Alexa, don’t tell me my bank balance

By September 17, 2019Ethereum
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A year after TD Ameritrade marked an industry first with voice-activated stock trading via Amazon's Alexa, the US online broker is taking another step by bringing Google Home into the fold.

The small print of the Google Home announcement, however, reveals that the latest move is not quite so ambitious as the first. Google Home will share information on clients' portfolios and market movements, but it can't be used to actually buy and sell stocks.

Vijay Sankaran, chief information officer at TD Ameritrade, says the slimmed down capabilities of Google Home were partly down to the firm's experience of how clients used Alexa, Apple Business Chat and Facebook Messenger.

The first version of voice-based trading was: “to demonstrate whether we could, to some degree,” he says, adding that “any time you’re an innovator, sometimes you try these things and you learn that’s just not what your consumer wants”.

The largest volume of requests to Alexa has been for market updates and quotes. Alexa has proved a minority sport overall, with voice queries accounting for less than 10 per cent of TD Ameritrade' s client interactions.

It's not just TD; Bank of America recently revealed that just 13 per cent of the interactions with Erica, its digital assistant, were through voice.

Zor Gorelov, whose company Kasisto has created “conversational AI platforms”, like Erica, for more than a dozen banks, says his clients are generally cautious on voice.

For one thing, they doubt their customers' appetite to engage over the platform. “It’s one thing for a person to add a toilet paper to an Amazon list, it’s another thing to talk to a bank about your mortgage,” says Gorelov.

Then, there are concerns about authentication. “You don’t want somebody to walk into your kitchen and start talking to Alexa about your finances,” says Gorelov. “But if there’s friction — ie a pin code to your mobile device — then you might as well go to your mobile device and check [your finances] there.” Voice biometrics offers a potential solution but the technology has not reached the mass market stage yet.

Gorelov says another big worry, especially for banks in the US, is where the voice data goes and how it is stored.

At TD Ameritrade, Sankaran says they have worked with Amazon to understand “every step of the transmission” of data and have hammered out agreements on how the data are stored and destroyed.

After launching into a plethora of platforms in the past few years, TD Ameritrade is now taking stock and could decommission some. Sankaran has no regrets about closing some projects down.

The platforms typically only cost a few hundred thousand dollars to get up and running, and help TD Ameritrade to attract software engineers who want to work on new and interesting projects.

Moreover, says Sankaran: “There’s a progressive glow to those companies that are willing to experiment, willing to try new things, willing to expand their technology.”

Quick fire Q&A

Company name: Meniga

When founded: 2009

Where based: HQ in London, with offices in Reykjavik, Stockholm, Helsinki, Warsaw, Barcelona and Singapore.

CEO: Georg Ludviksson

What do you sell, and who do you sell it to: Data-driven digital banking solutions designed to drive customer engagement and develop new revenue streams for banks worldwide.

How did you get started: Meniga was founded in Iceland at the height of the financial crisis to help people lead better financial lives.

Amount of money raised so far: €27m

Valuation at latest fundraising: N/a

Major shareholders: Industrifonden, Velocity Capital, UniCredit, Nordea, Swedbank, Frumtak Ventures, Íslandsbanki, Kjölfesta

There are lots of fintechs out there — what makes you so special: Our global mission is to improve people’s financial literacy and eliminate financial problems by creating a mutually beneficial ecosystem for people, banks and businesses.

Further fintech fascination

Follow the money: Affirm, an online consumer finance specialist, wants to raise up to $1.5bn in debt and equity, according to TechCrunch. The company recently raised $300m at a valuation of $3bn, in a funding round led by New York venture capital firm Thrive Capital. TechCrunch says that, after a year of big fintech financing rounds, it expects a wave of initial public offerings as soon as next year from companies such as Affirm, Robinhood, Stripe and SoFi.

New frontiers: Deutsche Bank has signed up to the financial services industry’s biggest blockchain project, the JPMorgan-led Interbank Information Network, reports the Financial Times. The project aims to speed up payments and transfers by making information about them available to every bank in the payments chain. Ole Matthiessen, head of Deutsche’s cash management business, said that it would help the bank to improve customer satisfaction.

New frontiers (2): Also getting on to the blockchain this week is Spanish bank Santander, which has issued what it says is the first end-to-end blockchain bond. The $20m bond, which carries a coupon of 1.98 per cent, was issued on the Ethereum blockchain network, reports Cointelegraph. Santander says that the high degree of automation dramatically reduced the number of intermediaries required.

Crypto chronicles: Facebook takes its efforts to launch its Libra cryptocurrency to regulators this week. Libra representatives are due to meet officials from 26 central banks, including the Federal Reserve and the Bank of England, in Basel, says the Financial Times. At a meeting of EU finance ministers in Helsinki at the weekend, governments expressed “strong concerns” about how Libra and other digital currencies would interact with the rest of the financial system.

Follow the money (2): Ping An, one of the world’s biggest insurance companies, and savings and investment marketplace Raisin, have invested in Joonko, a financial portal designed to help people choose savings and protection products. Ping An has invested via its Global Voyager Fund, which invests in start-ups. The Raisin investment is a rare example of one German fintech investing in another, says FinExtra.

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