Eric: 00:02 Welcome to the Finance Frontier. I’m your host, Eric Hathaway.
Eric: 00:08 This is the final episode of our four part series on artificial intelligence. It’s a great interview to bridge us into our next series, which will be on customer experience. Today, we have the pleasure of speaking with KayCee Murray who is the SVP of Information Technology at Numerica Credit Union, where she oversees digital banking, web development, technology infrastructure and business intelligence.
Eric: 00:30 Most recently, KayCee led Numerica into the future of digital banking by rolling out its Alexa voice banking assistant which is a move that dubbed Numerica as a pioneering institution by the Financial Brand.
Eric: 00:42 KayCee, welcome to the show today. Why don’t you give us a little background as to yourself, Numerica, and what you’ve been working on the last couple of years.
KayCee: 00:50 Sure thing. I’m the Senior Vice President of Information Technology at Numerica Credit Union.
KayCee: 00:55 Numerica is based in Spokane Valley, Washington. We have the privilege of serving over 145,000 members in North Idaho, Eastern Washington, and Central Washington. We’re dedicated to enhancing the lives of our members, helping them fulfill their dreams, and building the communities we serve.
KayCee: 01:11 The way I get to do that is to make it easier for our members to interact with their money and access their money when and how they want.
KayCee: 01:19 Some of the stuff that we’ve done- We’re always pushing on mobile banking and online banking with new features. Trying to align the features between the two and make it a little easier for our members to use.
KayCee: 01:30 Most recently, we added voice banking with Alexa.
Eric: 01:34 That’s fascinating because I think there’s this sort of drive with voice assistance to see what kinds of things they can do.
Eric: 01:42 We’ve seen Google try to order food or make reservations based on that and the banking sector has been something that I think has ventured into this and you were sort of the first.
Eric: 01:54 I read some articles and it looked like in the beginning, it was relatively slow adoption but it seems like that’s picked up over the last year. Is that correct?
KayCee: 02:02 Yeah. It has picked up some. Part of the reason I think for the slow adoption is partly because there was a lot of information coming out about the security on Alexa and that’s always a concern that we definitely have when we’re talking about banking and finances. Security is number one for us.
KayCee: 02:20 The other thing, too, I think as people just get more comfortable with the technology, you get more users and so we’re starting to see that as well.
Eric: 02:26 It also sounds like you’ve had incredible growth in just customers. I saw a number of 110,000 customers and at that point in time, there were about 100 people.
Eric: 02:36 Little under a year later, you had about 145,000 members. But the user base had now moved to about 1,000 people using that voice assistant. Are those correct numbers?
KayCee: 02:50 The 1,000 is probably a little bit high. We’re still working our way towards that number but we’re definitely on our way there.
Eric: 02:54 Through this path, give us an idea of the growth that you’ve had in those numbers because that’s still a pretty big percentage-wise growth.
KayCee: 03:06 Right now, we haven’t really pushed too hard except through social media as kind of the primary way that we’ve been doing a lot of our advertising as well as having some local business journals and stuff highlighting what we’ve been doing. That is one of the ways that we’re getting members more involved.
KayCee: 03:26 One of the biggest things, I think, as far as setting up the account, is a little bit of you have to do some work. You have to enable to skill on the Alexa app and I that, I think, is always going to be a little bit of a deterrent just because you have to work through that.
KayCee: 03:42 But one of the things that we did to make it easier and one of the things that really slowed down our implementation and took a lot longer to develop is that I was adamant that our online and mobile banking passwords and authentication is what we needed to use for Alexa so a member doesn’t have to get a whole new username and a whole new password to set up their account.
KayCee: 04:02 We wanted to make sure that it was as seamless and integrated for our members as possible. I think that has really helped as well so they know that they already have a username and password for us and it’s going to work on all of our platforms.
Eric: 04:15 Are you just working with Alexa at this point in time? Or do you have plans to branch out into, obviously, Google is the other voice assistant that is quite competitive.
KayCee: 04:24 Yes. I have been anxiously waiting. We work with two partners in particular. Three, really, I guess, in particular. We work with Symitar, Jack Henry Company. We work with BIG which is the Best Innovation Group.
KayCee: 04:39 Between those two, we really are working to also put Google in play. I would love to have that by the end of the year as well as add some additional features to what we already have with Alexa.
Eric: 05:00 What are the features that are currently available through Alexa and the voice assistant?
