Voice Is the Next UI

FinovateSpring was a hotbed of future-looking technology. We spoke to Theo Lau, Innovator Technologist and Connector, Unconventional Ventures about why she thinks voice is the next UI.

Although voice may not a solution for all situations, there is no denying that the momentum and interest for voice technology is growing. In the Q3 2017 earnings report, Amazon disclosed that it has sold “tens of millions of Echo units” since the first release in 2015. According to “The Rise of Voice” report by Invoca, the voice opportunity is predicted to be worth more than $18 billion by 2023. Consumers have been using voice assistants from seeking information to playing music and shopping. Accessibility, convenience, and simplicity are some of the main reasons behind the user adoption. For those who cannot read or who may have trouble navigating the menu options on an app or website, ability to speak to a device offers a more intuitive option to obtain real-time information. Voice technology is also life-impacting for those suffering from isolation/loneliness. In all, it has the potential to become a more inclusive technology that can appeal to a board audience and serve a wide purpose.

Recognizing the potential and appeal, financial institutions such as Capital One, USAA, Bank of America, U.S. Bank, and Ally Financial have begun experimenting with various use cases. Applications thus far are still fairly rudimentary and focused on basic interactions such as checking balance, paying bill, and tracking spending.

Though voice banking is still at its infancy, the industry is quite bullish on its future. Capgemini predicts that 3 years from now, 40 percent of consumers will use voice assistants rather than website or app, and 31 percent will use a voice device instead of visiting a store or branch. Separately, Medici forecasts that approximately 1.83 billion customers will be using voice assistants by 2021. Financial institutions should leverage insights harnessed from these interactions to adapt the conversation to reflect their brand identity and user’s profile. As suggested by Mark Taylor from Capgemini: “A brand today is an image, a set of colors, something you see on TV, on a website or in a store. With a voice channel, you see nothing, so a brand needs to have an audible image.”

While we might not be at the “promise land” yet where the virtual assistants become truly conversational, we have made great strides. As with any technology, empathy is key. AI and voice technology has the potential to make businesses more human, allowing banks to truly focus on their customers and become their true partners.

The time to start is now.

GDPR & Online Identity Proofing: An Inconvenient Truth

Coming into effect on May 25th, GDPR represents a significant sea change in terms of data privacy and data protection and designed to harmonize data privacy laws across Europe, to protect and empower all EU citizens data privacy and to reshape the way organizations across the region approach data privacy. This webinar provides actionable guidance on how to determine if your selected data processors are, in fact, fully compliant, how processes have been vetted and guiding you to ask the right questions in order to provide you a little peace of mind. Hearfrom Jumio, Fintrail and leading banks discuss the challenges – and opportunities – of GDPR within the digital identity sector.

AI Perks for Financial Services

Today’s customers demand that every experience provide immediate value on multiple levels. They require a competitive, friendly, quick and personalized user experience. They swear allegiance to no brand and are ready to jump ship to the first competitor that can offer them what they want, when they need it, and at the level of service they feel they deserve. Grant Thorton discuss the what this means in practical terms.

Tech giants, such as Amazon or Netflix, have set the bar high for intuitive personalized user experiences. Many industries, including financial services, are rethinking their own customer service approach to match this new standard and meet the expectations of modern consumers.

It is increasingly evident that the future success or failure of financial services institutions will hinge on their ability to provide personalized user experiences. Institutions must seize the rich customer data that they already possess in order to optimize customer experience and differentiate from their competition. To achieve this outcome, they must shift their mindset, from one focused on what they want to offer to the customer to one that prioritizes what creates immediate value for the customer. In addition, they must be willing to allocate the necessary resources to drive this goal. To this purpose, they can use artificial intelligence (AI) to achieve brand differentiation.

We recently explored issues and opportunities related to customer experience in a joint webinar with Finovate – Data overload? The impact of AI on the customer experience – moderated by David Head, managing director, Grant Thornton, with panelists Carrie Russell, executive strategic advisor, Finn.ai; Tariq Bakhari, CEO, Aggresant, Inc.; Dave Brodsky, VP digital innovation, Wells Fargo; and Katy Gibson, vice president of product applications, Envestnet | Yodlee.

Webinar panelists discussed various ways in which AI can help financial institutions solve their differentiation-through-customer-experience challenge. While currently AI is still in its infancy, the technology has the potential to transform customer experience by enhancing the interaction with the customer, rather than replacing humans with bots.

