technology. The virtual assistant will be integrated into BofA’s mobile app, which has over 21 million active users. BofA isn’t ignoring Alexa. Head of Digital Banking Michelle Moore said at an October press briefing that the bank will do basic transactions with Alexa. Voice is increasingly seen as the interface of the future. Voice allows for easier navigation, and it’s an option in situations where texting isn’t possible. The challenge is in getting customers to come to rely on voice and virtual assistants for financial content and transactions. “Consumers haven’t really seen the use of voice control be deep enough, helpful enough, to really come to rely on it on a regular basis,” says Emmett Higdon, director of mobile at Javelin. Developing that trust begins w ith automating routine transactions like bill pay and money transfers through virtual assistants, such as Erica. But it’s important that virtual assistants get these transactions right. “You have to develop a confidence level that those types of simple interactions are going to be done quickly, simply, and correctly 100% of the time before we start to move into the more proactive phase,” says Higdon. The proactive phase is where Erica stands to make big waves. The virtual assistant will use information about a client—spending habits, account balances,
credit scores, etc.—combined with predictive analytics and machine learning to reach out to customers with suggestions, solutions, and ways to save money. Customers will receive a text from Erica if she senses there’s an opportunity to provide financial guidance. At the 2016 Money 20/20 conference, BofA’s Moore demoed an example of receiving a text from Erica, in which the digital assistant says she’s found a way to save Moore $300 this year. Moore clicked on the text to launch the mobile app, and Erica explained by voice that, based on spending habits, Moore could add $150 toward her credit card bill to save up to $300 a year. At the press briefing, Moore said that Erica “goes beyond chat bots. It doesn’t just answer,” she continued, “it analyzes and gives you options.” Moore said Erica will become a “trusted advisor” in the growing realm of “conversational commerce,” an increasingly popular term in the world of e-commerce and virtual assistants. She also noted that virtual assistant Erica has more data available to it than the bank’s call center people do. Erica can even prevent fees and overdrafts by analyzing account balances and spending habits. “A lot of that cash f low analysis type of interaction is very, very valuable to customers,” says Higdon. “And I think that’s what Bank of America is focused on with Erica because that has
the highest potential to deepen that relationship with that customer.” Deepening relationships w ill ultimately lead to the f inal stage of the evolution of virtual assistants—personal, human-like interactions. While these human-like interactions are a ways off, Erica still has valuable content to offer customers, including w e b - ba s e d , e duc a t ion a l r e s ou r c e s through BofA’s Better Money Habits site, a partnership with Khan Academy. Users will be prompted to videos as well as other in-app content when Erica senses a need for it, such as when a credit score has gone down. “Linking those resources together, in a contextual way for consumers, is very powerful,” says Higdon. As more banks begin to move in this direction, virtual assistant technology may be the catalyst that leads to mobile replacing the branch as the primar y channel of interaction. “Virtual assistants start to play that bigger, more human role, and as a result, it creates the opportunity to fundamentally shift the business model and put mobile at the forefront of the experience,” points out Tiffani Montez, senior analyst at Aite Group. “The branch, the call center, and even online will become the complementary channels.” (Editor & Publisher Bill Streeter contributed to this story.)
CHARGE-OFFS: A MIXED BAG*
C&I +82.7% *Year-over-year
Credit cards +13.4%
Residential & commercial real estate –39.1%
Net loan losses, overall +16.9%
December 2016/January 2017
BANKING EXCHANGE
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