Do you have a smart speaker at home? Do you use voice notes to send quick messages to friends and colleagues? If so, you’re part of a major trend toward voice-directed technology.
- Smart speakers like Alexa are in more than half of all American homes and by 2024, 75% of homes are predicted to have them.
- Globally, the number of digital voice devices will double from 4 billion to 8 billion by 2024.
- WhatsApp is now handling 7 billion voice notes per day.
These statistics show a big push toward voice-activated communication and transactions, including increased demand for voice banking. But is your brand on board?
What Exactly is Voice Banking?
At community banks and credit unions, banking executives are wondering whether voice banking is an opportunity for growth. It most definitely is, but perhaps you should start by thinking of voice banking as an opportunity to engage and connect with your customers/members.
Let’s take a step back and look at what voice banking is. Voice banking isn’t telephone banking. This isn’t “press 1 for yes, 2 for no” and it’s not talk-to-texting.
It’s fully “talk aloud” banking. It focuses on the transactional nature of the voice in conducting business.
People are using their voice-enabled devices to initiate purchases, make changes to their preferred services, and organize their financial lives. This includes using in-home smart speakers like Google Assistant and Amazon Alexa, plus voice services through smartphones like iPhone Siri.
The world is changing in terms of how we think about calling people. In fact "calling people” has changed dramatically and is falling out of favor. Now it’s more about making digital and voice-based connections.
Think of voice banking as another effective method of conducting digital business, like a new iteration of using email where answers should be instant. Keep in mind that young people in Generation Z have never experienced old-fashioned touch-tone calling. They don’t even know what it is! Everything has always been digital and voice-based for them.
Is Voice Banking the Next Big Thing?
Voice banking isn’t the next big thing, despite its recent status as a banking buzzword. It’s easy to hype up because it’s attached to big names like Google and Amazon, but it’s just another method of communication.
The most significant impact of voice banking is its contribution to the conversation. It supports the conversational approach to customer service where two people can use technology to facilitate a smooth back-and-forth that resolves a pressing issue.
Look at it this way: Siri came out in 2010.
If it was going to revolutionize banking, it would have happened already. What’s really happened is that tech like Siri is making it easier to speak conversationally as you communicate and search for new information.
People in what I call Generation C, or Generation COVID, don’t use their keyboards or fingers to search for information. They prefer to use their voice.
These young people and future bank customers just tell their smartphone or device what they need and the device finds it.
Where does your bank fit into their lives? This is the question you should be asking.
The impact is already obvious among adults. Google reports that 27% of the global population uses voice search on their mobile devices and that 41% of American adults use voice search at least once per day.
What are all these people searching for? An Adobe Analytics study found that they’re mostly voice searching for music, weather, information, and news. They also look up answers to fun questions, which we’ve all probably done, and search for services and directions.
Top 6 voice search types according to Adobe Analytics:
- Fun questions
- Online searches/services
Remember, these voice-directed searches are happening everywhere. At home, in the car, at work, while outside walking, and anywhere else where a speaker can take vocal input and generate an answer.
That’s why you shouldn’t think about voice banking the same way as you think about an ATM. The customer doesn’t have to find you in a specific location. Instead, they’re using their voice and a device to connect with you anywhere.
What Concerns Come With Voice Banking?
Some people have paranoia about these devices, which is similar to the paranoia about platforms like Facebook. Facebook denies that its platform is doing anything wrong, but we still wonder. We wonder about the devices gathering our data and conversations and using this information to serve ads.
What about a voice banking app?
There are concerns around privacy and data as we move forward into the future. It’s easy to move into tinfoil hat territory and go off the deep end into complete paranoia!
Here’s what we know about voice banking.
The majority of consumers are using voice banking to check transactional data, account balances, and their most recent transactions. There are also more advanced voice services that allow paying bills and moving money, but these are still transactional.
One of the greatest opportunities is for voice banking to work with AI to provide proactive guidance based on the individual’s situation, goals, and transactions. This is a key growth opportunity for banks and credit unions.
How Does Voice Banking Align With KYC in Banking?
The concept of knowing your customer (KYC) is fundamental to customer service in banking. It’s natural to wonder how voice banking dovetails with KYC.
KYC typically comes down to three things:
- Something you have, like a debit card.
- Something you know, like a password.
- Something you are, like your face, fingerprint, eyes, or voice.
The first two items in the list above have been used as bank identification for decades. Even early voice banking used touch-tone phones to authenticate you through a PIN or something similar.
Going forward, people will use smart speakers and other devices to facilitate new forms of identification. They might use their voice to identify themselves and/or their location, behavior, or other factors.
Can someone’s voice be replicated to log in? It’s possible, but this point of identification can be cross-referenced with other points, like a PIN or password. There’s also biometric verification at airports and other places, which is sometimes used along with fingerprint identification.
A FICO consumer digital banking study found that consumers are becoming more trusting of using physical and behavioral biometrics to secure their financial accounts. When it comes to banking customers, 78% would accept that their bank analyzes their behavioral biometrics.
Voice banking offers the opportunity to not only identify people through their voices but identify their needs. As they proceed with a transaction, you can ask, “How are you doing today?” and tailor their experience according to their emotions and desires.
Do Customers Consider Voice Banking Too Intrusive?
Data privacy is central to the adoption and use of voice banking. While people view voice as a convenient way to interact with their devices, they still worry about data privacy in banking.
Here’s the bottom line. It’s still too early to tell whether the mass audience will accept voice banking. Will there be critical mass adoption of this technology? We don’t know yet.
Up to this point, voice banking adoption has been slow and steady. But don’t let that fool you. There have been many other types of technology adoption that were slow and steady for 5 to 10 years, then exploded to become the norm.
It’s possible that voice banking will become the primary engagement channel, replacing traditional mobile apps. I predict that voice banking will hit a turning point between 2025 and 2030 when it truly begins to replace traditional mobile banking apps.
Is your financial brand in a position to succeed if this happens? It will be fun to come back and revisit this conversation in 2025 and 2030 to see how far we’ve come with voice banking.
This article was originally published on August 30, 2022. All content © 2023 by Digital Growth Institute and may not be reproduced by any means without permission.