Paving the way for AI, many banks have implemented machine learning (ML) and natural language processing (NLP), primarily in their back office, to reduce labor costs and increase productivity. In the near future, AI can revolutionize retail banking and other financial service offerings by becoming an omnipotent artificial brain behind the scenes to improve customer interaction and increase personalization.

Here are several insights from the webinar, regarding applications of AI (and of other related technologies) that can create immediate value for the customer:

  1. Simplify processes. 
    Allow customers to execute simple transactions through user-friendly tools that leverage their data. In this way, they will see how access to their data creates direct, personal value.
  2. Offer customers personalization and optimization of their experience based on live data. 
    AI can replace annoying surveys through real-time data mining and by interacting with customers in real time, eliminating the need for the survey feedback loop. As a transformative technology, AI empowers automated financial assistants that provide updated, real-time customer interactions.
  3. Offer recommendations to motivate financial customer behavior.
    Savvy financial services institutions can partner with fintech companies to establish trusted relationships and create a financial wellness experience for their customers. This includes using customer data to help them achieve their short- and long-term goals. Institutions can create tools to help customers: 1) keep on top of day-to-day finances to answer immediate questions quickly (e.g. a financial calendar that can keep track of a customer’s account balance until payday and send bill payment reminders, etc.); and 2) think through long-term financial planning.
  4. Use AI or related technologies (e.g. ML, NLP) to enhance rather than replace human interaction.
    AI can enhance the customer experience even when it is not customer facing. For example, call centers can follow 2 paths for interaction with customers: 1) they can be fully automated and chatbots can simply answer calls; or 2) they can use a mix of human and artificial intelligence, where chatbots can aid human call center representatives interact with customers effectively. So far, the second has proved more effective than the first.Turnover and training are well known challenges for call centers. Customers can feel dissatisfied with a call center representative that does not have an answer to their query; the representative can feel that, despite his best effort, he does not have access to the right information to answer the query. AI can help with this issue, not necessarily by replacing representatives and human interaction, but rather by facilitating speed and access to information to help representatives create an outstanding customer experience. This can be particularly effective with new hires that have to get up to speed fast.
  5. Get the right channel. Go where the customer is likely to be.
    Customers expect personal experiences that make their lives easier. For example, customers spend most of their time on their cell phones and have started using virtual voice-enable assistance more and more. Financial institutions need to meet the customers where they are to offer convenience and ease of use. This insight should guide investment in new tools. Conversational assistants/virtual assistants can be used for day-to-day transactions and allow customers to explore additional products and services, policies and other information.
  6. Think through infrastructure challenges that limit the customer experience.
    When planning investments in AI tools, financial institutions need to think proactively about current infrastructure challenges and future infrastructure advances. Delivering differentiation through technology depends on the capacity of the technological infrastructure to support the tool. At the high end of the technology infrastructure spectrum, 5G capabilities may enable the Internet of things (IoT) new data sources. Are banks/financial institutions prepared to collect and leverage this new data? At the low end, many US citizens barely connect to broadband because of the areas in which they live. Are they untapped customers? What tools/channels work for them, as they are dependent on the limited availability of infrastructure now and in the future?

Financial services institutions are in an excellent position to build a solid technological foundation that will make use of new customer data in meaningful ways. At this critical point, the question remains how to evaluate and select the appropriate tools and how to find a manageable pace of adoption.

FinovateSpring: Cyber Security, Branch Banking, Partnerships, Financial Wellness, and More

Cyber security is finally at the frontline of conversations, but is it that easy?

Today we chatted with Sean Sposito, Security Analyst at Javelin Strategy, about the challenges that financial services companies have when dealing with cyber security. While awareness of cyber security has never been higher, Sposito asks whether that really equals an impenetrable safe wall?

Banks: who do you want to be when you grow up?

We ask John Waupsh, Chief Innovation Officer at Kasasa, where the branch stands? “Consumers, including millennials, still want to go into the branch and talk to somebody,” Waupsh says. But he counters with the fact that banks should be investing in a future of embedded banking.

FI + Core Vendor + Fintech: What it takes to make the partnership work

Tina Giorgio, President & CEO of ICBA Bancard, speaks with us live at FinovateSpring 2018 about the three Ts  – time, talent, and treasure –  that can guide community banks as they seek to adopt new technologies.

