When banking meets the Internet of Things – the sky is now the limit

The Internet of Things may just hold the key to the future of banking, says Jacqueline Guichelaar, head of infrastructure and service delivery for Lloyds Banking Group. With the topic of transformation dominating banking industry conversations amid the race towards a digital future, it’s clear that the Internet of Things is driving that change.

The status quo simply cannot continue and the major new force that is IoT is serving to transform the industry from the inside out, pushed by the twin drivers of heightened customer and regulatory demand.

Nevertheless, in my experience, IoT is a frequently misunderstood concept for the banking sector, and must be better engaged with if meaningful change is to take place in tandem with big data and the cloud.

Most are of course aware that IoT represents the staggering number of global connections that are resulting from the vast network of devices, wearables, vehicles, buildings and more that we interact with, and interact with themselves, 24/7 – but what I think is less understood is how it is serving to go beyond big data by making the resultant information available to other systems and networks in real-time.

It thus actually becomes a platform that captures the connectivity of the digital economy and the enormous potential for that information to then be leveraged for huge insights. Such insights in turn boost efficiency, productivity and harness improvements in customer service.

To my mind, another common misconception is that the concept of IoT remains a distant reality that may someday come to fruition; in fact, its benefits are here right now and it’s therefore high time for the industry to proactively react to its wide benefits. While the likes of the insurance and commercial property industries have embraced IoT, the financial services industry – which has remained often justifiably cautious – is only just beginning to tune in to the possibilities that could help to push it to the next level. Some have even suggested that it is helping the industry to now enter the second digital revolution.

As customer demand for a better, faster, more convenient mobile service gather further pace, and banking organisations seek out greater agility for the rapid transformation that will meet their needs, IoT is enabling the collection, correlation and exchange of mass banking data. It thus holds the hitherto unprecedented potential to provide those customers with the truly bespoke service they crave, complete with targeted, personal advice and insight.

It’s obvious to me that the sky is now the limit; IoT can create analytics-based customer rewards that boost loyalty, location-specific discounts in real time, customer cross-sell opportunities, and engaging digital experiences.

The Internet of Things enables a whole new level of personalised banking – indeed, the possibility of branches becoming equipped with sensing technology that can recognise customers as they walk in and respond to their own particular needs suddenly becomes a tantalising reality.

However, for the organisations harnessing IoT, it can also improve risk management, reduce costs, and improve operational efficiency – and the ability for banks to make better informed commercial decisions is a hugely significant one.

An example that immediately springs to my mind is that IoT is helping banks escape the perception that there is little difference between themselves and competitors. The ability to personalise services and anticipate individual needs naturally puts an entirely different complexion on that.

Hand-in-hand with the likes of the cloud and big data, IoT is set to be implemented on a massive scale, creating major new business opportunities as we continue to embrace a world that’s connected like never before. It could even serve to be the differentiator that separates the winners from the losers in the race for true banking innovation.

Change is now a must – and IoT is set to be the key competitive advantage that helps tomorrow’s market leaders set the pace.

Source: www.finextra.com