Why Banks Have an Ear to Amazon's Echo
Add Amazon Echo to the array of devices consumers can use to bank.
Capital One made a big splash Friday by announcing its customers can use their voice to pay their bills, among other tasks, on Amazon's smart speaker system. FIS, one of the biggest bank tech companies, Citigroup and Wells Fargo also said they are testing uses for Amazon Echo.
The focus on the smart-home device marks the latest frontier in the ways in which banks and their vendors are testing features on cars, fridges, watches and other internet of things.
Whether Echo becomes a banking staple is still unclear, but analysts said banks' interest in the technology underscores the promise of voice-command banking on newer devices and the importance of testing out potential customer engagement opportunities.
"It's a bold move," said Stessa Cohen, research director at Gartner, who views the partnership between Capital One and Amazon as an example of outside-the-box thinking.
FIS, one of the biggest fintech companies, is also bullish on Amazon Echo and has built out a working prototype for the device from its San Francisco innovation garage.
Doug Brown, senior vice president and general manager of mobile for FIS, says he believes Amazon's Echo is viable for banking applications so long as proper cautions are put in place for a device likely located in shared environments.
"There are considerable risks," Brown said.
Brown sees Echo's initial use cases for lower-risk tasks like checking balances, pre-staging cash withdrawals at ATMs and paying bills as the starting point. Wire transfers? Not so much.
Still, Brown is optimistic about the promise of the tech for banking and its ability to capture something digital bank apps haven't been able to provide: customer intent.
Sometime this quarter, FIS plans to roll out an Amazon Echo pilot with a bank partner as the next step to help settle the question of whether it commercializes the capability. Pilots, as Brown put it, are the "No. 1 sanity check."
Wells Fargo said it is testing the Amazon Echo in its Digital Innovation Lab. A spokesman said the bank has been looking at how customers could use a "smartwatch, transfer money in a connected car or consult with a mortgage adviser over a smart TV."
"One of the newest devices with which we're testing and learning is Amazon Echo, and we look forward to discovering how devices like these might make banking simpler and more convenient for Wells Fargo customers," he said.
A Citigroup spokesman said the bank is "testing a number of innovations that work with Echo." He would not provide more details.
While Wells Fargo, FIS and Citi are still testing the technology internally, Capital One customers can already ask Alexa, Amazon's voice-command virtual assistant, questions like "Alexa, ask Capital One for my Quicksilver Card balance" and "Alexa, ask Capital One to pay my credit card bill."
The partnership between Capital One and Amazon tests a possible future for digital banking — hands-free, voice command banking — and also gives the brand innovation cred just in time for the biggest and trendiest tech events of the year: South by Southwest. Capital One is among the banks with representatives attending the event.
Cohen said it illustrates an openness to form a partnership on a nontraditional device and a willingness to try a customer interaction model that's been catching on with banks across the country: voice.
Siri-like banking, after all, is seen as a likely direction digital banking will ultimately head. USAA, Ally Bank and BBVA Compass are among the forward-thinking banks that already let customers use their voice to accomplish banking tasks from within their apps.
Richard Crone, founder of Crone Consulting, said the voice interaction model as increasingly important. "Banks have thought of it as a security feature," he said. "It's really part of simplifying the user interface."
The Capital One voice banking capability feature lets customers take care of money-related tasks without tapping on their smartphones and it works on all Alexa-enabled devices such as Amazon Echo, Amazon Tap, Echo Dot and Fire TV.
Capital One customers, meanwhile, can already connect their banking app to the device so they can check their credit card balances, review recent transactions, make payments and access checking and savings account information.
Capital One has also worked with Amazon on its newer mobile banking apps.
Still, just because a feature is there does not mean the masses will use it.
"Millions of people are probably not going to flow to Cap One next week so they can ask Alexa to pay their credit card bill, but I think it's an important first step of bridging fintech and IoT," said JP Nicols,director of Next Bank Americas and co-founder of the Bank Innovators Council.