Moves By Facebook, Apple Clearly Signal Banking’s Future

Tech giants Facebook, Apple, Google and Amazon may never become banks, but they don't need to. Banking-related developments by Apple and Facebook point to the future of conversational engagement and embedded payments. Banks and credit unions can tap into these trends if they adapt marketing and technology capabilities to embrace the emergence of 'everywhere banking.'

Ubiquitous conversational engagement is moving closer to becoming a reality. The foundations are being laid by Apple, Facebook, Amazon and other Big Tech firms for the everyday reality of continual voice interactions for a variety of financial and other transactions. In some cases, much more than foundations are already in place — witness the popularity of digital voice assistants like Alexa and Siri and Google Home. There’s much more to come, however, and banks and credit unions should carefully watch where the tech giants are going. It points to the future of banking. Here are some significant developments.

In March, 2019, Apple purchased eight patents from LighthouseAI, a defunct company, according to Intellectual Asset Management, which uncovered the patent portfolio reassignment in the U.S. Patent and Trademark Office database. The patents related to home security camera technology, which BGR suggests hint at constant, AI-based user recognition, a new kind of passive authentication, eliminating the need for passwords.

Sci-Fi Banking Fantasy Comes to Life

This kind of persistent authentication technology will be a key component of conversational engagement. In many ways it will resemble the immersive intelligent-assistant experience in Star Trek television series, which Amazon’s Jeff Bezos credits for the inspiration behind Alexa. For non-Trekkies, the omnipresent computer featured in the series delivers information audibly or on-screen according to an individual’s unique profile that includes location, interests and needs, and historical preferences. Apple’s patent purchase signals its plans to bring this sci-fi fantasy to life.

Voice interfaces have been some of the hardest technologies to develop, but they’re some of the easiest for humans to learn. Speaking comes naturally. Voice technology still has ground to cover, but security has already skyrocketed and players in the space are working to drive further progress. Amazon, for example, is deep into its beta testing of Voice Profile as it focuses on stronger voice-authentication biometrics.

While security has been a drag on some financial institutions’ adoption of new customer service channels, such as virtual personal assistants, biometric authentication does a good job protecting customers, even from user error. A bank or credit union can’t stop Grandma from putting a Post-it Note on her debit card with her PIN written on it, but with biometrics, they don’t have to. Biometrics also unlocks new technology channels for connecting with customers.

For voice banking to play a prominent role in overall conversational engagement, secure, real-time, ongoing authentication is a must. Consumers want to conduct transactions with ease. Intelligent, AI-based software combined with multi-device triangulation can work seamlessly across devices to analyze and verify a user’s behavior, voice, pulse, biorhythm and other biometrics. This multi-modal authentication will make conversational banking both safe and convenient.

To reach its full potential, conversational engagement needs to be underpinned by the banking and payment information of users. Making their banking details accessible to a virtual personal assistant will empower consumers to purchase, subscribe, buy and reserve with their voice — literally, “just say the word.” Even in an increasingly virtual world, the ability to pay for goods and services is an essential part of the overall experience. Paying by voice reduces friction substantially.

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Facebook’s Move Into Crypto Transactions

In addition to continual authentication, the movements of another major tech player point to a second trend: Banking and payments will soon be linked to nearly every aspect of our lives. Facebook has been steadily building a blockchain group tasked to work with this nascent technology, which creates a linked record of cryptocurrency transactions.

The social media giant is seeking investments from venture capital firms of up to $1 billion in its blockchain project, according to Fortune. Further, Facebook is recruiting financial firms and online merchants to help launch a crypto-based payment system that would use a digital coin, as The Wall Street Journal notes. Clearly Facebook recognizes that payments are serious business.

Nearly no area of life — not even consumers’ online persona — will remain isolated from their real-world banking account.

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Conversational Gadgets, Far Beyond Alexa, Are Near

What are these signs from Silicon Valley telling us? That conversational engagement, backed by biometrics and banking, will be here soon — perhaps even sooner than we thought.

In the near future, voice banking will involve so much more than just using your voice to check your account balance. Already, forward-thinking financial institutions of all sizes are testing out conversational banking powered by artificial intelligence. They know that growth is no longer about getting more accounts and deposits; it’s about servicing account holders in the ways they want to engage.

While today bank customers and credit union members mostly rely on the in-person, phone, online and mobile channels, the conversational engagement schema being mapped out by Apple and its operating-system competitors will bring a multitude of additional interaction channels into play, from watches to cars to televisions and more. Conversational banking will not be limited to Amazon Alexa or Google Home; voice-controlled cloud-computing software will be integrated into almost every new gadget, vehicle and building.

Persistent authentication enables “everywhere-banking”, and “everywhere-banking” allows the conversational engagement ecosystem to sync with consumers’ everyday lives. The ability to authenticate a transaction right now, wherever you are, using multiple different methods breaks down barriers to commerce.

Square Cash on Apple Watch? You ain’t seen nothin’ yet.

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