Consumers are increasingly using their mobile and connected personal devices for financial services – enabling convenience and creating more data that needs to be managed and secured by financial institutions. The Internet of Things (IoT), made up of all of these connected devices, doesn’t just create new opportunities but new ways of communicating and transacting online and additional challenges, such as security and privacy.
Financial institutions are known for collecting massive amounts of personal and behavioral data. With the IoT offering even more data points, financial services must improve their technology in order to more accurately process, analyze and react to the data they receive.
Services that are able to do this quickly and adapt to the new market will be able to:
- Differentiate themselves in the market
- Provide consumers with more streamlined services, increasing customer satisfaction and loyalty
- Make workflows more efficient and digitalized, reducing costs and increasing revenue
Financial institutions, such as banks, have been using data as currency for years already so they should be well positioned to leverage mobile and connected devices to make banking even easier.
If you are at the early stages of research and development, looking for products and technology in the IoT will improve your services. Here’s a few examples that might give you some inspiration.
Wearable Contactless Payments
The contactless payment market is expected to reach $17.56 billion USD by 2021, proving that contactless payments (e.g. Apply Pay, Samsung Pay) are becoming part of every consumer’s day-to-day experience. Contactless payments involve the use of near field communication (NFC), radio-frequency identification (RFID) or magnetic secure transmission (MST) to transfer data (i.e. the individual’s money) from one place to the next.
With the ability to pay for products from their smartwatch, smartphone or smartwallet, consumers are provided with an experience that is faster, more efficient and more convenient. Who wouldn’t want to be part of this awesome customer experience?
Wearable contactless payments help financial institutions stand out in their market. For example, contactless payment technology company, Kerv, has created a product that does just this and defined them as a unique player in the payments market. They have created a ring which, users can wear, that allows them to make payments on the go. Check out the video below to see it in action.
Financial Advice Based on User Behavior
Financial services can use data collected from their customers to serve personalized financial advice based on behavior. With added technology, such as wearables being entered into the mix, all of this data really helps to create a picture of your customers.
Let’s discuss the use of smartwallets. Smartwallets are designed to monitor an individual’s financial activity for seamless and efficient consumer experiences. Some can monitor where people are and what cards they are using in each location. With a sync to their mobile banking app, consumers could have accurate data on everyday spending and banks can offer financial advice based on specific data points.
Consider the following services banks can apply with increased data from connected devices.
- Automated financial advisers that help with an individual’s stock portfolio and make recommendations on stocks
- Digital wealth management advisory services offered to lower income markets
- Automated insurance underwriting
- Financial communities where users can pool together to give loans to each other and share investments
- Better fraud detection based on an individual’s purchasing patterns and comparing purchase location to physical location of the individual
Financial Rewards for Connected Users
With an influx of consumer financial data, financial institutions can revolutionize their reward systems to give rewards based on interactions and user behavior data. This increased personalization will lead to better customer experiences, differentiating your financial services to your competitors and increasing customer loyalty.
Companies like Apple and Starbucks are doing a great job of this. Apple, for example has teamed up with some great retail companies in order to offer customers discounts based on how many times they use the service. One of the first companies to team up with Apple was Walgreens. They released a series of videos featuring how the payment technology would work.
The Internet of Things is also enabling financial services to provide location-based rewards and discounts in real-time. The technology can identify offers from nearby merchants that become active as soon as a user swipes their debit or credit card or uses their device for payment, leaving little or no work on the side of the customer.
On-the-Go Credit Checks and Document Signing
Credit checks are an integral part of day-to-day financial institutions, needed for loan, insurance, credit card or mortgage applications and other services like opening a bank account or applying for an overdraft. Regulations and a need to streamline workflows are big drivers for moving transactional exchanges like these from paper to digital.
Imagine a world where credit checks can be conducted with information entered into an app and a contract can be sent and signed by a customer while they are anywhere in the world. A consumer will find this process easy to use and can get approval on loans and mortgages quicker than ever, while financial institutions benefit from increased customer satisfaction, speed of services, reduction in paper workflows and, generally, significant cost savings.
One company that is doing a great job of this is Touchtech Payments. Touchtech’s technology can be integrated into your financial services app to provide eSignatures through mobile. Their technology is fully compliant with eIDAS and PSD2 regulations, which allows users to easily sign in with an ID and complete whole financial interactions (like getting a mortgage) on-the-go.
The Possibilities Are Endless
These examples are just touching the surface of the great things being done with connected devices and data in the financial services sector. As showcased above, collecting and analyzing data insightfully allows you to expand and customize your service offerings, making your customers happy and helping you stand out from the competition. It’s clear that the IoT and all of its connected devices and associated data can offer significant value for the financial services industry.
If you’re thinking of implementing a unique solution like any of the above for your financial services, security must be built in from the start. PKI and is a tried and true option for authenticating and encrypting communications between users and devices, and can play an essential role in many of the examples discussed above. Talk to use today to learn more.