As mobile banking increasingly becomes the preferred way that consumers choose to manage their money, application features such as voice recognition and photo bill pay are on the upswing, paving the way for the future of mobile banking.

In the past year, banks and financial institutions have become increasingly more savvy with mobile for not only customer service but also as a way to cut costs. However, as mobile banking becomes more comprehensive, banks also risk losing some of the allure that mobile offers to simplify the banking experience.

“I think we are definitely seeing a trend towards voice,” said Gregory Pal, vice president of marketing, strategy and business development for the enterprise division at Nuance, Burlington, MA. “Part of what is driving that is virtual assistants that bring that type of functionality.

“The challenge is that it is already challenging on a Web site to incorporate all of this functionality and how do you do it in a graceful way when you shrink it down to a mobile screen,” he said.

Leading by example
Voice recognition is being used by a handful of financial institutions including E*Trade, ING Direct Canada and USAA to help consumers to find the information that they are looking for.

For example, USAA’s iPhone app includes a voice-controlled virtual assistant that lets clients speak requests into their smartphones. Consumers can ask questions about their spending habits, and the app will dig through the user’s account to serve up the information in a piece of text.

Additionally, ING Direct Canada is experimenting with a feature that lets clients complete banking transactions via speech.

Voice recognition is not only being used for convenience, though.

Banks are betting on voice recognition for security purposes as a way to authenticate a user when they log-in to their account via a smartphone or tablet.

Voice recognition also cuts down costs for banks since the technology eliminates the need to staff employees for phone support and puts the consumer in control for finding the information that they are looking for.

E*Trade’s mobile app

Contextual understanding
There are two types of voice recognition that banks are using nowadays, according to Mr. Pal.

The first captures the audio portion of what a consumer says and turns it into a piece of text.

The more complex second part is about natural word understanding. Instead of serving up a piece of text, the app directs consumers to the exact page in the app that matches a voice request.

For example, when consumers ask to see their recent transactions, the app moves to their account history page.

Rather than serving consumers a quick bit of information, this focus on voice recognition is more about drawing consumers into areas of the app where they can spend more time looking over the specifics on their accounts.

Despite the opportunities for banks with voice recognition, marketers also risk creating feature-heavy apps that may distract users from the original point of mobile banking: to simplify the banking experience for consumers.

“The risk that we’re talking about is that as you layer in more functionality, it becomes harder to structure and give people access to all of that functionality,” Mr. Pal said.

“The more you do, the harder that it is to complete any of those tasks,” he said.

Photo capture
Another mobile banking app feature that is likely to see a big uptick with financial is mobile photo-based features that let users quickly drop or take out funds from their account.

Again, banks and financial institutions benefit from this feature because it saves them money since mobile deposits have lower check processing costs.

In fact, research from Mitek showed that one leading bank that leveraged mobile deposit saw six percent of its consumer deposits made via mobile during the fourth-quarter of 2012. This reportedly dropped costs by 95 percent for the company versus depositing the check via a teller.

Additionally, Mitek predicts that mobile deposit has saved banks more than $100 million in costs overall.

“Consumers are coming to expect the ability to conduct transactions, instead of just checking balances,” said Jim DeBello, president/CEO of Mitek, San Diego, CA.

“Almost every bank in the country now offers mobile deposit, while just a few cutting-edge banks offer mobile photo bill pay and mobile balance transfer just became available,” he said. “These are sure to become the next must-have services for financial institutions.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York