The Rise of the Voice Payments Ecosystem

Voice-enabled assistants are the newest buzz among consumers across industries with Google, Amazon, Apple, and other giants rolling out AI-infused gears functioning primarily through conversational voice interfaces. Globally, the number of customers using voice-assistants is increasing with a CAGR of 29.4% and is estimated to reach 1.83 billion by 2021. Alexa, Siri, and Google Assistant have all become an integral part of a millennial’s day. From setting up reminders, checking the weather, to shopping – these voice-enabled digital assistants have covered most of the bases heavily influencing the mobile-tech experience.

Financial services have been one of the biggest beneficiaries of such innovations around mobile tech and IoT. Clearly, voice-first devices are the next big frontier in the global financial services space. What initially started off as a means of engaging with the customers and answering their queries has expanded beyond mere customer service to transactional banking and payment services. Banks are now looking at these voice-assistants to deliver personalized services to their customers who can use them with just their voice.

The dynamically changing needs of customers who want their banking & payment experience to be as seamless as messaging, the structural evolution of conversational AI, a growing adoption of voice-enabled personal assistants and a sudden uptake in conversational commerce are some of the major stepping stones for the evolution of voice-payments ecosystem. The adoption has already begun significantly as an estimated 8%-10% of US customers have used a form of voice payment at least once.

The biggest promise of voice FinTech comes around personalization. Voice is a tremendously rich, raw, and unstructured source of customer data, harnessing which can present valuable insights around customer behavior and needs. Also, most of these tech giants active in the voice-space already have deep roots in customer data. Thus, voice-FinTech can potentially be a game changer in terms of context-aware engagement and concierge services. Also, in conversational banking, each interaction can be adapted to reflect the bank’s brand identity and the customer’s individual profile, delivering enhanced customer experience as well as brand loyalty. From a reactive-listening tool to an intelligent concierge and recommendation engine, voice-enabled digital assistants have evolved to enable banks, FIs, and retailers to deliver next-gen smart payments.

The voice technology ecosystem is evolving. There are some leading voice assistants by tech-giants such as Alexa, Siri, Cortana, Bixby, Google Assistant, etc. Also, there are several FinTech enablers (e.g. Nuance, Personetics, Kasisto, etc.) who work with banks, FIs, and other businesses, and help them create their own voice-assistants.

Several banks, financial institutions, and new FinTech players have already taken a lead in utilizing voice for their banking operations. Among banks, Capital One, American Express, and US Bank have their skills on Alexa, whereas ICICI, OCBC, Barclays, and ING have integrated with Siri. Through these leading voice assistants, these banks are enabling their customers to check balance, make fund transfers, pay credit card or other bills using Alexa’s/Siri’s voice-first capability.

Some banks have gone ahead and created their own voice-enabled digital assistants. Here are some of the most notable ones: Santander Bank, Bank of America, Ally Bank, and Garanti Bank.

Some of the other financial institutions leveraging voice-assistants are Liberty Mutual, Fidelity Investments, Ameritrade, PayPal, etc. FinTech players are not far behind, as some of the leading players in their segments, leveraging voice assistants are – Monzo, Venmo, Azimo, etc.

As we can see, the traction is certainly increasing. However, there is one major concern – security.

Like every other newer technology, voice payments are highly susceptible to fraud. In September 2017, a series of critical Bluetooth flaws (Blueborne attack) exposed the security loopholes in millions of AI-based, voice assistants including Google home and Amazon Echo. Also, the growing CNP fraud poses a serious challenge which will test the security aspect of voice payments. Apart from malware-driven hacking, voice-controlled smart hubs are prone to accidental triggering leading to unauthorized access to the payment capabilities.

Such security concerns raise a serious question on the effectiveness of existing authentication and anti-fraud measures in this space. Currently, the prevalent modes of authentication in these voice-payment systems consist of either a biometric authentication (e.g. fingerprint of Apple’s TouchID), or a four-digit PIN code to be read out loud (e.g. in Alexa). Arguably, multi-factor authentication can hamper the seamless promise of voice-payments. However, considering the scope of fraud, there is an urgent need for enhancements in the current security standards. Some of the potential fixes can be on deeper exploration of voice-biometrics, enhanced voice-data encryption using time-bound, single-use voice-token, and multi-factor authentication using biometrics, OTP, and other such techniques.

In the coming years, we can expect more devices, more accuracy, more applications, and more adoption. The scope of voice payments will begin to evolve from reactive listening to prompts and suggestions. Advancements in conversational AI and predictive analytics will lead to voice-assistants providing comprehensive, context-aware digital concierge services. Security and authentication of voice payments will become a major area of focus and will be implemented, possibly through regulatory intervention. That will increase confidence and comfort. We can also expect a growing demand for interoperability between various voice-assistants, pushing for a convergence between major voice-payment services using Siri, Alexa, Google Assistant, and others.

All in all, there is a lot happening in the voice-enabled FinTech space with several banking & payment capabilities by banks coming to the fore. This is certainly an area to look out for in the coming years. Voice, will indeed, change the way we look at FinServ.