Financial wellness first: transforming the digital experience

“As a financial services industry, we have not yet been able to help a customer understand that the decisions that they make today impact their short and long-term goals,” says Tiffani Montez, Retail Banking Senior Analyst for Aite Group. Taking a new perspective on the digital experience, Montez addresses the key themes that can be facilitated by keeping financial wellness at the forefront: mobile experience, the role of the branch, and reinventing the checking account.

Security scars are key to innovation

“What’s your surface area and what are you defending?” is the first question you should be asking yourself when considering cyber security, according to Ben Johnson, CTO & Co-Founder, Obsidian Security. We speak to him live at FinovateSpring 2018 about the best practice and innovations in cyber security today.

“Banks can’t be everything for everyone”

We speak to Alex Jimenez, Vice President Senior Strategist, Zions Bancorporation about the key takeaways from the panels he participated in that addresses payments and platformization.

 

Are We Seeing the “Platformication” of Banking?

ALEX JIMENEZ_FinovateSpring 2018

The future [of banking] depends on the customer’s needs, says Alex Jimenez, Vice President Senior Strategist at Zions Bancorporation. Jimenez gives us a snapshot of his views on where the US banking industry is heading ahead of his session at FinovateSpring 2018 about “The platformification of banking, providing customers more choices“.

A couple of years ago, Ron Shevlin predicted that banking would move to become banking platforms “much like how Amazon is a platform in retail.” Usually, it takes a few years for banking executives to latch on to Ron’s ideas.  It’s no surprise then that the idea peppers many strategy documents throughout the US banking industry today.

There are some early signs that the US banking industry is moving towards this future state. While we can point to open banking and PSD2 in Europe, there are significant differences in the regulatory environment between markets that makes such a jump merely speculative. Instead, I point to two separate trends: banks publicly publishing their APIs, and early examples of banking platforms.

Publicly publishing APIs isn’t a new practice, but it is in banking. Without getting into the possible impact of the recent Facebook API controversy, some of the more forward-looking banks in the US have public pages where developers can access their APIs. This practice doesn’t constitute open banking, but a permissioned extension to the banks’ model. A developer applies for inclusion, downloads the API standards, builds experiences around the APIs, tests it in a sandbox, applies for certification, and then deploys with the bank. Some of the US banks that have published their APIs are doing it because they are international, like Citi, Bank of America, Wells Fargo, and Chase. However, there are others that have some international business but are focusing on building a US platform, like CapitalOne and Silicon Valley Bank.

Beyond the banks, companies that form the technology backbone of many community banks and credit unions have also begun to publish their APIs. FIS offers CodeConnect “a centralized fintech hub that gives developers access to the FIS product catalog in one central marketplace.” Similarly, Fiserv offers their DNAappstore “a collaborative community and online marketplace for trying, buying and selling custom DNAapps that enhance and extend the robust functionality of” their DNA® account processing platform.

Further, APIs are a topic of discussion for most bank CIOs, and increasingly throughout the executive suite.

Early adopter US banks and fintech firms have begun to build out partnerships that extend their initial capabilities.  For example, Radius Bank have extended their usual community banking offerings, as they pivot to be a true digital bank, to include services such as Aspiration’s “pay as you wish” checking accounts, Mantl’s account opening, and Prosper’s online personal loans.  Recently, PayPal announced an extension into traditional banking services through partnerships with “a Delaware bank handles debit cards, a bank in Georgia deposits checks that users take pictures of, and banks in Utah offer loans to customers and small businesses.” Other smaller fintech firms, like MoneyLion, have also announced entry into traditional banking products through similar partnerships with banks.

We will see banking-as-a-platform as a regular banking model alongside the laggards in the industry with a traditional model. Ultimately, where the future lies will depend on what resonates with banking customers.

How To Move Nimbly from Fintech Idea to Full Customer Availability

https://finance.knect365.com/finovatespring/speakers/jim-van-dykeHow do traditional financial services firms successfully innovate to move nimbly from fintech idea to full customer availability? Ahead of speaking at FinovateSpring 2018, Jim Van Dyke, Founder & CEO at Futurion reveals his truths around the idea of ‘successful innovation.’

Last year, I interviewed leaders from banks, credit unions, and other FIs (ranging from the nation’s largest to smallest) to reveal specific speed bumps, potholes and pitfalls amidst rare fast stretches of smooth pavement. These leaders all know that without finding a faster and better way to innovate quickly on the path toward fulfillment of customer, competitive and market opportunities, organizations will quickly become irrelevant. This research report asked 30 leaders the same three questions about their largest innovation processes: how they work, how long they take, and what they’ve learned along the way.

