This is a guest post written by Shannon Flynn, managing editor at ReHack.com.

Voice recognition technology is experiencing something of a golden age right now. You can control virtually anything with your voice now, from your lights to your TV to your phone. As these technologies keep improving, their applications in banking grow more promising.

Voice tech encompasses a range of technologies that involve recognizing and responding to users’ voices. The potential for these services in the financial industry is immense. You could use your voice to log into your bank, make withdrawals or ask for financial advice.

The advantages of voice tech for banks are impressive, but there are still some roadblocks ahead. Here’s a closer look at three benefits and three drawbacks of the technology.

Benefits

Roughly 111.8 million Americans use voice assistants at least monthly. That’s more than a third of all internet users in the country. The American public is already comfortable with these technologies, so bringing them to banking is a natural next step.

Banks shouldn’t adopt voice tech just because people would use it. Thankfully, the technology has benefits beyond high adoption rates. Here are three of the most significant.

1. Streamlined Banking

Think of how easy voice assistants like Alexa and Google Assistant make routine tasks. You can check the weather, read your messages and hear the news without lifting a finger. Banks can bring those same benefits to their user experience by integrating voice technology into their apps.

Users could make a deposit or withdrawal by merely asking their phones to do so. Mobile banking allows people to perform routine actions in less than three minutes on average. Voice tech could shorten that to a few seconds since users wouldn’t have to press any buttons.

2. Increased Accessibility

Mobile apps made banking more accessible than ever, but the industry can still improve. You still need to have full function of your fingers to work these apps, which can be a barrier to some users. Voice controls can allow more people to experience the convenience of banking apps.

VOIP will also gain some next-gen improvements in the next few years due to 5G. For instance, more banks may achieve faster, unified communication with the help of voice-to-text functionality and faster networks. With the VoIP market gaining $35 billion by 2025, we will most likely see additional innovation for these communication systems.

Voice tech gives users more options, which makes banking services more appealing to consumers and businesses alike.

3. Biometric Security

Voice commands aren’t the only application of voice tech in banking. Banks could also use this technology to as another layer of biometric security. Since voice assistants can differentiate between voices, they can use your voice to verify your identity.

Unlike with passwords and PINs, you can’t steal biometrics. This security advantage is why fingerprints and facial recognition have surpassed passwords, and voice recognition adds another layer of security. With all of these options, banks could offer biometric multi-factor authentication.  

Drawbacks

Despite these advantages, there are still some downsides to voice tech in banking. As much as these technologies have improved, they’re still relatively new and far from perfect. As such, there are a few risks that come with their adoption.

These disadvantages will likely fade as voice technologies improve. At the moment, though, they may dissuade some users from using voice services, making them less profitable for banks. Here are three of the most prominent of these drawbacks.

1. Privacy Concerns

Voice technology may increase security, but it also raises questions about privacy among some users. According to a Microsoft report, 41% of voice users are concerned about issues like passive listening. People may not use banks’ voice tech out of fear that someone may be listening.

Even if users don’t interact with voice recognition features, they may turn away because of them. People may worry that banking apps always listen to them, even while they’re not using voice features. If banks can’t assure people that their privacy is safe, these features could repel users.

2. Faulty Voice Recognition

There are still some lingering concerns about how accurate voice recognition technologies are. A 2017 study found it takes just two years for your voice to change enough that these systems won’t recognize it. Recognition errors could lock people out of their bank accounts, causing unneeded complications.

In fact, foreign language barriers don’t just exist between humans. When you’re dealing with finances, any translations errors could be costly. If your system misunderstands your voice commands, it could make unwanted transfers or deposits. Voice recognition has to be almost perfect for banks to use it extensively.

3. Regulatory Complications

Any financial institution has to comply with strict regulations, and voice tech could be an issue here. Right now, there aren’t any standards for how banks can or should use this technology. The legal ambiguity could cause banks to run into some complications while using these services.

Finding out how voice tech fits into existing regulations could be a headache. Working through these gray areas could be more trouble than it’s worth to many institutions.

Voice Tech Is Promising but Imperfect

The efficiency and security of voice technology is enticing for financial institutions. Still, many banks may avoid the technology right now due to its current drawbacks. More firms will embrace it as the technology improves, but that could take a few years.

Voice tech today is far from perfect, but it does have potential. With further advancement, it could revolutionize digital banking.

Shannon Flynn is a technology and culture writer with two plus years of experience writing about consumer trends and tech news.

