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Digital

Are Intelligent Assistants Smart Enough Yet?

Deborah Matthews Phillips
Aug 17, 2016

Blog-2016-08-17

Twenty-three years ago, my 7 year old daughter was given a homework assignment to write about something she would like to invent. I was so proud of her idea – she called it “Speak it and see it.” The concept was a simple speech recognition tool where a user could dictate into a microphone and the words would appear on the computer. The fact that she received only a “B” demonstrates how far-fetched this idea must have seemed at the time.

Fast forward to 2016. There is an exciting evolution at the intersection of natural language processing, artificial intelligence and connected devices. Intelligent personal assistants like Amazon’s Alexa®, Apple’s Siri®, Microsoft’s Cortana®, VIV, Hound and Google Assistant promise to change the way we manage our lives. Gartner explains, “An autonomous agent becomes the main user interface. Instead of interacting with menus, forms and buttons on a smartphone, the user speaks to an app, which is really an intelligent agent. These intelligent agents may be associated with an individual app or act across multiple apps.”

Intriguing for sure, but are they the next big thing?

Microsoft’s CEO, Satya Nadella, thinks so. He contends "conversations as a platform" are equivalent to past paradigm shifts like the graphical user interface, the web browser and the mobile phone touchscreen. While my personal text message dictation experience is humorously inaccurate and embarrassing at times, KPCB’s Mary Meeker claims voice recognition has improved to almost 99% accuracy. Even so, today’s voice-enabled commands fall short of the promised potential of genuine personal assistants. I love being able to ask Alexa for the weather, traffic and breaking news reports during breakfast. My husband enjoys the sports updates, tracking Amazon orders and listening to his Pandora selections. It’s entertaining, but has it achieved the game changer status pundits predict?

Alexa’s getting smarter, but she still has a lot to learn. For example, I can ask Alexa for a list of nearby TexMex restaurants and she’ll comply, but when I ask “Where can a buy a taco?” she isn’t able to understand that request. (It’s interesting that most users refer to their assistants with a personal pronoun rather than “it”, reminiscent of the anthropomorphic characteristics of Rosie the robot in the Jetsons family.)

It doesn’t take a crystal ball to see that there is a rich future where the hands-free magic will extend beyond rudimentary requests. Apple just announced it has opened up Siri to third-party developers. Thanks to IFTTT integration, Amazon’s Echo can control connected devices, like lighting, thermostats and security systems. For me, the real value would be an intelligent personal assistant that knows me and is capable of making recommendations and taking actions based on my personal interests and preferences.

Alexa has received a great deal of attention in the financial services space, with announcements from Capital One and Jack Henry’s Symitar division touting the ability to check balances and make payments. And Pymnts.com recently concluded a competition where companies like Visa and USAA competed with their Alexa-compatible innovations.

One expert believes in the next 10 years, 50% of all banking interactions will occur through “voice first” devices. Savvy financial services companies will leverage these technologies to transform their customer relationships from transactional to the experiential level customers crave. (Imagine asking your intelligent personal assistant to analyze your retirement account to ensure the investments are the appropriate mix for your life stage.) Elevating the value delivered to customers may help FIs mitigate attrition risk that exists today: Accenture reports 79% of consumers consider their banking relationship to be transactional; in other words, providing services that any other FI, as well as a growing number of non-traditional players, can deliver.

There are still some issues to be resolved by technology providers of intelligent personal assistants before adoption will hit an inflection point:

  • Just as in the online world, securing appropriate authentication and authorization is a fundamental yet critical element. It’s one thing to permit unauthorized additions to a shopping list; it’s quite another to allow users to execute purchase commands without ensuring both the identity and authority of that user. Since voice recognition is already in use in the marketplace as a biometric layer, adding other hands-free authentication factors should not be insurmountable.
  • Privacy remains an issue. Like Siri, Alexa is always in listening mode for the “wake” word. Amazon claims the Echo device doesn't record anything until you say that word; however, Amazon does keep recordings of the audio it receives. The tech titans underlying these assistants will have access to vast amounts of data about users- useful intelligence to drive marketing and future sales. Facebook’s David Marcus was transparent about his organization’s interest in monetizing data gathered through its virtual assistant called M. In an interview in Wired, he admitted, “We start capturing all of your intent for the things you want to do. Intent often leads to buying something, or to a transaction, and that’s an opportunity for us to [make money] over time.” (It will be interesting to observe the interpretation and application of the Children’s Online Privacy Protection Act (COPPA) laws to these technologies.)

The simplicity of voice-based purchases masks the complexity of the payment process underneath, suggesting some unintended consequences.

  • The growth of digital personal assistants will fuel “voice commerce” resulting in increased “invisible” payments. Associating connected services with the app (such as ordering flowers or pizza) requires the consumer to register an account on file with the merchant. Card issuers should act now to incent their cardholders to select their issued credentials as the default payment method. Phoenix Marketing reports that 56% of customers rarely or never change their top-of-wallet choice once it is made.
  • Card not present fraud is escalating: one expert projects an 80% increase over the next 4 years. Card issuers must plan now by deploying appropriate tools to mitigate this burgeoning risk.
  • Lastly, let’s not forget that some experts believe that removing friction in payments leads to overspending. FIs should be prepared for an increase in customer inquiries associated with invisible payments, purchases that customers have forgotten about or are inadvertently made by their connected devices; and possibly an increase in requests for lines of credit raises.

One thing is certain: we can count on brisk expansion of digital assistant capabilities, driving the value and reliance on these systems. To riff off one of my favorite Beatles’ song, we’ll soon wonder how we ever got by without a little help from our digital friends.


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