Boy, can that computer talk . . . !

New ways to communicate with your bank will rely on familiar devices - like the phone - reports Edwa

Banks are not the only businesses using technology to communicate with their customers, but they are some of the most enthusiastic and, arguably, most successful. What gee-whizz gadgetry do they have up their sleeves?

Technology has not been an unqualified success, as far as most customers are concerned. Too often it's more of a barrier than an enabler. Touch-tone hell has become a near-universal experience - pushing doggedly on through four levels of touch-tone menu, only to find that you're not where you wanted to be. So you opt out to talk to a human and spend the next 10 minutes being thanked for your patience by a recording.

Subsequent technological leaps have not always lived up to their promise, either. WAP mobile/internet technology seemed about to become part of our lives, but it has proved slow and cumbersome and has not, so far, spawned useful applications for banks or anyone else.

The big mobile surprise has been short messaging services (SMS). That is cumbersome too, but its funky abbreviated messages have become hugely popular with younger mobile phone users, and it won't be long before financial institutions find things to do with it.

There are still people who can't or won't use a mobile phone, however. And the most intriguing innovations in the pipeline rely on appliances that are familiar to all - the telephone and the television.

Being able to speak naturally to a computer has been something of a holy grail for those who work on these things. It has been the subject of IBM's longest-running continuously funded research project - for more than 35 years. Latterly it became possible for the computer to recognise spoken words, but only if it was "taught" the speaker's voice.

But now, at last, you can talk to a computer on the phone without any teaching, to ask questions and give commands that have value in a natural speaking voice. There are two ways of doing it. The first, where the computer remains in control, is called "directed dialogue". It asks very specific questions to which you must give specific answers - like "what is your account number?"

IBM now uses a voice-activated internal directory dialler, which allows callers to connect with any of 200,000 staff in 200 locations. They dial a single number and speak the name and location of the person they want. It may not sound very impressive, but it's a big achievement for the computer to recognise a large vocabulary of names, and to be robust and flexible enough to deal with different accents and pronunciations.

More flexible still is the "natural language application", which is designed to cope with everyday patterns of human speech. Here, instead of having to be very specific, the customer can say "I want to move some money . . .", "May I transfer . . . ?" or "Can you shift . . . ?" and the computer will understand and respond. That's because it recognises a large vocabulary of key words and phrases. What's more, you can interrupt it - "barge-in", as they say - without throwing the system.

Financial institutions are only just beginning to wheel out this type of system. US fund managers T Rowe Price recently installed an IBM speaking-computer system which gives customers account information and even allows them to buy mutual funds. It's faster and cheaper, says the firm, adding that the customers like it too. Improvements in computer voice quality make it almost like talking to a real person. Expect something similar from your bank before too long.

The US will inevitably lead the UK with new speech applications but with interactive digital television (iDTV) it's likely to be the other way around. UK iDTV households are expected to exceed PC/internet households within a relatively short time. Using digital TV as a customer channel doesn't add much to the internet. But iDTV adds another dimension, which financial institutions will find helpful for connecting with customers.

Using a standard TV remote and a telephone, viewers can click on an interactive advert to see more details, get quotes or place an order. This self-service option can be supported by video clips. More alarmingly, perhaps, iDTV makes possible one-to-one advertising, with advertisers targeting individual householders by viewer profile. You'll be relieved to hear that an opt-out lets you watch a programme without having to see any ads at all.

The whizziest feature of iDTV, and the one that has the institutions really excited, allows what they call "assisted sales" of more complex products like life insurance.The viewer can phone a video call centre to see a live agent on the screen. The agent can explain, advise and help the customer fill out the form. It's cheaper than sending somebody round and leaves the customer in control - they can switch off at any time. And, as enthusiasts point out, it represents a return to the basic human interaction, with technology enabling but not getting in the way.