---

Photo by Mason Kimbarovsky on Unsplash

The following is a blog post by mortgagetech veteran Caleb Skinner.

This year’s historically low interest rates are creating rare opportunities for homebuyers and mortgage refinance applicants — and, by extension, for the mortgage industry.

Unprecedented as the present economic situation is, though, it’s not unexpected. Indeed, it’s already old news.

What’s more interesting to real estate professionals, financial professionals, and fintech executives whose livelihoods depend on a vibrant real estate lending industry is how that industry looks two, three, or four business cycles out from the present.

Like It or Not, Big Changes Are Coming

Comforting as it is to imagine that business will continue as usual through the coming decade, all available evidence suggests that won’t happen. We need to gear up now for years of potentially wrenching change and prepare for a mortgage industry that, come 2030, bears little resemblance to today.

Here are five ways that lending will dramatically change in the next 10 years.

1. (Virtually) touch-free origination

“Disruptive” originators like Quicken Loans’ Rocket Mortgage combine slick marketing with legitimate process improvements to insinuate that the mortgage application process of today is radically different than 15 years ago. Today’s buyers and refinancers shuffle less paper and enjoy a far better digital user experience. Still, the basic, labor-intensive workflow is about the same.

That’s not likely to be the case in 2030. We already see the contours of a (virtually) touch-free origination process that requires little if any person-to-person interaction. For example, platforms like Mortgage Cadence offer consolidated digital lending platforms for lending professionals. Meanwhile, “hybrid close” suites like SimpleNexus and automated borrower support tools like Capacity facilitate borrower self-service and reduce lender workloads.

For lenders, this makes for leaner, more productive origination; for applicants, a dramatic reduction in time, effort, and awkward phone calls.

2. Appraisal as afterthought

For most lenders in most markets and submarkets, in-person appraisal is already strictly optional. Experts can easily compare comps and take the market’s temperature from afar.

If the early success of AI-powered valuation tools like Clear Capital holds, those experts won’t have much to do by 2030. That might be a good thing. Human appraisers bring their blind spots and built-in biases to their work, potentially putting their employers on the wrong side of borrower protection laws like the Fair Housing Act.

3. In-person close: strictly optional

This is the year remote closings went mainstream. In the short term, the in-person close is likely to make a comeback as pandemic-era habits fade. But the fact that deals got done this year, and the market held up better than anyone expected in March, is a warning sign for anyone betting on in-person closings over the long term.

4. Responsive, humane delinquency management

Presently, lenders’ and servicers’ risk management departments accept that a certain proportion of their loans will lapse into delinquency and that foreclosure is inevitable in many of these cases.

The first condition won’t change much by 2030, but the second can and probably will. AI-powered servicing solutions like Brace, which spots troubled loans early and keeps borrowers current, will help servicers identify looming delinquencies, jumpstart the workout process, and stop costly foreclosures before they happen. With widespread implementation, lender foreclosures could become less common by decade’s end.

5. Remote work

Many of the office-based jobs that evaporated in the pandemic-induced shift to remote work earlier this year aren’t coming back — to the office, at least.

They still exist, just in dispersed form. In time, they’ll disperse further, as newly location-independent workers seek out lower-cost, higher-quality-of-life alternatives to expensive coastal hub cities threatened by climate change and income inequality. A 2020 study of the best places to work remotely identified clear competitive advantages for small and midsize cities in the Midwest and interior South, mainly due to low living costs and excellent Internet infrastructure. As the knowledge economy gains ground in places like Grand Rapids, Michigan, and Des Moines, Iowa, fintechs clustered in major U.S. metros will need to broaden their horizons and cast a wider net for talent.

Final Thoughts

This year taught us that trying to predict too far into the future is risky. We can’t say for certain how the world will look 10 months from now, let alone 10 years.

That said, no one disputes that an ambitious cohort of fintechs are revolutionizing the mortgage industry in real time. By 2030, homebuyers and homeowners will take for granted a host of new capabilities now in their infancy.

In-person appraisals and closings will be strictly optional. The entire origination process will involve few person-to-person conversations and take a matter of days, not weeks, for well-qualified borrowers. And the lender foreclosure process, at least in its current form, could be all but obsolete.

You read it here first.

Caleb Skinner worked in a mortgage lending company for 15 years. He is now a finance consultant.

---

Photo by Tomasz Frankowski on Unsplash