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‘Alexa, did my rent check clear?’: Inside U.S. Bank’s voice banking strategy

U.S. Bank has quietly rolled out an Alexa skill for banking customers with Amazon Echo devices.

The fifth-largest U.S. bank by assets follows just two others that have also enabled voice as a banking channel through Amazon’s digital assistant: Capital One, which debuted its skill in March 2016, and USAA, which followed this July.

“Voice is going to be a hugely important part of how customers interact with any company, not just banks, in the near future,” said Gareth Gaston, head of omnichannel banking at U.S. Bank. “It’s already starting. Alexa gives us an opportunity to learn more about how our customers are going to interact with this channel and develop it before it becomes something really significant.”

Gaston said the bank intends to create similar offerings through similar platforms like Google Home, but wouldn’t confirm whether its begun those discussions yet.

Customers can ask Alexa for their checking, savings or credit card account balances, ask her how much they owe on a bill and when, have her read back their transaction history and prompt her to pay their credit card bills.

“It’s a great way to talk to our customers and give them another way to bank,” Gaston said. “Alexa is almost not a channel, it’s just there. We’ve piloted voice banking for authentication and saw this as a natural extension of that.”

The move is part of a bigger innovation effort U.S. Bank has been pushing this year. It was one of the initial banks in the Zelle Network to make the P2P payments offering available to customers in June. In July it launched an digital mortgage application.

It’s also a testament to the growing notion among legacy financial firms that to stay relevant, they need to meet customers wherever they are whenever they’re there, even if that means letting customers interface with potential competitors like Amazon or smaller financial companies to keep their business.

Earlier this year Wells Fargo CEO discussed the importance of keeping customers on a long leash by letting them maintain relationships with other payments providers, “as long as they come back to Wells Fargo.” Chase has also acknowledged its customers “really want to use these [third-party] financial apps and they do use them a lot.”

“Of course one should be concerned about what any competitive play would be in your industry, but to me, Alexa is like an iPhone: it’s a vehicle for an experience,” Gaston said. “At the end of the day we think it’s important to offer services through the devices our customers like using so we embrace it and learn from it.”

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U.S. Bank’s Dominic Venturo on creating a model for innovation

US Bank's Dominic Venturo on fintech innovation

This week on the Tearsheet Podcast, you’ll hear from U.S. Bank’s chief innovation officer, Dominic Venturo. Dominic describes what’s prompting banks to innovate and how U.S. Bank approaches innovation and judges its own success, including his team’s KPIs. You’ll also hear his take on whether the senior innovation role is just a flash in the pan or will be a key part of banking leadership out into the future.

Subscribe: iTunes I SoundCloud

Below are highlights, edited for clarity, from the episode.

Why are banks focusing on innovation?
U.S. Bank has a large payments business, which makes us kind of unique. Because the size of our payments business and the innovations happening in payments, we started the innovation group about 10 years ago focused solely on the retail payments side. We began to build out a practice by looking what was happening in fintech and emerging technology. Our original objective was to change the paradigm around how we did product development and to test and learn, fail fast, and hopefully less expensively for new things that weren’t quite well known. We then expanded that to the rest of our payments business lines and a couple of years ago, we expanded the innovation group to the rest of the bank.

U.S. Bank’s brand of innovation
Every institution innovates differently. Our approach is to work with the businesses to understand their objectives and strategies. We want to keep a long-term eye on emerging technology and how consumers and businesses interact with technology. We’ll blend that into the product development roadmaps for the businesses. In some cases, emerging technology will look like it has a lot of potential but then you really have to see how it applies to a business, whether it solves a customer problem or pain point, and whether it can scale to a company our size. I don’t know if this is different than others, but it’s definitely our approach.

Things like design thinking and empathy building have been built into our practice. We’ve also evolved the way we’ve handled research. We’ve done ethnographic studies on our customers and use that to identify pain points and future problems to solve. This model isn’t unique to innovation but it may be in financial services in general and banking in particular.

How do you judge success in innovation?
The first thing we do is ask what problem we’re solving. If you’re not actually solving a business problem, it could just be a shiny new object that’s interesting only to us. The next thing is to think about the technical feasibility and product performance. Early on, we could do this as a proof of concept to just prove whether the technology does what it promises to do. We then check to see if it’s scalable and can be run at the enterprise level. Lastly, we check to see if the behavioral changes occur that we expect to happen.