KayCee: 05:06 Probably one of the most popular features is just what’s my balance? What’s the balance on my checking account? What’s the balance? Tell me about my loan. It’s just giving account information. That’s probably one of the more popular features.
KayCee: 05:19 Another feature is that you can actually transfer money between your checking account and savings account or make a loan payment from your savings or checking.
KayCee: 05:28 Right now, we don’t have anything that allows you to send money outside of Numerica but we do have the ability to, like I said, make your loan payment, make your credit card payment, and get transactional information.
KayCee: 05:41 If you ask Alexa what were the last five transactions, they can give you some history on what you’ve done.
Eric: 05:46 Does this play into a future strategy with open banking? You mentioned that, right now, you can only pay a loan or move accounts within Numerica.
Eric: 05:58 Once the open banking initiative sort of opens up, or hopefully does at some point in time down the road, do you see that as part of your strategy? Are you thinking that far in advance?
KayCee: 06:07 I don’t know that we’re thinking quite that far in advance. Right now, the two big pieces that I’d like to add is really bill pay so being able to pay a bill that you’ve already set up within bill pay so that you can say, “Alexa, ask Numerica to pay my utility bill.” And we’re working with our bill pay vendor to do exactly that.
KayCee: 06:27 The other one, too, is working with our mortgages. We sub-service our mortgages so those aren’t on our core system and aren’t quite as accessible through the Alexa skill yet. That’s something that we’re working our way through.
KayCee: 06:40 Longterm, though, it would be great if you could send your money to other institutions, other FIs, or just people. Do a P-to-P payment.
KayCee: 06:49 There are some additional security things that you have to be concerned about with that.
Eric: 06:54 Sure.
KayCee: 06:54 The ability to get the money back if it weren’t done properly.
Eric: 07:00 Absolutely. In a recent interview with the Financial Brand, you had mentioned that the voice banking, or Alexa banking, had done exactly what you wanted it to do.
Eric: 07:10 What were your initial goals when you looked at implementing this and what did you mean by done exactly what you wanted it to do?
KayCee: 07:17 There’s a couple things that at Numerica, like I had mentioned earlier, that we really strive for.
KayCee: 07:22 One is enhancing the lives of our members and making banking as easy as possible. That was the number one goal. Give our members a way to interact with their money. One more way that they can do it on their terms and their time.
KayCee: 07:34 We don’t have a traditional IVR. The phone system can actually give them their balance without actually talking to someone but we don’t have a traditional IVR because it’s something that we realized was kind of a dying technology. So we moved a couple years ago to end that technology and just take that out of play.
KayCee: 07:53 But we still wanted to give our members something like that but that would be going towards something that is a growing technology. And, so, we started looking into voice and looking at our options there.
KayCee: 08:03 The other thing that this did is it helped our members see that we were really pushing forward on technology. We don’t have the budget of a Bank of America or a Chase.
Eric: 08:11 Right.
KayCee: 08:11 As far as technology goes. But that doesn’t mean that we can’t provide a lot of those same services by making really smart partnerships with others.
KayCee: 08:18 So that we were able to tell our members that, yes, we, too, can do this.
Eric: 08:22 When you went down this road in putting this strategy together, did you have an idea of the average age of your members?
Eric: 08:41 The reason I ask is I just went and bought my mother and father a Google Home. Set up the Google Home and the next day, my mother goes, “Hey, Gigi.” And I’m like, “Mom. Mom. It’s Google.”
KayCee: 08:51 We actually looked at our membership a little bit but we also know that some of those traditional thinkings as far as mobile banking and whatnot don’t actually always skew younger like we thought or that they initially did.
KayCee: 09:05 We’ve seen our membership of all ages start to really utilize mobile banking and to use some of our digital services.
KayCee: 09:12 Like you, I have my parents set up on Alexa. We have Alexa at our house and she’s very integrated in our house as well. I also have my mother-in-law. She did the same thing where immediately she says, “Alyssa. Hey, Alyssa.”
KayCee: 09:29 But it’s also interesting to see as they get more used to it, the more uses they actually use their voice assistance for.
Eric: 09:38 Absolutely.
KayCee: 09:38 So I do think it’ll start to span more generations.
Eric: 09:42 Well, I think one of the statistics that I saw in one of the interviews that you gave was about 70% of your customer base is using mobile banking which is a little bit higher than industry standard but it looks about two thirds, so about 65-66%, are most of the stats I see. It’s obviously increasing and I agree with you.
