Actionable Insights From APT's Financial Services Practice

Talk To Me: The Impact of Voice Recognition in Mobile Banking

May 20th, 2013 | Posted by FedCohen in Uncategorized

Last month, US Bank announced that they will test features to allow customers to carry out banking tasks by speaking directly to their smartphones. To better understand the impact of the new feature, they will pilot the functionality by first allowing bank staff to leverage it. Piloting the features is a great way to understand the incremental impact of the implementation and what effects it will have on customers.

As banks evaluate customer-level investments in this way, they should keep in mind two key points that ensure banks properly understand the impact of the investment:

Watch out for pilot bias: Testing out voice recognition features with staff can be a double-edged sword. While the group represents a low-risk subset of “customers,” they may not be representative of the overall customer population across many dimensions. They may have similar distribution of demographic factors, yet may have a different profile of engagement than an average group of customers. Internal staff will be much more in touch with feature advancements than many other customers, and US Bank should be cognizant of this when measuring the impact of this new feature. In short, banks should be mindful of the potential biases that can arise when selecting a subset of customers to leverage for new pilots. Executives should make sure to measure any change in a control subset that is similar to the pilot group, in order to make sure that the impact is a true response to the pilot and not the result of other factors.

Incorporate the cross-channel impact: In today’s omni-channel environment, any action will have ripples that spread to other channels. As new features further advance mobile banking, banks should measure the impact across the entire relationship, instead of simply the mobile channel. For instance, facilitating mobile banking will most likely have impact on the amount and type of transactions that occur at the branch and online in complement to the mobile channel. This is a tough mandate. Nevertheless, actions like these could cause small impacts in branch or online performance, which have natural variations that are much more pronounced. Banks should make sure to control for these factors through rigorous holdouts across these channels to appropriately filter out the noise of other effects.

As banks continue to innovate across these emerging channels, they will need to make sure that they have the capability to measure the impact of new initiatives rigorously and with a focus towards informing business decisions. Keeping in mind potential bias and the multiple channels involved will help banks to maximize the incremental ROI of each new offering.

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