The “fast-follower” strategy has been a perennial favorite among financial institutions. But that approach may be on life support. Global consulting firm McKinsey cautions financial institutions that they must now either be leaders or, at the least, very fast followers.
The leadership team at Numerica Credit Union has taken this warning to heart. With $2.3 billion in assets, the plucky Washington-based credit union became one of the earliest financial institutions to embrace Amazon’s Alexa, rolling out its voice banking assistant in March 2018. Numerica was one of only two credit unions to beta-test an Alexa banking skill created by Best Innovation Group in partnership with Jack Henry & Associates. (The other was Enrichment Federal Credit Union in Tennessee.)
“The very definition of the word ‘innovative’ means you’re not waiting around for a tried-and-true, fully vetted solution to fall in your lap,” exhorts KayCee Murray, SVP of Information Technology at Numerica.
For the ultra-competitive Murray, Numerica’s ability and willingness to quickly implement “fun new technology for our members” makes working for the credit union a blast. She also loves how it catapults the institution ahead of many competitors — including some very big banks.
“Credit unions get a reputation that they can’t keep up with big banks, because their technology budgets are so much smaller,” says Murray. Numerica’s Alexa voice banking play was “a very deliberate way to illustrate that the credit union can have many of the capabilities of a big bank, and sometimes even beat them to the punch.”
Differentiation can prove difficult in financial services, she observes, but being early into voice-banking definitely sets Numerica apart.
“We definitely want our members to know that we are forward thinking, and that we are always looking for ways to make things easier for them,” Murray explains.
Don’t Discount The ‘Cool Factor’
Numerica’s Alexa banking service was launched following nine months of development. Going just by the numbers, results so far have been modest, with fewer than 1,000 of Numerica’s 145,000 members downloading the skill. However, Murray points out that very little marketing beyond what’s on the credit union’s website has been done thus far, some social media and local media coverage.
Murray readily concedes that the Alexa banking capability is “definitely not yet table stakes in banking by any stretch of the imagination.” But that attitude completely overlooks the value of the “cool factor.” In that regard, Murray says Alexa banking “has done exactly what we wanted it to do.”
“People learn about it and say, ‘Wow, you guys can do that?'” Murray exclaims.
Like almost all new banking channels — going all the way back to ATMs, and more recently, mobile deposits — it takes time for people to adopt and develop new habits. While mobile banking and online banking are now table stakes, they certainly weren’t initially.
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When Will Voice-Banking Gain Traction?
So far, the two most common requests Alexa gets from Numerica members are: “What’s my balance?” and some question related to the member’s loan — e.g., loan balance, or next payment due date. Transfers between accounts.
Numerica plans to build out marketing support for its voice-banking capability, but it expects growth will be gradual for some time. Murray gives three reasons:
1. Voice banking remains a niche channel. Research among Alexa users in general shows that people often don’t always use it consistently, even once they get it set up, Murray notes. Numerica’s Alexa banking users, for example, don’t access it as consistently as they use the credit union’s online or mobile banking services.
2. So far it only operates on one voice platform. “Voice banking is more than just about Alexa,” says Murray. She is eagerly awaiting the capability to add the Google Home voice assistant, which she believes will definitely boost usage.
3. More functions are needed. Two in particular would increase usage: third-party bill payment, and mortgage payments. The first is likely to happen sooner because Jack Henry has introduced Alexa functionality to its iPay bill payment solution, which Numerica already uses for online banking. The mortgage payment option will take longer, says Murray, because those payments are sub-serviced. In both cases, Murray is adamant that the new functions be integrated into the existing voice application and work with Jack Henry’s Symitar platform — the core system Numerica uses.
Even without those two payment functions the list of what Numerica members can do by voice-banking already is quite broad. It includes:
- Obtain checking or savings balances
- Transfer money between Numerica accounts
- Make an auto loan or credit card payment
- Cancel a lost or stolen card
- Find out loan balances or next payments
Murray is reluctant to make predictions about how many voice banking users Numerica will ultimately have, but says she would love to double the current number by the end of 2019 to about 2,000, and then sustain that pace for the next few years.
Embracing Alexa: Lessons Learned
Be patient when dealing with Amazon. “One of the big differences in developing this product versus, say, mobile banking is that Amazon has a detailed process to go through to get your skill approved,” Murray explains. “They read every bit of documentation you have because they want to make sure it matches exactly what the skill does.” Murray notes that Amazon has since made some changes to its process as it became more familiar with the needs of financial institutions.
Carefully work through your end of the process. Numerica had to carefully think through the steps involved in each voice-banking function, considering both how consumers would request a particular action, along with the appropriate responses that Alexa should give. Dialogue needs to be as concise as possible, says Murray. “You don’t want someone thinking, ‘Oh my gosh, Alexa is still talking!'”
Be sure you’re delivering the kind of experience you want people to have. With a new technology like voice banking, it’s easy to overlook the fact that you’re asking a consumer to do too much work as you get caught up in the excitement of a particular “awesome” feature. As an example, Murray says Numerica abandoned a feature designed to avoid declined credit card transactions when someone was traveling. In tests it wasn’t a smooth interaction, she says. Alexa in this case was too restrictive to be helpful, so Murray and her team decided to pull that feature out of the mix.