A glimpse into hands-free banking, smart home devices versus mobile

I find it very interesting to see how the industry of the internet of things is continuing to move towards becoming more and more personal. From the computer and the internet to phones and smart watches, and finally to bringing interactive technology right into our very homes.

Smart home devices are increasingly being seen as taking the lead in this evolution, even though vendors are currently testing innovative features on products as wide as ranging from cars, fridges and watches. Right now, the battle between internet giants to find the next cool gadget that will make a real difference in people’s day to day lives has begun.

Smart devices and banking

As a marketing and banking professional, I cannot help but to envisage how new devices can be used in banking. Personally, futuristic as it may seem, I would love for my bank to provide banking services through an all-knowing talking digital assistant. With all eyes currently on the home, our happy and secure place where we can bank at our own pace, make informed decisions alone or in consultation with our partner, all from the comfort of our own couch. The campaign to establish a market leader in the smart home device market really began when Amazon launched its Echo smart home device two years ago. This tiny device may look like a speaker but surprisingly it can do so much more.

A world of convenience

Echo is powered with a virtual assistant named Alexa. Alexa replies to requests of any kind from answering weather queries to controlling other home devices like lighting. Alexa can also set up calendar reminders or an alarm, search the web or even listen to the jokes that your family many not want to! The device has recently been upgraded with utilities for entertainment functionalities such as Spotify to listen to music, Domino’s for pizza orders, Uber for taxi bookings and even banking, with Capital One in the United States, being the first bank to deploy its virtual assistant in the financial marketplace.

So how does Amazon’s Echo work with Capital One?

The Alexa mobile banking app is paired with the Capital One mobile banking app which helps provide the following functionalities by asking:

• "Alexa, ask Capital One for recent transactions on my current account."
• "Alexa, ask Capital One when is my credit card payment due?"
• "Alexa, ask Capital One to pay my credit card bill."
• "Alexa, ask Capital One for the most recent transaction on our current account."
• "Alexa, ask Capital One for my Quicksilver Card balance."

Other banks such as Citigroup, Lloyds and Wells Fargo are currently experimenting the device; this signals that the industry has arrived at a significant point where the next step lies in merging banking technologies with smart home devices.

While Amazon have not yet released sales figures, a Consumer Intelligence Research Partner estimates that a total of three million Echo devices have been purchased in the US since 2014. Amazon’s Echo is now heading towards Europe, with great expectations for it to be quickly adopted.

Increasing security concerns

The proliferation of new connected devices poses considerable risks as home devices use a fundamentally shared network environment with personal data. Currently, Echo functionality levels are limited but soon there will be ways to provide a more secure environment by using virtual funded wallets and adding extra layers of security. To remove frictions for banking clients, Capital One has confirmed that the information is fully encrypted to the extent that not even Amazon is able to access it. In addition, Capital One’s customers can also set a personal key using an additional 4-digit code or a passphrase to recite.

As Amazon continues to lead the way in the smart home space, Google is responding with its Google Home device using a Google Now assistant to be released soon. Microsoft also has a virtual assistant named Cortana, with all being said to be more intelligent than Apple’s Siri.

The industry is moving fast, too fast and banks either have to take a calculated risk in order to take the lead or miss the curve and continue to lose out on profits. It is really interesting to see how innovators and disruptors will reach out to customers in a more meaningful and personal way and while they do, we need to take inspiration from this. Voice assistants are perceived as gadgets but it is undeniable that voice and hands free banking are the trend, they truly mean convenience and effortless ways to bank. They could also serve customers with sight and mobility issues. However, there are also some limitations to take into consideration. For example, how will the smart home market catch up with a mobile phone industry that is supported by a colossal amount of iOS and Android fans? Or perhaps both markets are not supposed to compete. The primary value proposition of mobile phones is that they are in their very nature mobile and can be transported from place to place while smart home devices can be enjoyed in the comfort of our homes. The difference remains in the audience and usability. Home Virtual Assistants seem to be more suitable for families. I checked on younger audiences if they would be as receptive and I got a unanimous answer: ‘I would love to have this new gadget except that I am never at home, I’m always on the go!’. We have to take into account that all these new gadgets from wrist band to smart home devices are all paired with smart phones. We still need to keep our smartphones and purchase an additional device on top of it to serve the same purpose ‘Banking’ but in a more convenient way.

Voice assistant and smartphones

Smart phones are really powerful devices that can operate with voice and hands-free features. Empowering the smart phone with hands-free voice banking features will definitely remove the friction of having to equip ourselves with another device while providing banking services on an already secured device. During the summer, Bank of America released a new app for Windows 10 mobile devices, tablets and PCs. Clients of Bank of America can use voice commands from Windows’ Cortana to look up their account balance, navigate around their screens in order to pay bills or transfer money, find the nearest banking locations and contact customer services. The app also lets customers import existing phone contacts and transfer money to friends, family and others through integration with People Hub. Banks need to consider how to serve customers, which customers to serve on which device and remain on the curve of high tech and convenient banking.

We are always searching for new channels for customers to bank with but sometimes we fail to see where customers spend most of their time or who or what they spend their time with. Primarily, customers may bank in branch, on the ATM, internet, mobile, with wearables and smart home devices. But nearly every customer spends most of their time on their phones. The smartphone has become a consumer’s life companion, a companion they listen to and carry around all day.  Today, smartphone penetration and mobile banking figures are at an all-time high. It is plausible to search for new banking channels, but it’s also very profitable to focus on a powerful banking channel we already have: the smartphone.

It is undeniable that smart phones can be powered with more convenient features such as hands free banking, features which provide the services customers want, services such as consultations, money transfers, bill payments etc.

Smartphones are powerful, they are here to stay, and by drawing inspiration from the latest connected smart devices, they can definitely remove the frictions we face of having to equip ourselves with another device while providing banking services on an already secured device.

Long live the smartphone and voice-activated banking!