Posted on

By investing in biometrics and AI, Wells Fargo is eyeing a move into voice payments

Wells Fargo is working on a voice-first payment capability it could soon make available for consumers.

That would go beyond where the rest of industry is at with voice interface, which, for the most part, has not yet advanced beyond basic requests like, “How much money do I have in my checking account?”

In 2015 for example USAA launched Nuance’s virtual assistant, Nina, on its website. Bank of America expects to launch Erica later this year as a virtual assistant integrated into the mobile banking app. Capital One has an Alexa skill. Customers can turn to their virtual financial assistant for basic day-to-day functions, like checking account balances and credit scores of scheduling bill payments.

But all of these things just scratch the surface, said Steve Ellis, head of Wells Fargo’s innovation group, who teased the bank’s own forthcoming voice-controlled payments offering.

“These digital assistants like Siri or Alexa — these things are just starting,” Ellis said. “There’s a really big future here for how our customers interact with us. We are starting to do proofs of concept with information exchange… but the idea of moving money from a fund to someone through a peer-to-peer payments system — that’s coming.”

He didn’t specify when it would introduce that functionality but hinted it would be “a shorter time frame than three to five years.” In the meantime, the bank is exploring how it uses the artificial intelligence that provides conversational banking abilities, and is bulking its biometric authentication practices necessary to nail mobile voice banking.

People are embracing the idea of conversing with digital assistants to exchange information and even make Amazon shopping purchases. Apps like Uber have raised customers’ standards for experiences that are fast, seamless and secure. Owners of smartphone devices are getting used to authenticating using their fingerprint, even if it’s just to unlock their phones; Apple claims a user will do this 80 times a day.

Banks, however, have yet to make the customer experience completely password- and PIN-less.

“We have about 5 billion-plus interactions with our customers every year and every one of them starts with authentication,” Ellis said. “If you can’t get that right, you can’t do anything else, so that’s always our first focus.”

Wells Fargo is no stranger to biometrics. Ellis himself co-launched its startup accelerator in 2014 when EyeVerify approached it with an idea to develop eye-recognition technology for security and identification purposes. Today, Wells uses EyeVerify’s eyeprint verification for its commercial banking customers.

Chatbot provider Kasisto, which Ellis described as a Siri for financial services, was selected for the same inaugural accelerator class. Whether Kasisto has the success of EyeVerify remains to be proven but last month the chatbot startup raised $9.2 million to expand its virtual assistant offerings. Ellis said Wells is “very close” to rolling out some of those virtual assistant capabilities to select employees and customers on a test-and-learn basis.

Besides the biometric factor, Wells and its peers need to work on the quality of the AI and its speech recognition as well as its ability to truly understand and process what a customer is saying on an emotional level, said Ron Shevlin, director of research at Cornerstone Advisors and author of Smarter Bank.

“There’s a lot of potential for [voice banking] but I’m afraid we’re conflating the voice interface with the AI capabilities needed to interact in a high quality, whether it’s providing service or advice, he said. “If it’s simple types of interaction then the bloom is off the rose… There’s no economic impact, no greater levels of customer satisfaction you’ve just created one more way for someone to check their account balance or account fraud or maybe pay a bill.”

Ellis identified three markers on the road to a voice-first future: information exchange, funds transfer and personalized advice. Most banks are at the beginning. Wells Fargo hopes to be an early mover into the second stage.

That was part of the reason for refocusing its efforts inside the Innovation Group. This week it announced it would be dedicated to AI as well as payments and application platform interfaces.

“AI is a baby step right now,” Ellis said. “It’s going to really adjust the way people think of how they use their phone get information and actually do things.”

Posted on

On the road to voice payments, Google and Amazon pull ahead of Apple

Google just scrapped its Hands Free pilot, a retail payments program it began testing almost a year ago that allowed people to use facial recognition technology to pay for items in-store. All they had to do was say “I’ll pay with Google.”

The road to mobile payment is riddled with the bones of past failures. Google previously stumbled with Google Wallet in 2011, the first attempt at a mobile wallet for consumers that never really took off — and was overshadowed by Apple Pay, which launched months later.

