Mobile Banking's Future to Include Voice Recognition, Wells Fargo's Ellis Says

Steve Ellis will never forget the day it dawned on him that people would want to bank on their phones. "I was walking in San Francisco, I was on my BlackBerry and I walked in front of a bus," recalls Ellis, who is executive vice president and group head of the Wells Fargo Wholesale Services Group, which includes the Enterprise Payments Strategy, Technology Services, and Treasury Management groups, along with commercial loan services, customer analytics, marketing and communications, risk management, and mobile and social media strategies.

"The guy was nice enough to stop and the cop gave me a warning," he says. "I said thank you and looked up and realized everyone was on a phone. I thought, these phones have browsers, they're probably as powerful as the first computer ever used, if not more, why wouldn't people bank with these things? It's so obvious." He approached his boss with this idea and won a $5 million budget to build mobile banking apps for business customers.

Ellis put together a team to create a mobile banking app for corporate clients called CEO Mobile that debuted in 2007 (he also launched the bank's online version of CEO Mobile in 2000). Wells was the first bank to have a product of this kind to let business customers do things like approve wire transfers while at an airport or in a cab. The app allows for mobile check deposit (useful for clients who do product deliveries and receive checks on the road) and for handling T&E on the road -- about 30% of commercial card customers use it.

Today, Ellis, who got pulled into the Wachovia/Wells Fargo merger integration for a few years, is back managing digital offerings for corporate clients of the $1.37 trillion San Francisco bank, with help from a team of 6,700 employees, including 2,100 technologists, around the world, with concentrations in Charlotte, Denver, Los Angeles, Minneapolis, San Francisco, and Hyderabad, India.

"We build most of our own stuff because we don't want to rely on a third party vendor," he says. "Not that we have anything against third party vendors, we use them in a lot of places, but this is a world where people adopt something and it's cool for a couple of months, then they say, can you do this, can you do that? You can be much more flexible and responsive if you're building your own stuff." Wells Fargo does a lot of customer testing and prototyping, and bases 80% of its technology on direct feedback from customers that it gleans from its 26 advisory councils and 12 payment conferences, Ellis says.

During a recent visit, we asked Ellis mostly about the future of corporate mobile banking technology.

A challenge and trend Ellis's group is working on is the need to accommodate the many devices customers use and create digital banking channels in a "write once, deliver many" way. CEO Mobile is currently designed for smartphones, but plans are to deliver it to iPads, iPad Minis, Surfaces, Kindles and even Wiis. "We have people who use Wiis to access information and move money," he observes. "It wasn't quite built for that. What do you do when you're playing a game? 'Oh wait a minute, I've got to approve a wire.'"

Ellis's team is using HTML5 to create web pages that can recognize which device they're being read and automatically reformat for that device; it's rolled out a few already and plans to launch more in the second quarter of 2013. "What we learned on the tablet pretty quickly was that thousands of customers were using it to get to our website, and our website wasn't optimized for iOS," Ellis says.

Ellis has been testing and has high hopes for voice and speech recognition - voice recognition for authentication and speech recognition to let people conduct banking transactions by speaking rather than typing.

"My Nirvana is, I pick up the phone and say 'this is Steve, I need to move some money to my client, take it out of my primary checking account,' and by the time I've got done saying that, the bank has authenticated who I was, conducted the transaction and sent a response back," he says. "The biometrics to really know who somebody is, is important for all of us, not just business customers but consumers."

The bank already uses voice authentication in its wire room, to flag known "bad actors" who have committed fraud in the past, by comparing incoming callers against a database. But "almost all people are good, that's just how it is," Ellis says. One curious thing he's learned is that voice recognition works better on a cell phone than on a landline, perhaps because of the digital nature of the cell network.

"The voice has always been exciting to me," Ellis says. "If you can come up with a reliable way to use someone's voice to authenticate them, not just for commercial customers but consumers, you can use that in a wide variety of things. It's really hard to fake a voice." Some voices don't register properly in voice recognition, so live tests are needed and voice authentication often needs to be paired with other forms of authentication.

Fingerprints are another possible authentication option, but Ellis points out they have negative connotations. "People don't like giving you a fingerprint," he says. "Back in the 90s we were testing them with checks, and we got a huge negative reaction. Most of the time you only get fingerprinted when you get arrested, although in Japan they take your fingerprints when you go through immigration at the airport."

Companies will start testing and using facial recognition, Ellis believes. The bank has also built its own device fingerprinting, in which elements of the device itself, such as its IP address and physical location, are used to identify a user.

"We spend a lot of time on this, we use chip phones, IP addresses, location and other security elements so our customers feel safe and confident that (a) we've got their stuff and no one can steal it and (b) it's easy for them to move things, they don't have to worry," Ellis says. "If you don't have trust, what do you have? Not much."

Another large technology project Ellis is working on is what he calls a "repeatable international bank." Wells Fargo customers accessed CEO Mobile from 180 countries in the past six months, proving that these U.S. based clients travel often for work. "We want to be where our customers go," he says. "They would tell you the fewer banks they can use, the better they feel. Why would I use 20 banks to manage my business account when I can use two or four?"

The first non-U.S. country for which Wells Fargo is going to roll out its CEO Mobile app is Canada, where it already has a banking license. Next will be Europe, followed by Asia. We're making sure we understand all the bank regulations and customs of all those different countries, the privacy rules, where data is stored," Ellis says. "You have to be in lockstep with your data centers, your legal division and with the regulators."

All of this requires a generous IT budget, although Ellis declined to specify how big. "We constantly invest in the platform, we see technology as a differentiator," Ellis says. "We think we have a competitive advantage there, particularly compared to smaller companies, it's very hard for them to do things that we do."