Amazon converts ) - I want a credit card that limits my average monthly spend to $2,000 but allows me a higher limit if I want to spend on special occasions. I also want the card that maximizes my points for dining and online purchases".

Voice Banking, the Dialog-based Application Form

Now visualize this applied to mortgages, car loans, superannuation and more. The idea of reducing the friction between customer need and targeted product offering is nothing new, but clearly the thought of a dialog-based interaction replacing the traditional application form is quite appealing.

The speed of information, along with the richness of the data is a new opportunity that will be tantalizing to the first bank that manages to make it a reality. Imagine the wealth of information provided beyond the primary application data such as the sentiments the consumer may be sharing in their dialog.

Importantly, the consumer will not expect a list of ten possible products but a tailored selection of up to a maximum of three options if they are looking to make a selection, right there and then. Of course on the back-end the bank will need to have a large number of variants to deliver a tailored experience for consumers. Banks have already started catering to specific product needs, but I believe this can will only grow in complexity as voice banking takes off.

So now, are you ready to respond to my application form for a loan in real-time?

The above scenario for voice banking may play out in following possible ways.

  • Existing Google, Siri or Alexa are the ‘acquirers’ of these applications from the end customer
  • Customers talk through a bank’s chatbots made available via a Google Home device or maybe a website or mobile apps voice interface
  • Via aggregators who provide neutral advice to consumers by providing multiple choices through different banks
  • Any or all of above

The Last Mile Problem

Before we explore the above scenario further, let's go back in history and revisit the old problem of ‘last mile’ delivery. Wikipedia defines it as: “The last mile or last kilometer is a colloquial phrase widely used in the telecommunications, cable television and internet industries to refer to the final leg of the telecommunications networks that deliver telecommunication services to retail end-users (customers). More specifically, the last mile refers to the portion of the telecommunications network chain that physically reaches the end-user's premises”

Typically the problem is related to speed bottlenecks, but also has cost implications where in some countries the end customer is asked to pay for the last mile. (If you are too young to recall this I am jealous!)

Fast-forward to the digital and wireless present. Wireless mobile technology has largely solved the last mile issue and the customer now has multiple channels to initiate a dialog with a bank. In some ways it has become what I would refer as an “inverse last mile” issue, where banks are investing heavily in their last mile (or first mile for those who are on customer centric bandwagon). Banks are investing heavily in this front end because everyone's doing it, it’s cool, and most importantly it's visible! But what about the uncool backend and support infrastructure needed to respond to these ever-growing channels? Are banks ready to respond to all these new ‘consumers’/ ‘channels’ such as voice banking?

The Uncool Backend

Coming back to our above four scenarios. Which ones will be taken up, will very much depend on the agility of the banks. It’s important that decision management is central to these new digital banking initiatives.

The following must be considered when banks are looking to upgrade their decision management capabilities.

  • Omnichannel - ability to consume and respond in real-time to first and third party channels in a standard manner. OpenAPI is an initiative that recognizes this need.
  • Data - with AI and machine learning, large sets of data including traditional and alternative data, sentimental and text analysis must now be made decision-ready. It's important not only to consider easy ingestion of such data in decision management but also how to add new sources of data with minimal effort.
  • Analytics - Not only our ability to create traditional and alternative models to get insights from all the data we gather; but also our ability to test and learn from them, monitor them and explain them to regulators and customers.
  • Decision engine - The brain where all the information flows in. And much like the human brain which has the left-side and right-side, the engine should have the ability to respond quickly and logically (left side brain) using analytics and strategies but also cater to creativity (right side brain) where business users can try various potential scenarios and strategies in an offline mode. The decision engine’s ability to respond to a risk manager’s creativity on one hand while limiting mistakes on the other is the key to success here.
  • Customer Centricity - A highly used (or misused) phrase. I think institutions have definitely covered a lot of ground in past few years. However, the goal posts have shifted further with consumers demanding more and this will continue to define the new normal.

Endless possibilities

Google: “How are you liking your new house by the beach?”  

You: “Great! Though I think it is time for a renovation. That reminds me, how much could I borrow considering the house value and my cash in offset?”

Is your bank ready to respond to voice banking?

Dialogue-based banking driven by artificial intelligence is not science fiction – all the pieces are already here – we are just waiting for the first banks to innovate. Most institutions recognize the need to invest in digital banking and decision management infrastructure, but clearly it is important they evaluate their investment in such tools beyond traditional features. The future is already here and to make it a competitive advantage banks will need to innovate in decision management, analytics and artificial intelligence.

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