But now Google has a leg up in voice, which is probably the next shift in consumer behavior, and as a result, payments. The same is true for Amazon. Google’s Hands Free facial recognition experiment may not have caught on, but the popularity of its Home Assistant, as well as Amazon’s Alexa, is rising rapidly. Echo sales jumped 400 percent from last year, according to VoiceLabs, and both Google Home and Alexa grew their third-party developer bases more than 1500 percent.

Meanwhile, Apple is missing the voice-first boat, which is odd considering that Apple Pay, a fingerprint-enabled mobile payment service, took an early lead in the mobile payments race after Google Wallet’s flameout.

But fingerprint tech is different from voice. And even though Apple’s Siri debuted well ahead of Alexa and Google Home, in differs from them in the types of information users feel comfortable sharing with her and what they can share with Alexa or Google Home.

Here’s how the three biggest players in voice currently stand against each other in regards to voice payments:

Alexa
This week Starbucks — itself a payments pioneer disguised as a caffeine vendor — launched a beta version of its voice ordering function for iOS and Alexa users. About 1,000 users in the U.S. are testing the service. People who bank with Capital One can ask Alexa for information about their banking activity. Alexa has the greater information sharing and reading capability, for now, than its competitors.

There is an increasing number of service providers bringing Alexa integrations to enable commerce through voice. Currently, it adds a level of convenience to small purchases, like a Starbucks coffee or an Uber ride.

“I don’t think the day is on the horizon where a consumer is standing in their living room saying, ‘I want to order a 42-inch TV,’” said Michelle Evans, head of digital consumer research at Euromonitor. “I think it’ll be driven around different products or services where convenience is a factor,” like food ordering, or ride sharing services.

Google Home
Brian Roemmele, a researcher and analyst and founder of PayFinders.com, predicts that in the next two years adoption of digital assistance will accelerate as quickly if not more as the original iPhone did in its early days and smaller uses will begin to take off, like ordering food.

“We had three voice-first Super Bowl ads,” he pointed out. “One from Google and two for Alexa. People say mainstreaming is about 10 years away, I’m saying it already happened.”

It’s not clear what Google’s next move is. Now that the Hands Free pilot is over it plans on “bringing the best of the Hands Free technology to a wider audience,” it wrote in an FAQ this week. In the same week, Alphabet, Google’s parent company, warned investors in its annual report of increasing competition from “digital assistant providers, such as Apple, Amazon, Facebook and Microsoft.”

Furthermore, developers last month dug into the code that makes up the latest version of the Google Home Assistant and found some lines saying it would soon allow users to make payments directly through Google Home. Neither Google nor Amazon responded to requests for comment.

Siri
Developers have built a voice-first peer-to-peer payment capability into the latest iPhone operating system, with Square Cash and U.K. challenger bank Monzo. The next update will include voice-activated bill pay functionality, an Apple spokesperson confirmed. But because Siri requires the person’s fingerprint to authenticate and send the payment, it still feels like more of a mobile payment than a true voice payment. For example, someone might say, “Hey Siri, send John $10 using cash,” Siri would go into the Cash app to set up the payment, but then ultimately require TouchID verification to send it.

Apple’s best efforts in voice have been Siri and its new AirPods, wireless headphones made for better listening experiences and interactions with Siri. These allow people to exchange much more personal information, things customers are most likely uncomfortable disclosing to a digital assistant like Alexa or Google Home because of who might be listening in on that information, said PayFinders’ Roemmele.

Because customers tend to communicate more generalized information with Alexa and Google, Roemmele added, the two companies will need to fine tune its voice recognition and authentication capabilities to ensure when customers share private information they never feed it back when a third party is in the room.

Nevertheless, Siri as a digital assistant lags behind them. Customers feel the difference when they ask Siri particularly complex questions and she often directs them to web searches requiring they do further reading and research, instead of replying with a complete answer the way Alexa or Google would.

“Apple is missing part of the voice-first revolution because they see it as an upending to the existing operating system,” Roemmele said. “They don’t see it as a modality in and of itself and because of that they box themselves out of it.”