Smartspeakers Are Calling; Are Credit Unions Picking Up?

Smartspeakers – or “digital voice assistants” – may have tongues wagging in the tech world, but they have people in the credit union industry talking, too. Why? Because those little listening devices that can play music, buy things or even lock the front door – all via voice command – are popping up everywhere, and developers are rapidly devising ways for them to help members track account balances, move money around and maybe even get loans or other products.

Experts at the bleeding edge say this isn’t a fad – smartspeakers are here to stay. But will credit unions answer the call? Here’s where industry pros said things stand today for credit unions and where they think the smartspeaker conversation will go next.

Smartspeaker Seduction

Smartspeakers are showing signs of catching on much faster than other technologies have in the past, so credit unions need to keep their ears to the ground starting now, according to Siva Narendra, CEO of the Portland, Ore.-based digital security firm Tyfone.

“Computers took about 30 years to get a 30% penetration. Mobile did that about twice as fast – in about twelvish years. Smartspeakers I believe will do that in record time, in about five years,” he said.

Consumer interest in smartspeakers appears to be substantial, too. According to a recent study by Javelin Strategy & Research, more than half of consumers would be willing to use Amazon’s digital voice assistant, Alexa, to check account balances and review recent transactions.

Price is also a big factor in adoption rates, Narendra said. Computers and mobile phones may cost as much as $1,000 or more, but smartspeakers sell for as little as $30. “Not just that, smartspeakers are going to be everywhere even if you don’t buy [one]. Every single car is going to have it,” he added.

Alexa, Do I Have Any Money?

John Best, CEO of the Tampa, Fla.-based Best Innovation Group, is one of the pioneers of smartspeaker technology for credit unions. His company developed Financial Interactive Voice Exchange, or FIVE, which is a customizable platform credit unions can use to create “skills” for Alexa devices – essentially apps for smartspeakers (on Google devices they’re called “actions,” he noted.)

By installing a credit union’s “skill” on their smartspeakers, members can use their voices to do things such as get balances, transfer money between accounts, retrieve account histories, cancel cards or notify the credit union if they’ll be traveling, he said.

Though some of a skill’s code may be similar from credit union to credit union, Best said, the necessary customization for each credit union still requires a surgical approach – to accommodate different payment system setups, for example.

“Think of it like this: Yeah, we’ve all got the same 737, but it’s got this cockpit with a million switches in it. So, there are a lot of different ways you could fly that plane,” he explained.

Best, like many in the field, is in a hurry to get credit unions involved with smartspeakers. One worry is that competitors or credit unions with similar-sounding names might grab valuable invocation names – the specific verbal commands that trigger a smartspeaker to launch a credit union’s skill for the user.

“We think you need to stake your claim in the Alexa skill world and the Google action world as soon as possible, so that someone else doesn’t take your invocation name and do it for you,” he said.

Answering the Call

The Oak Ridge, Tenn.-based Enrichment Credit Union, which has $459 million in assets and about 43,000 members, may not have to worry about that, though. Back in November, it became one of the first credit unions in the country to roll out its own Alexa skill. Now when members with connected devices say, “Alexa, open Enrichment,” they can do things such as make balance inquiries, complete transfer transactions, make loan payments and get branch addresses, according to John Merritt, who is the credit union’s chief information officer.

Enrichment started thinking about voice technology after a major data processing conversion in May 2016. It took about 10 or 11 months to roll out the skill, Merritt said, and most of the work – for the credit union, at least – revolved around testing and feedback to make sure the user experience was smooth.

To promote the technology, Enrichment has put demo smartspeakers in branches and given away Amazon Echos in monthly drawings. This year the credit union is giving away Echo Dots. “We’re kicking around ideas of every new account gets a Dot,” Enrichment CEO Craig Peters said.

Getting in on the smartspeaker action may be easier said than done, though. Credit unions tend to rely on digital service providers, Narendra noted, and their contracts are often three to 10 years long. If those contracts don’t address voice technology, credit unions could miss the boat, he warned.

Security is naturally also a concern, and developers are looking at ways to mitigate eavesdropping and other threats. Best said his company has developed a one-time password system for certain smartspeaker transactions, for example.

Some of the anxiety over smartspeakers may be more about the newness of the technology than about its vulnerabilities, however. Merritt said a lot of the worries he hears today are the same ones he heard when online banking launched decades ago and people could check their accounts by logging into a computer.

“You had the same hesitance from a lot of people in terms of, is it secure, is it safe? What do I do, how do I do it?” he explained. “It’s almost the exact same conversation again, it’s just different technology.”

Money Talks

The cost to build a smartspeaker skill for a credit union varies. Best said Best Innovation Group can design certain types of skills for $3,000 to $6,000, for example, though the cost rises depending on the size of the credit union, the number of features and services involved, as well as other factors. For some credit unions, the investment may be significant; for others, it might be totally manageable. The big question, of course, is whether it will pay off.

“A credit union has big bets, and middle bets and small bets,” Peters said. “A big bet would be putting in a new IT system that may cost you a million dollars, or building a branch that may cost you a million dollars, or a commitment to put in a million dollars’ worth of interactive teller machines. This is a small bet … we were spending more on radio ads than we did on implementing the Amazon Echo.”

Enrichment does track smartspeaker usage statistics, Merritt added, but for now the payoff on its bet isn’t necessarily measured in terms of revenue or profit – it’s differentiation and branding.

“We really did this initially more for the buzz and to get a leap as far as the perception that we’re high-tech. It was really more of an image thing,” he explained. “But since then, we have seen real substance of the implications of this. We have a blind member who uses this; I can see how it could be good for elderly people or anybody who can’t readily get to a branch.”

Call Forward

Getting account balances and moving money around may be great uses for smartspeakers, but there are plans for them to do far more for members.

Enrichment, for example, is exploring adding marketing and promotional messages to its skill. The system would track which members receive certain promotional messages, and the credit union is exploring how to connect members to a call center if they hear a message they want to know more about, Merritt said. And Best Innovation Group is looking at ways to integrate a voice-enabled loan application process into smartspeaker skills.

The giant leap, however, may come when everyone figures out how to get more artificial intelligence into the mix.

“That’s the thing nobody’s thinking about,” Best explained. “You can’t be content just to sort of put it out there and go, ‘Woo-hoo, it does balances!’ That’s going to be boring in the next four days. What’s going to be important is when it comes up and says, ‘Hey, one more trip to Chili’s and you can’t pay your mortgage this month.’”

What It Looks Like

Enrichment CEO Craig Peters demonstrated his credit union’s new Alexa skill during an interview with CU Times. Here’s a transcript of his conversation with Alexa.

Peters: Alexa, open Enrichment.

Alexa: Hello. Welcome to the Enrichment Credit Union Interface. If you need assistance, just say Help, or User Commands. Otherwise, let’s get started. How may I help you?

Peters: Transfer $10 from my checking account to my mad money account.

Alexa: First, would you please verify your four-digit PIN?

Peters: [We’ve hidden this for privacy, but Peters says four numbers].

Alexa: Fantastic! I was able to verify your PIN, and now we can continue. Just to confirm, I’m going to transfer $10 from your checking to your mad money, right?

Peters: Right.

Alexa: The transfer transaction has been completed. Would you like a receipt for this transaction?

Peters: Yes.

Alexa: How would you like your transfer summary sent to you? You can say, “Text or email.”

Peters: Text.

Alexa: Your transfer summary has been texted to [phone number]. Thank you.