Eric: 10:02 One of the things that you also speak about in one of your interviews was that you had abandoned one of the features in favor of-
KayCee: 10:11 Yes.
Eric: 10:11 Some customer experience. Can you give us a little idea of what happened with that and why you decided to abandon a feature?
KayCee: 10:18 Sure. As we are going through our testing process, we had probably about 15 employees testing the skill. We have kind of a script to go through each different activity that Alexa could do.
KayCee: 10:34 Initially, we had a piece in there that it would allow you to tell Alexa that you were going to be traveling so that way you wouldn’t run into any issues with your credit card in that area.
KayCee: 10:45 But when we stared going through the process, it was not a smooth transaction. It was kind of a lengthy conversation with Alexa. She would often kind of get tripped up with what you were saying and it seemed like with probably five different testers on that just one feature that we couldn’t successfully repeatedly get it to just be smooth, for the member experience.
Eric: 11:12 Sure.
KayCee: 11:12 Because of that, we really looked at it and thought if we’re sitting here extremely frustrated and we know what’s going on and we know that this is in test and we’re making little changes to make it better but it’s still not better, how valuable is this going to be to our members?
KayCee: 11:30 We don’t want them to come into a brand new skill with a brand new voice assistant and just be put off by the whole thing.
Eric: 11:48 Were you dealing with BIG, the group that had sort of developed the skill, in, I guess, manipulating or using the voice assistant to do what you needed it to do?
KayCee: 12:01 So we actually worked both with Symitar and BIG on this. And so Symitar had given us kind of the script of, hey, try these things. We would try those things but we would also put it in our own voice.
KayCee: 12:11 We had actually coached all of our testers to say, hey, this is generally what you’re trying to test but don’t just read it verbatim. Make sure you think about how would you ask this question.
Eric: 12:21 Right.
KayCee: 12:21 So that you had multiple different iterations of the same type of thing. Through that, we learned how to make sure that we understood what, you could in through your Alexa app and see what Alexa heard.
KayCee: 12:35 We would go back with Symitar and Big and say, “Alexa heard this but we were asking this and this is pretty consistent. Can we change some stuff in here? Can we make Alexa listen for this?”
KayCee: 12:44 We also went through the process as were doing that, we realized Alexa is talking a lot. As you use your Google Home, sometimes you just want them to stop talking.
Eric: 12:55 Right.
KayCee: 12:56 We realized that some of these transactions were taking too long because she’s giving you so much information and you didn’t need that much information. You just needed an okay or a yes and to move on.
KayCee: 13:07 We really had to go back and kind of rework our own scripts.
Eric: 13:10 So if someone else were going to do this, or another institution we’re going to do this, would you tell them to go through more testing than you? Less testing? And how long was that testing time to make sure that the skills worked the way that they did?
KayCee: 13:25 I think the testing time that we did was actually pretty good. With Amazon’s encouragement, we did a whole lot more testing than I would’ve liked.
KayCee: 13:34 Basically, that saying, we didn’t get our skills certified on the first or second or even third time. Amazon is very particular about the skill and there was also some newness for Amazon with what we were doing.
KayCee: 13:47 First of all, they’ve never worked with a partner like BIG that was making skills for other people. They’d never done a lot with banking skills.
KayCee: 13:56 Sometimes the rules Amazon had in place didn’t make sense for the Alexa skill for banking. For example, they had a rule that you always had to have a question to Alexa. But that didn’t make sense when you were in the middle of a transaction.
KayCee: 14:09 For instance, you would say, “Alexa, ask Numerica to transfer five dollars from checkings to savings.” Initially, Amazon had an issue with that because you weren’t asking it to do something.
KayCee: 14:20 And, so, we had to go through a lot of iterations with Amazon to say, okay, these are the rules that we have in place but these are now documented exceptions so it’s okay that our skill does this.
Eric: 14:30 Are there any other things that you would tell someone from lessons learned or advice to other institutions that are looking to implement voice assistance in banking?
KayCee: 14:42 I think the biggest lessons learned is going through that certification process. It was very valuable because Amazon picked up a couple things that were problems that we wouldn’t have caught otherwise.
KayCee: 14:54 The way they did that was by going through our documentation. They require quite a bit of documentation that is going to be available to your members, your customers. And they went through that documentation line by line and made sure everything was accurate.
