Wanting a change from Brexit articles (too many of them are just too much speculation), I was looking back at some of the news stories from earlier in the year that I’d meant to blog on but hadn’t managed to. One of those was HSBC UK’s introduction of voice biometrics (see Finextra: “HSBC to roll out voice and Touch ID to 15 million UK customers”). By my reckoning HSBC are the first big UK bank since Barclays to roll out biometrics.

Back then in 2014, I wrote a post “The Growth in Voice Biometrics for Banking” looking at the general trends in biometric authentication for financial services and I think it’s worth revisiting where things are. (I know Atom Bank UK is launching with biometrics (see: “Atom Bank to launch with face and voice biometrics” but they are unlikely to have the same scale of customer base as HSBC or Barclays or have the range in demographic profiles and regional accents). I won’t look at any of the specifics of the HSBC implementation and in many ways it is the overall trends that are most interesting.

As readers will know from of my blog posting (in)frequency, I’m not one to rush into comment. Instead, I’d rather let the dust settle and stand back for a longer look. What interests me is why it’s taken so long for other banks to use the technology.

I think there’s four big factors and that these factors may run across all technology adoption in financial services. They may also apply to other new technologies, such as blockchain,

Passwords have been “good enough”

Many technologists tend to forget that “good enough” is often on its own a reason why change to something better does not happen. The issues with passwords are well understood; they can be stolen, are open to identity fraud and prove knowledge rather than identity. Yet the strengths are often overlooked. Passwords are understood by users and legally their position has precedents. There may be risks but these risks are understood, which makes them much more manageable than technology which is potentially better but may also contain unknowns. Today’s voice infrastructure is designed for this world, with call recording and IVR (Interactive Voice Response) machines built to capture passwords entered by keypads, ID numbers and transaction records.

From my years working with contact centre infrastructure, I’ve often found that “good enough” is a powerful obstacle to change within organisations. Too often the benefits of the new are not enough to overcome the organisational status quo . In the same way, while new technologies like blockchain have huge potential, they have to show not just that potential but also that the risks (however low) are less than the costs and known risks of staying with current technology.

Changing nature of fraud

Despite the past strengths of passwords, fraud has changed significantly and it is worth quoting a section of the 2016 Fraud Facts review from Financial Fraud Action, the UK’s cross industry body:

“The rise across all fraud loss types during 2015 owes much to the growth of impersonation and deception scams, as well as sophisticated online attacks such as malware and data breaches”

These methods all aim to compromise customers’ personal and financial details, including card data, in order to enable the criminals to commit fraud.”

In one sense, this is no surprise. A reduction in the use cheques, the widespread use of chip and PIN for card transactions and similar changes in payments have defeated some types of fraud but pushed some fraud activity from the point of sale to the more vulnerable area of identity.

It’s particularly striking how identity theft has soared as more and more data becomes available through social media. The BBC reports that identity theft has risen 57% in the past year and this starts to make “good enough” identity factors (like a password and a mother’s maiden name) not quite good enough.

Changing nature of remote interactions

The decline of the contact centre is sometimes talked about, but (in my view) is more hype than reality. Poor customer service from contact centres is a meme in popular culture but I don’t believe that consumers inherently hate telephone service. I would argue that consumers hate poor service, and a misplaced focus on efficiency and cost savings has tended to create situations that force consumers to contact the contact centre, which then has become the dumping ground for broken organisational processes.

In my view, there’s two reasons why contact centres remain strategic.

1. Mobile devices – It may seem obvious that mobile devices are nearly everywhere and landline telephony is in decline. The smartphone is now the preferred device for accessing the internet in the UK. In their 2015 report “The UK is now a smartphone society” OfCom (the UK’s communications regulator) found that not only had smartphones overtaken laptops as the preferred device for accessing the internet, but they were also used significantly longer each day than any other device.
2. Volume vs value -  In future, I suspect that while telephone contact volumes might drop (i.e. number of calls), those fewer interactions will be longer duration and more valuable to both parties. Basic transactions (such as checking account balance) will continue to move from the IVR to the web or apps in the mobile channel. What will be left in the voice channel will be the interactions that are more complex, more valuable and more urgent and time sensitive. These will be customer service moments of truth for consumers and organisations.

Technology change

Finally, there is a steady technology change underway. Where once talking to a machine might have seemed novel, the roll out of technologies such as Siri have made users much more familiar with the idea of voice recognition systems. At the same time, biometrics have improved and the cost of the compute to power them has reduced substantially. One illustration of this is the way Amazon has opened its Alexa platform for developers with an API allowing anyone to build voice enabled applications. This level of adoption and technology development has tended to make for a virtuous circle, as better speech recognition technology has encouraged deployments and produced better results.

In short, biometrics have improved significantly and at the same time there is  is an incremental, but steady revolution in how people interact with financial services providers. Voice biometrics can be a key part of enabling that and allow the contact centres to provide high value services securely. In fact, if anything the drive to mobile devices and real time service makes contact centres a strategic service channel. By adopting the technology, HSBC have positioned themselves well for providing their future services to their customers.