Voice Banking: finding the right balance between security and convenience
Banks are trying to adapt to rapidly changing behaviors by integrating their services seamlessly into their customers’ daily lives, thus moving from product-oriented to customer-centric strategies. They must then leverage new and existing technologies to provide a seamless, consistent and tailored customer experience on any device.
Voice-activated experiences are already a world-class model of customer convenience, allowing anyone to benefit from a personal assistant – able to switch off lights when you’re already in bed, brew your coffee on-demand or even answer your existential questions.
But how can those digital assistants be used in financial services?
The question we should address first is: how could we exchange sensitive and confidential data through a channel that does not natively support secured authentication methods?
Identity management and control have always been one of the most important challenges faced by Financial Institutions: they must ensure the identity of their customers to protect their finances and guarantee bank secrecy while complying with strict KYC laws (Know-Your-Customer) combating fraud and money laundering.
Given the specific nature of voice-activated devices, many authentication methods seem irrelevant or overly constraining – especially for a use-case designed to simplify interactions with the bank. To reinforce security while reducing frictions, the end-user could already be offered different configurable security options when linking his account to such a device – like setting up an additional voice pin that could be required after a given period of inactivity.
For more complex or sensitive operations, a multi-modal authentication should be assessed to secure transactions by combining a voice pin with some additional security features (voice recognition, behavioral biometrics, multi-devices triangulation, etc.).
The privacy paradox
Broadly speaking, customers tend to quickly consider data collection as inappropriate or excessive while requiring contextual and tailored advices suiting their instant and exact needs. This is especially true in the banking industry, where financial institutions might benefit from their historic position of trusted financial services professional while being heavily pressurized and questioned about their data policy.
Voice could simply be considered as a new channel to process and distribute the exact same data as a mobile device or a computer, subject to the same duties and controls. Clearly communicated advantages combined with a transparent data policy enhance customers’ willingness to share more data – and more often – with their bank.
Maturity and usages
Beside privacy and security, the main factor hindering users’ adoption is the maturity of technology – highlighting the gap between customers’ expectations and reality.
Current technologies cannot provide customers with the human-like conversation they have been promised, leading them to the “Trough of Disillusionment” (cf: Gartner Hype Cycle). In addition, most people are still not familiar with this channel – existing use-cases are not groundbreaking enough to stimulate adoption.
Alternatively, Voice Banking is a key opportunity for banks to improve customer engagement, and in fine loyalty, through an intuitive and easy-to-use interface that will soon become more and more widespread in our everyday lives. Adoption will then directly be linked with the ability of banks to demonstrate the value of the use-cases they offer that must outweigh security concerns.
Toward “Banking as a Service”
Voice-controlled devices can simplify our everyday life by enabling more natural interactions with our direct, technology-filled environment, even though they have some way to go before delivering a truly integrated and seamless experience. Our reality is set to be reshaped by those new voice-activated experiences, ranging far beyond smart homes, smart watches and connected cars. Use-cases are flourishing in virtually every industry and are now spreading to financial and payment services.
In our recent thought leadership paper, Journey 2022, we discuss the questions being raised by consumers and society regarding certain technologies and how these may lead to, what we describe as, Digital Dilemmas. At the age of data and ultra-personalization, the challenge for financial institutions is to multiply data-points while ensuring security and privacy of the information, to ultimately deliver the tailored and contextual services that customers expect. While convenience no longer needs to be proven, security is the primary concern that comes to mind when referring to Voice Banking. The challenge for banks is thus to design valuable, customer-centric use cases using privacy-by-design technologies to build trust and loyalty.
Voice-activated devices can sometimes be perceived as invasive or non-appropriate for conducting banking operations, but Voice Banking is sketching out the early stages of a “Banking as a Service” era, where customers can benefit from on-demand services in a consistent and channel-agnostic manner.