According to a report by Cisco, there are approximately 27.1 billion networked devices globally that are internet enabled and can communicate with other devices, creating the Internet of Things (IoT). This figure is expected to more than double in the next five years, driven primarily by the consumer market. Vehicles, smart TVs, and digital set-top boxes are already paving the way of IoT for consumers. Smart electric meters, commercial security cameras, process sensors and real-time location services have already seen increased adoption rates in business and manufacturing. Traffic lights, CCTV and street lighting have all been part of many smart city initiatives around the world.
It is the continuous technological advancements in sensors, Wi-Fi, distributed computing and big data that are changing how we interpret and interact with the world around us, bringing a new era of connectivity, the Internet of Things.
For the banking industry, there are immediate opportunities in three main areas: customer experience, product development and payments.
Collecting, analysing and combining data in meaningful for each customer ways, will allow an organisation to engage its customers with highly relevant messages and advice. For example, by combining existing customer information with geolocation data, weather forecasts and partner network information, on a rainy day a bank may prompt a customer to check their tyres at the nearest cooperating fitting centre and take advantage of a special discount in case they need to change to winter tyres.
It is the intelligent correlation of different data that will allow the bank to send the right message, to the right person, at the right time and through the right channel which will in turn create a positive response and strengthen loyalty.
With IoT, understanding a customer’s behaviour goes beyond the direct interactions the customer has with the bank. Connectivity that extends to cars, household appliances, mobile applications, wearables and alarms (just to name a few) can provide insights on the preferences and behaviours of each customer. These insights can be used by the bank’s marketing and product departments to develop new, highly personalised and highly relevant offerings that truly fit the lifestyle of each individual customer and create a strong differentiator against competitive offerings.
A whole new world of payments is emerging due to IoT. Machines and electronics that place orders without human interaction (such as cars, pumps, refrigerators, meters and many more), is happening right now and it presents a major opportunity and challenge for the banking industry who is missing both the business strategy and the regulatory framework to crystallise the acceptance of those payments. It is however a matter of time, and the organisations that are already test different innovative approaches to IoT-driven payments, will have a huge advantage against their peers.
Security and Privacy considerations
IoT is opening the door to an exciting new world, but it requires the banking industry to address concerns around data security and privacy. From the technology perspective, there are already many solutions that provide increased security and authentication across the IoT ecosystem, but it’s the close cooperation between the technology vendors, the banks and the regulators that will help define industry standards, drive market awareness and unleash the potential of IoT.
If you would like to find out more about how Big Data could help you make the most out of your current infrastructure while enabling you to open your digital horizons, do give us a call at +44 (0)203 475 7980 or email us at Salesforce@coforge.com