Is it real, or is it Virtual Banking Assistant?

There’s a new virtual assistant in town, and it’s danged smart. Its name, appropriately enough, is Virtual Banking Assistant from Fiserv.* And while virtual banking assistants are no longer new, this one impresses in its cutting-edge conversational capability.

A recent Fiserv press release states:

Rooted in Natural Language Processing (NLP), deep learning and AI technologies from Clinc, Virtual Banking Assistant … doesn’t rely on rigid scripts, keyword matching or other traditional rules-based language. … the software allows for a more fluid and flexible approach that can handle the messiness of spoken language and its varying contexts.

Permit me to demonstrate:

Caller: Hey, so I remember I was in California last year and dropped a bunch of cash on food. Can you show me what that looks like?

Banker: You spent $733.84 from your three bank accounts on food and drink in California, which is 1.95% of your total spending from January 1, 2018 to January 1, 2019.

Caller: What about in Ann Arbor?

Banker: You spent $2631.60 from your three bank accounts on food and drink in Ann Arbor, which is 7% of your total spending from January 1, 2018 to January 1, 2019.

Caller: Hey, I need to transfer a hun’rd bucks from my checking account to my savings.

Banker: Let me confirm your transfer request …

That’s a transcript from part of a video a human caller interacting with Clinc’s technology. Notice that casual speech doesn’t throw the tech off-kilter. For instance, “Hey, so …” is a typical human opener but utterly superfluous. “Dropped a bunch of cash” and “What about” are colloquialisms that could throw many a non-native human speaker. And then there’s “hun’rd” versus “hundred,” a listless contraction indulged by some of the best of us.

If you visit the site and play the video, you’ll also see that the caller changes subjects and backtracks. No matter. The tech keeps right up.

But you might also notice that, despite inflections to a point, the voice still has that telltale sound of separately recorded words cut together. I cannot help wondering if that’s by design. The cut-together sound can subtly let callers know they’re speaking with a conversational AI without outright saying “you’re speaking with a conversational AI.” As Google found out the hard way two years ago when they presented Duplex, it can creep people out to learn only after the fact that they were speaking with an AI.

As interactive technology advances, new terms emerge that can be difficult to keep straight. The Financial Brand’s Bill Streeter provided a helpful summary. “Responding to a question from The Financial Brand,” Streeter wrote, “[conversational AI company Kasisto’s CEO Zor] Gorelov divides conversational AI into four categories, from simplest to most complex:

Bot—is an automated program that runs over the internet, typically behind the scenes. This places it at the bottom of the scale of intelligence and user engagement.

Chatbot—can look for patterns in text and respond with automated answers, usually best at very simple exchanges. Some analysts refer to this as checkbox chatbot.

Conversational agent—engages consumers with its ability to precisely understand the intent of the conversation, and then guides users to complete their goal. A conversational agent is always learning, Gorelov adds.

Cognitive virtual agent—knows the consumer deeply and uses that knowledge to anticipate needs, placing it at the top of the scale for intelligence and user engagement.

Call it what you will, the industry has come along way since voicemail.

*Although Fiserv is my employer, is my personal blog and does not speak for or represent Fiserv in any way.

Posted in Artificial intelligence Banking Finance by admin. Comments Off on Is it real, or is it Virtual Banking Assistant?

Mobile payment and the business of predicting

For a while it looked as though Google Wallet was going to take the world by storm. At least, last year many an expert predicted as much. This year, they are predicting instead that the likes of banks, Visa and Paypal will grab and run with that ball.

In, Kevin Fitchard writes, “Google and the carriers had their chance. Now it’s the banks’ turn.” He bases his prediction in part on a question Cheaton Sarma Consulting recently put to selected mobile industry leaders: “Who will define the mobile payment/commerce space?” Nearly 40 percent selected the answer, “Financial guys, e.g., Visa.” Less than 15 percent voted for Google, and only about 3 percent chose Apple.

I draw a couple of insights from survey results like that, one of them being that predicting the future is tantamount to setting yourself up to be inevitably wrong. The future has a habit of making hairpin turns even that even experts are powerless to foresee.