KayCee: 15:07 And we did stumble into a couple issues, so we did go through that. I would just encourage, in that process, to just be patient. It’s a little bit frustrating because you- I don’t know how everybody else would feel but I wanted it so bad and I wanted it to be there so quickly that it felt really long and excruciating going through it. But it was a valuable process.
KayCee: 15:28 The other piece I would say is exactly like that feature we took out, make sure it makes sense for your members. Make sure you know what you want it to do and it’s a good experience.
KayCee: 15:40 We certainly did not want to go through all this effort to have people not like it or not want to interact with it or just be put off by it.
Eric: 15:47 On that point, are you seeing an increase, a regular increase in usage?
KayCee: 15:51 We’re seeing small increases. They’re not drastic increases. I’d say the one thing that we see increases in is typically tends to be what’s my balance.
Eric: 16:02 Sure.
KayCee: 16:05 It’s funny because that one’s probably the easiest thing to get whether you are logging into your mobile app or online banking or using this. But that one seems to be probably the most common use. Just what’s my balance?
KayCee: 16:18 I think one of the nice parts about Alexa is that it’s a really easy way to get your balance.
Eric: 16:23 Outside of Numerica, as you guys have been sort of a leader, where do you see this industry going? Where do you see this going passed sort of the bill pay side of things that we talked about in the next year and a half? What do you see the big next steps?
KayCee: 16:37 The big next steps probably go towards the open banking piece that you had mentioned earlier. You want to make it easy so people can get their money to whoever and wherever they want it to be.
KayCee: 16:47 The other one that I think is really going to be an interesting play in here is how Apple comes in and how Apple plays. Because on our mobile side, we see that we still have more Apple devices accessing mobile than we do Android devices. I think that one is definitely going to be interesting. Especially as they’re pushing to do their new credit card and that type of stuff right now.
Eric: 17:10 Yeah. I do too. The battle between Siri, Alexa, and Google is going to be interesting in how that plays out. I’m hoping that they all start to play well together and that it’s not sort of a competition between them but we can all integrate it into the same kind of usage.
Eric: 17:25 Because, otherwise, I think we run into a situation where, you sort of briefed on earlier, is the passwords side of things. Setting up a complete new set of passwords, logins. It’s so frustrating for everyone to have to try and remember that. So I agree with that.
KayCee: 17:42 It’s frustrating, too, for me. I’m a big Android user. I like a lot of my Google stuff but, like I said, I have a lot of Amazon stuff and I have a lot of Google stuff.
KayCee: 17:54 I wish they would play a little bit better together. In the meantime, I like that they’re pushing each other and that they have a little bit of competition between them because I think they are pushing each other pretty hard to both be better.
Eric: 18:04 Are there any new initiatives you guys are working on outside of the bill pay with the voice assistant?
KayCee: 18:11 With the voice assistant, that’s really the next steps. I think that will keep us busy between the bill pay side and adding Google. I think that will keep us busy through the end of this year and probably end of the first part of next year. Then we’ll kind of re-evaluate from there.
KayCee: 18:26 We are working right now towards doing a complete upgrade of our consumer banking side. Both of online and mobile. That will probably play a little bit into this but also takes a lot of our resources away from the voice for a little bit as we go through there.
Eric: 18:43 Absolutely. Well, KayCee, it’s been a pleasure. It’ll be fun to watch where you guys go with this technology and not only that but as an industry. I think it’s going to be fascinating to watch.
Eric: 18:54 Really appreciate you taking the time today to talk with us.
KayCee: 18:57 Thank you so much for having me.
Eric: 19:06 On our next episode, we’ll be speaking with a very familiar voice.
Richard: 19:09 I am not anti fintech whatsoever. I think competition is good as long as it is fair. There was a time, about five years ago, I actually felt that the fintechs may take out the banking industry and I took a trip out to Silicon Valley and learned quite a bit about what the fintechs are doing and I can say with all certainty, I think 95% of the fintechs will fail. But the 5% that do survive will have a huge impact on how we do banking.
Eric: 19:41 Yes, that was Richard Hunt, who’s CEO of the Consumer Bankers Association. We’ll be speaking with him on our next episode of the Finance Frontier.
Eric: 19:54 Since we depend on listeners like you to help us spread the word, we’d love it if you’d take the time and post a review of our podcast on iTunes.
Eric: 20:01 Until next time, I’m your host, Eric Hathaway.
Love the show? Want to be featured as a guest? We’d love to hear your questions and comments and welcome guest recommendations. Our producer Sara Tatnall can be reached at sara.tatnall [at] zootweb.com.