At FinovateSpring, the ‘Innovator Insight: Speeding up the time to market for new products and services‘ panel brings actual interviewee respondents on-stage to Finovate to discuss their best practices for getting key fintech innovations to market faster and better.  Here are a few highlights of what we’ll be discussing in our fast-paced and no-holds-barred panel:

  • Project durations vary widely­—ranging from a 6 months to five years—with the most common response being 21 months and the average being 24. Specific project management methodologies make all the difference.
  • Innovation practices at financial services firms appear to be significantly less mature and productive than those at software firms, representing risk that the latter will outmaneuver the former. Financial sector firms’ project stages vary dramatically among all respondents and had very inconsistent mention of lean methodologies (such as prototyping or customer journey maps).
  • Some traditional financial sector firms only allow innovation ideas to originate from top executives. At all such firms, demonstrated respondent confidence and morale was markedly lower (when compared to all other interviewees).
  • There was a strong observed (i.e. generally not explicitly stated) correlation between an organization’s current ability to rapidly execute and a respondent’s demonstrated morale and level of engagement. In turn, the author predicts that a likely by-product of the ability to rapidly innovate with high alignment to customer needs might be the benefit of a stronger ability to attract, motivate, and retain top quality talent in the competitive fintech labor market.
  • Many top innovations are viewed as neither discretionary nor of direct contribution to customer value, but are ultimately viewed as no less important than others. For example, many cited efforts to adopt an API framework or particular vendor relationships that only make future areas of direct customer value more possible. In addition, several smaller FI executives lamented actions on the part of their technology vendors that they viewed as standing in the way of their ability to release new innovations to market.
  • Risk or security-focused team members are unexpectedly incredibly valuable in ideation or problem-solving at several FI shops, possibly because they are required, on an ongoing basis, to creatively address dynamic and formidable problems.

Join Van Dyke at FinovateSpring 2018, May 8 through 11, 2018 at the Santa Clara Convention Center in California. Find out more >>

e-Magazine: Getting Practical With the Fintech Hype

Finovate has been perfecting fintech conferences and news content since 2007. This week, we’re thrilled to introduce our quarterly e-book.

In this edition, we’re pleased to share actionable insight about Open Banking, crafting a digital strategy, and low-hanging fruit in AI. We also take a look at the singular trend that dominated presentations across FinovateEurope and FinovateSpring. Finally, we celebrate International Women’s Day with some of fintech’s leading ladies.

Releasing our e-magazine series is, more than anything, humbling. It’s another reminder that we wouldn’t be here without conference attendees, blog readers, and fintech Tweeters. So thanks for your patronage as we continue our endeavor of supporting the fintech industry.

Enjoy!

Download the e-Magazine here >>

Is Voice the Next UI?

As the titans dominate the smart speaker landscape, Theodora (Theo) Lau — Innovator Technologist and Connector at Unconventional Ventures — discusses what the future might look like for fintech, financial institutions and brands. Join Theo and other panelists for the session titled “Is the future digital interface voice activated?” at the upcoming FinovateSpring in Santa Clara, May 8 through 11, 2018.

Advances in voice recognition have fueled substantial growth in virtual assistants and their applications the past few years. According to the latest “Smart Speaker Consumer Adoption Report” released by Voicebot.ai in March 2018, “19.7% of U.S. adults have access to smart speakers today. That is up from less than 1% of the population just two years ago.” Unsurprisingly, Amazon dominates the market share at 71.9%, with Google running at a distant second at 18.4%. With consumers becoming more comfortable with the devices, nearly two-thirds of device owners now use them daily and over three-quarters at least weekly. According to Invoca’s study titled “The Rise of Voice,” it is estimated that the voice opportunity will be worth $18 billion by 2023. Voice has become an important new battleground for brands as they seek to differentiate themselves. It is no wonder that financial institutions are rushing to experiment with the new prospect: Bank of America, Capital One, Royal Bank of Canada (RBC), USAA, U.S. Bank, and Charles Schwab are amongst the many that have announced initiatives leveraging voice technology.

