Will User Names and Passwords Go the Way of Thermal Fax Paper?

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Rob Chrisman's Perspectives
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Moore’s law is the observation that the number of transistors in a dense integrated circuit doubles approximately every two years. He later revised it to every 18 months as technology advanced. There is no correlation in mortgage banking, or in evaluating risk, but perhaps there should be. STRATMOR’s clients are working particularly hard to reduce risks when it comes to credit, operations, biometrics and banking procedures. 

For example, bankers and lenders should note that Samsung has partnered with three of the biggest banks in South Korea to introduce voice command banking, enabling bank customers to execute financial transactions through cell phones. Under these partnerships, the South Korean banks’ customers will be able to use a virtual assistant included in Samsung’s Galaxy S8 cell phones. That assistant will issue voice commands for bank transactions. Customers will even have the ability to use voice commands to exchange currencies it appears. 

Residential lending isn’t there. Yet. Samsung’s deal with the South Korean banks represents the next step in voice command banking through a virtual assistant. In the U.S. Capital One introduced a partnership with Amazon within the US last year through which Capital One bank customers can check their account balance, get information on recent transactions, and even pay bills by issuing voice commands to Amazon Echo’s voice assistant, Alexa. 

“Not so fast” say the IT staffs of every residential lender. Introducing voice command banking through mobile phones requires an additional layer of security. To provide that extra security, verbal commands for banking transactions will utilize the Samsung Pay app and Samsung Pass (an authentication program that relies on biometrics to verify users’ identities). In this case, a user’s identification is verified through iris scanning. 

As more and more mobile phone manufacturers incorporate biometric technology into their products, it not only will make it easier for the lending, servicing, and banking industry to expand the capabilities of voice commands, but will also give customers more peace of mind when it comes to utilizing such services. According to data from biometric security company HYPR, there are already more than 2 billion mobile phones around the world capable of various biometric verifications. Make your principal and interest payment through a phone that looks at your eye? Not so far-fetched. 

STRATMOR’s clients are watching developments in this country. Wells Fargo for instance, has been actively testing mobile voice command banking with a group of its employees, with plans to introduce it soon; Citigroup is already utilizing fingerprint, face and voice recognition within its apps; and US Bank has been testing voice commands for its Visa mobile app. 

U.S. banks are not just limiting the things customers can do with mobile voice commands to making payments or checking their balances, but are also trying to determine what other services customers would likely embrace. In the case of Wells Fargo, it is incorporating sophisticated search functions within its voice recognition technology that would allow customers to ask its app how much it spent on categories such as eating out at restaurants during a specific billing period. This level of detail will most likely push the envelope with other banks’ offerings. 

The good news for non-depository lenders and smaller banks is that, as in many other instances, the industry’s largest players are the ones investing the time and money into determining which functionalities customers will embrace. So, by the time such apps are adopted on a widespread level, third party providers should also be offering the same capabilities to interested community banks.