This is especially true for high-tech industries, which evolve blazingly fast. Not long ago, no one would have predicted that Apple Computer would one day drop “Computer” from its name, much less  turn the music, publishing, banking, photography and other industries upside-down by introducing—of all things—a phone. Or that, given its late start, the Android platform would have an iota of a chance in catching up, much less giving Apple a run for its money. Or that, speaking of late starts, old-tech Visa might stage a comeback and threaten to retake the reins of the electronic point-of-purchase future after all.

In that spirit, here is my other insight for mobile payments: Regardless of predictions, it’s decision time for banks. As Amir Tabakovic from BAI states, “Whether they fly solo or with partners, financial institutions need to begin placing their bets in the mobile wallet game.”

Trust in financial institutions rises among consumers

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A higher number of consumers expressed more optimism in the financial services industry as the economy shows signs of stabilization.

A reported 23 percent of survey respondents say they trust the nation’s financial systems, up two percentage points from the same study conducted in June, according to the most recent Chicago Booth/Kellogg School Financial Trust Index. Consumer trust rose for both national banks and local institutions, with smaller banks experiencing more gains than their larger counterparts. For example, trust in national institutions increased to 28 percent, up five percentage points from June. This is compared with trust in community banks and credit unions, which stood at 56 and 61 percent, respectively.

“Trust in banks has returned to levels we’ve reported in the last year of the Index, bouncing back to 33 percent from 27 percent just three months ago,” said Luigi Zingales, co-author of the study and Robert R. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business. “The low level of trust banks experienced last quarter was likely due to the effect of the JP Morgan scandal, demonstrating that very public cases of mismanagement can have short-run effects on trust.”

Americans’ growing trust in banks represents a good opportunity for financial institutions to market innovative products more heavily, such as mobile banking. Consumers who are more optimistic in retail banks may be more likely to enroll in new programs or seek out new products. As a result, bankers should focus on increasing their cross-selling efforts to further cement their customer base and increase their acquisition and retention goals. As economic uncertainty has prompted more consumers to focus on wealth-building initiatives, banks are likely to play a more integral role in individuals’ lives by providing low-risk products and a variety of tools to manage them.

Posted in Banking Finance by Matt. Comments Off on Trust in financial institutions rises among consumers

More banks market prepaid debit cards to all demographics, incomes

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Prepaid debit cards carry the reputation for appealing primarily to the un- or underbanked demographics. Individuals belonging to this sector typically rely upon cash, check-cashing services and alternative financing solutions to avoid traditional bank products, such as checking or savings accounts. However, new data reveals more financial institutions are expanding their prepaid offerings to not only target underbanked consumers, but also other demographics that are seeing the merits of these products.

A recent MarketWatch report highlighted this trend – which has been adopted by several regional and national banks – as a way to extend new products to existing customers. In recent months, there has been a push by banks to offer low-cost prepaid cards that carry a more affordable fee structure to underbanked Americans. While this is the preferred payment method for many belonging to this demographic, fees relating to activation, maintenance, ATM withdrawals, balance inquiry and other services, can be high and eat into a user’s remaining balance.

Now, financial institutions are advertising their lower fee structures to more affluent and financially stable groups, and marketing the cards as a money management tool, MarketWatch reports. As more Americans reevaluate their finances and spending habits in the wake of the recession, prepaid cards have emerged as a viable alternative to credit card spending. Data from the Mercator Advisory Group reveals that the market for prepaid cards increased 20 percent in 2011 to $483 billion, and is expected to climb to $594 billion by 2013, according to the news source. Separate data reveals that affluent and educated Americans are making up a larger percentage of individuals who now utilize prepaid products.

In addition to the wealthier segment, some financial institutions are also marketing these products to college students as well. Offering prepaid cards allows institutions to build relationships with the under-21 demographic without violating the rules set by the Credit Card Accountability, Responsibility and Disclosure Act, which makes it more challenging for banks to market credit cards to these students. Young adults can cover the costs of textbooks, food and other expenses with a prepaid card without the risk of overdrawing their accounts or racking up debt. Parents may also rely on the products to send their children money for emergencies or help them learn how to manage their spending effectively.

Posted in Banking Finance Marketing by Matt. Comments Off on More banks market prepaid debit cards to all demographics, incomes