You heard it here first, live: Point solutions that provide self-service digital banking are dead. And big banks will outsource their digital solutions to a greater degree than ever before.
All because of voice banking.
The last generation of point solution providers focused on the mobile wave of self-service transition. But in the next generation of interconnected devices (also known as pMESH banking) point solutions will no longer lead the way. Meanwhile, bigger banks and credit unions that build their own solutions will increasingly need to outsource as the cost of pMESH banking rises—while the skills to innovate become diverse and expensive to maintain. In other words: no more point solutions and much more outsourcing.
Again: all because of voice banking.
Why will pMESH banking and voice facilitate the end of point solution providers and thus lead to more outsourcing? To pull off voice banking, you need to control all of the self-service channels and devices, the pMESH that constitutes the totality of the customer experience. And the next evolution in the digital experience is voice: Undisputed. Internet. Mobile. Voice.
In the past, vendors could only focus on one of those facets and be successful. For a vendor to focus on voice, they will need to also control the other devices and points of access. And those who build will need to hire lots of new people with new skill sets, some of which are still emerging.
When voice becomes a reality, Capt. James T. Kirk of “Star Trek” could be seen as a point of reference. Call it the “Star Trek” Effect: When Kirk asked the computer for information, he would get a verbal and screen-based response. The computer told him how far his destination was and plotted the destination on the big screen—voice in, voice and screen out.
Likewise, voice banking will not constitute an in-and-out flow exclusively. And the best voice banking solutions will integrate across devices: “Alexa where is the closest ATM?” … “The closest ATM is 1.2 miles away, look at your app for specific directions.”
So you’ll pick up your phone, look at the mobile banking app and the first thing you’ll see is a map that shows you the route to the ATM. Alexa likely “knew” you were going to want to get to the ATM, so she worked in sync with the mobile app to show you the way: One device (Alexa/Echo) drives another (the smartphone).
A customer experience of banking that weds all of this together, with a chain of devices working in sync, is not theory. Alexa banking is live today; channels working in sync are live today; and technology firms rushing to build voice banking along these lines of thinking are active today. While limited to a very small group of banks and vendors, the technology is there to pull it off. Today.
Back to point solution providers; a single vendor, existing in the world of self-service digital banking driven by voice, will need expertise that spans across devices—their skill sets, employees and processes geared towards creating cross-device customer experiences. And this requires a broad skill set base.
Did you think hiring for the Internet was a pain? Well, welcome to this future where devices proliferate. Imagine being a designer and someone asking you to “design for voice banking.” What does that mean in the context of design for voice? There are in fact implications—then add the cross-device dimension. The designer has to think about a customer experience where Alexa starts and Internet banking finishes. And that is about as different from the recent digital past as the space shuttle Enterprise is to the starship Enterprise.
One important point: New competitors will emerge in this voice-led future of digital banking. But they will start out as cross-device experts. No longer can firms just provide technology across a single channel. Once voice banking takes hold, it will demand that the vendor communities supporting digital banking become cross-device experts.
Will this drive larger banks to outsource? Probably; the market already is indicating this. Slightly larger regional banks, with up to $50 billion in assets, are starting to consider outsourcing their digital channels. And as they do, they’re seriously considering ASP models where they share infrastructure: an arrangement known as “multi-tenant computing” and currently known as “the cloud.”
Voice banking is coming, with big changes in the vendor community and outsourcing to follow. These are exciting times for everyone from consumers who will switch to a voice-led world, to the banks and vendors journeying into this unexplored high-tech future. To paraphrase the good Capt. Kirk, they will boldly go where no bank has gone before.
Robb Gaynor is the chief product officer with Malauzai Software, Inc., based in Austin, Texas. As a financial services technology executive, Gaynor specializes in launching customer solutions for banks and software companies.