All along that journey, there are different dates we use to measure and check to see if we’re reaching our desired objectives. If we’re not, we want to know that early so we don’t continue to invest time and resources. That’s back to the fail-fast principle. When we look longer term, at the portfolio level, we’re measuring our throughput — how many new ideas are coming into the idea funnel and are being evaluated. Of those ideas, we see how many are turned into POCs or pilots. And once you get into the pilot phase, we measure how many of those are ultimately converted or commercialized into a product or a feature of a product. If we’re generating enough good ideas, we should see a fair level of conversion at the portfolio level.

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Hi 5! The top five fintech stories we’re following today

top 5 weekly fintech stories

Customers dig the new Bank of Hawaii branch design

You’d think a bank branch of tomorrow would be focused on all sorts of futuristic fintech. Bank of Hawaii’s new branches keep customers firmly in the center. With little visible tech, tellers also make their way out of hiding.

U.S. Bank’s approach to social intelligence

U.S. Bank has created a continuous marketing feedback loop. Whether it’s stadium sponsorships like the bank did with the Minnesota Vikings or an awareness campaign on Twitter, the firm turns big data into actionable insights to be used across the organization.

Inside MassMutual’s fintech startup, Haven Life

U.S. insurers, many of whom are over 100 years old, are trying to figure this whole innovation thing out. MassMutual has developed a couple of new online brands, including an in-house startup. Tradestreaming talks with Haven Life’s CEO about the future of insurtech.

Are there real world blockchain applications yet?

Blockchain technology is still too immature to go to market for many use cases. In this week’s podcast, ACI’s head of digital banking solutions names a few areas he sees more ready for primetime.

Mobile payments year in review

It’s been an up and down year for mobile payments. Consortia were formed and disbanded, former enemies came together, and mobile wallets at the POS are still stuck in neutral. Here are the best and worst moments for mobile payments during 2016.

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U.S. Bank focuses on customer experience to generate direct marketing opportunities

Vanity metrics are dead. It’s social media data that drives insights in the age of big data.

U.S. Bank has a team that’s tasked with helping the company make data driven marketing decisions. The company employs an extensive social listening program that tracks US Bank’s Voice of Customer as well as the feedback on its closest competitors. With that input in hand, the bank makes investments in innovation, product improvement, customer service, and content and marketing opportunities.

U.S. Bank and big data

“Financial organizations need to move away from being gut driven and just doing things based on what others are doing,” explained U.S. Bank’s Troy Janisch, director of social intelligence, at Tradestreaming’s 2016 Money Conference. “Once you start listening, you can fine tune it to be more responsive to the products and services you have.”

Compiling the data is the first step in creating actionable insights for U.S. Bank. It averages about 28,000 mentions a month and has a single employee whose job it is to validate all these mentions manually. But events like the Wells Fargo fiasco can cause mention volume to significantly change month to month. That means negative sentiment about U.S. Bank can rise from a baseline of around 3 percent to upwards of 8 percent. To flatten out the variability, Janisch’s team prefers to use ratios, like net promotor scores.

The social intelligence team next weights mentions according to what marketing was working on during the month. So, for an awareness campaign, metrics like reach, share of voice, and visits will trump other engagement and acquisition metrics. By weighting what matters most, U.S. Bank can customize marketing campaigns to achieve specific goals.

One place this works really well is on sponsorships. The bank spends more money on sponsorships than it does straight-up advertising, so tracking performance is really important. Minnesota’s U.S. Bank Field is the National Football League’s newest stadium. To measure the impact of the stadium sponsorship, the social intelligence team benchmarks the Vikings’ stadium against other leading fields like Citi Field and AT&T Field.

“For each field, we can measure the social potential, how much activity is going on, and the awareness and engagement on each property,” said Janisch. “So we can set goals for U.S. Bank Stadium to be more effective than AT&T Field is for its sponsor.”

U.S. Bank also tracks local mentions of its network of 3000 branches. The social intelligence team knows that 70 percent of its customers and prospects will check online before making a financial purchase. To be more effective at a local level, the company tracks Trulia, Facebook, Twitter, Yelp and Google for mentions of its branches.

Once the firm has this data in hand, it acts by allocating marketing dollars where they’re most effective. For U.S. Bank, this is an ongoing process. The bank’s social intelligence team has made the firm more responsive by creating a continuous feedback loop to the rest of the firm on what’s working now, without getting bogged down in historical data.

“Dwelling on what happened in the past just slows things down,” explained Janisch. “Mass marketing is now more about continuous in-process marketing, creating systems as opposed to campaigns. Good creative is essential to compete, but that comes more at the end of really understanding the customer and being able to provide the right creative to the right customer at the right time.”