Interestingly, unlike most new digital technologies, users of these virtual assistants are not dominated by just the youngest demographic, but rather, those aged between 33 and 45. And according to Capgemini, 28% of users of voice assistants have already been adopting them for making payments and sending money. It is also predicted that, three years from now, 31% of consumers will use voice assistants instead of visiting a bank branch. Saturday Night Live joined in the hype with a skit on “Silver Echo,” re-imaging how an Echo-like device designed for older adults would behave.

Finovate_Twitter Chat_Theodora (Theo) Lau — Innovator Technologist and Connector at Unconventional Ventures

So far, the use cases in financial services have been limited to more basic interactions such as checking account balance, paying bills, and monitoring spending. The next frontier will be to provide more personalized solutions, help consumers make the right financial decisions, and guide them seamlessly between different interfaces (voice/screen). Security must be the top focus for institutions looking to embark on their voice strategy. AI needs to be advanced enough to understand the context and nuances of human dialogues. Most of the virtual assistants still struggle to understand different accents, for example. Given the diversity of our population, this must be resolved to avoid frustrating first time users and for the technology to gain wider appeal.

While we are not (yet) at the stage where we can carry out meaningful conversations with our new digital companions, I believe the potential is there. Talking is also much more liberating when you are no longer constrained by the menu choices in front of you.

What can be done is up to us. Let’s dare to dream.

THEODORA (THEO) LAU_FinovateSpring_Voice Technology

Does Your Loan Help You Save For Retirement? It Should.

John Waupsh is Chief Innovation Officer of Kasasa, an award-winning financial technology and marketing technology provider. Ahead of his session at FinovateSpring where John will talk about the role of the branch in a digital world, he discusses how loans should help people save for retirement.

Building retirement savings is not a strong suit for many Americans. According to a 2018 survey by GoBankingRates, more than 40 percent of Americans have less than $10,000 saved for retirement, including the 14 percent with $0 saved for retirement. Financial planning experts frequently recommend having at least eight times your salary saved for your post-career future, and with life expectancy continuing to increase, the minimal recommend savings will likely rise even higher.

It’s so easy for consumers to put off saving for retirement. Their last day on the job seems so far away, and bearing today’s financial burdens like bills and loan payments often means restricting, reducing or simply never beginning to save for tomorrow.

But there’s a better way.

Historically, consumers have often felt like they must jump through three hoops before starting to save for retirement or increasing investments in their future. First, they must be meeting their primary needs like paying power bills and buying groceries. Second, many want to build cushions of both emergency and “fun money,” in case the need arises to pay for a last-minute home repair, an unforeseen medical expense or even a spontaneous weekend vacation. Last, many want to pay off their debt before beginning to save or increasing retirement contributions. These second and third hoops are where many consumers are missing out.

Despite the fact that most Americans want to pay off their loans faster to increase retirement savings, those that meet their primary needs rarely pay extra toward their monthly loan payments because it’s money they can never get back if they need or want it later.

That’s changing with the Kasasa Loan. It is the only loan product that can serve as a tool for building savings through the ability to take-back extra payments.

A loan that allows borrowers to pay ahead to reduce debt, but take that extra back if they need it, eliminates the fear of parting with ‘extra money,’ enabling the consumer to make better financial decisions like paying down debt faster. And when debt is paid down sooner, consumers are freed up to boost retirement savings earlier, when it really counts due to the power of compound interest. Consumers like this option. In fact, according to a recent study, nine out of ten consumers prefer a loan with take-back functionality over comparably priced loans, and 98 percent of consumers say they would refinance existing debt at the same rate to have the flexibility of taking back their extra payments.

In addition to flexibility, visual transparency is something that the lending world has been lacking until now. The innovation of sleek, mobile-friendly dashboards in personal financial management (PFM) apps have long helped consumers budget and visually understand their money. Consumers should now expect the same features from a loan. Having the ability to actually see the impact of extra payments enables borrowers to comprehend better the impact of paying down their loan faster and therefore, make smarter financial decisions for their future.

As Baby Boomers, Gen Xers, Millennials and even Generation Z inch closer to retirement, there is an opportunity for these consumers to make better borrowing decisions by choosing a loan that is extremely flexible, easy to work with, and visually transparent. In the past, taking out a loan has prevented consumers from saving for their future. Now, it is possible for them to borrow in a way that not only doesn’t hurt their retirement funds but actually helps them save.

For more information on Kasasa, visit www.kasasa.com, or visit them on Twitter @Kasasa, @KasasaNews, Facebook, or LinkedIn.