Banking by smart speaker arrives... but security issues still exist

New York: Hey Alexa, what's my bank account balance? Big banks and financial companies have started to offer banking through virtual assistants Amazon's Alexa, Apple's Siri, and Google's Assistant in a way that will allow customers to check their balances, pay bills and, in the near future, send money just with their voice.

And with the rapid adoption of Zelle, a bank-to-bank transfer system, it soon could be possible to send money to friends or family instantly with voice commands.

But the potential to do such sensitive tasks through a smart speaker raises security concerns. Virtual assistants and smart speakers are still relatively new technologies, and potentially susceptible to being exploited by cyber criminals.

Regional banking giant US Bank is the first bank to be on all three services Alexa, Siri and Assistant. The company did a soft launch of its Siri and Assistant services in early March and this month started marketing the option to customers.

Other financial companies have set up virtual assistant features. Credit card companies Capital One and American Express both have Alexa skills that allow customers to check their balances and pay bills. There are other smaller banks and credit unions that have set up Google Assistant or Alexa as well.

"We want to be there for our customers in any possible way that we can," said Gareth Gaston, executive vice president for omnichannel banking at US Bank.

For now, US Bank is keeping the features available through bank-by-voice fairly restrictive. Customers will be able to check bank balances, pay US Bank credit cards and mortgages, ask Alexa or Google the due dates on bills, and other basic functions. Money cannot be transferred from a U.S. Bank account using voice yet, Gaston said, but the bank is considering the option.

Asking Google, Alexa or Siri for the weather or to tell a joke is one thing, but it's a whole other issue when these assistants access and share sensitive personal information. These apps will typically announce a person's available balance over the speaker, which has the potential to create awkward situations at parties.

In the case of Google and Alexa, users must create a secure connection between their bank and the assistant through Alexa's Skills or Google's Actions. All banks require the use of a four-digit PIN before they will provide balance and bank account info over these speakers, and suggest making those PINs different from the one on a customer's ATM card.

Apple's Siri is the most restrictive of the three virtual assistants, only showing a user a bank account balance on a screen, and not allowing other features like paying bills. Banks can integrate Siri into their iPhone and iPad apps, but Apple's HomePod smart speaker that launched earlier this year does not currently accept banking commands. A company spokeswoman declined to say whether that feature was coming.

Google Assistant has the capability to do individual voice recognition, providing one additional level of security on that platform, but that is not implemented on U.S. Bank's Action yet. Security experts say that additional level of security could be foiled, however.

"Users' voices can be recorded, manipulated, and replayed to the assistants," said Kurt Baumgartner, a security researcher with Kaspersky Lab. "Also, with access to banking accounts and abilities to transfer and pay out money, remote financial fraud may be within the reach of cybercriminal groups soon."

Meanwhile, according to a report, consumer behavior is shifting toward voice. Among consumers who own a voice-activated speaker, 72 per cent say their speaker is part of their daily routine, according to an August 2017 study from Google. Consumers are becoming more comfortable with voice assistants because their accuracy is improving. Voice recognition accuracy among voice assistants now exceeds 95 per cent (the threshold for human accuracy). Most respondents (53 per cent) from the Google study said talking to their smart speaker felt natural, and 41 per cent said it felt like chatting to a friend.

While voice accounted for 20 per cent of searches in 2017, Google projects that voice will account for more than half of all searches by 2020. Gartner predicts that by 2019, 20 per cent of mobile phone interactions will use voice assistants like Siri.

Forrester projects that 50 per cent of US households will have at least one smart speaker by 2022 and that smart speakers will represent 68 per cent of smart home devices. A recent report from comScore reveals that nearly 20 per cent of US Wi-Fi households own a smart speaker (as of February 2018).

Smart speakers are selling faster than augmented reality, virtual reality or wearable devices. While Google and Apple have launched smart speakers, Amazon dominates market share (nearly 72 per cent of the market).

During the 2017 holiday season, Amazon sold "tens of millions" of Alexa-enabled devices worldwide with the Echo Dot as their top-selling product.

Research supports that smart speakers are more than a novelty gadget. Rapid consumer adoption may signal that voice will become the new UI.

Does voice banking appeal to more than just millennials? According a research, the answer is yes. Most consumers age 18-44 are likely to use voice control for mobile banking as are 46 per cent of consumers age 45-54. Voice banking appeals to all age segments.