6 Ways in Which IoT is Transforming Retail Banking Practices
retailciooutlook

6 Ways in Which IoT is Transforming Retail Banking Practices

By Retail CIO Outlook | Wednesday, August 07, 2019

With IoT transforming services across the industry, the banking sector has realized its potential and is incorporating IoT initiatives for several purposes.

FREMONT, CA: Despite a sluggish attitude of the finance sector to embrace technologies, the current advancements are gaining momentum. It is mainly the outcome of the changing socio-economic dynamics in the past few years. As such, banks are focusing on their digital technologies to help them compete with fintech startups and to maintain an edge over the ‘challenger' banks. The organizations providing retail banking services are focusing on faster payments, enhanced operability to support open banking initiatives, and more responsive mobile services. However, despite an interest in technologies such as artificial intelligence (AI), internet of things (IoT), and robotic process automation (RPA), the financial institutions have not been able to leverage the potential of the technologies. IoT, in particular, has immense possibilities for retail banks:

Wearables in Banking

The growing ecosystem of devices and the low prices associated with the wearables have led to their widespread adoption in the banking sector. Several banks provide applications for wearables such as FitPay and Apple Watch, which is working with the Bank of America. Some of the banks have already launched their devices wearable bands coming from Caixa bank and Barclays releasing bPay wearable contactless payment solutions.

Check out: Top Retail Banking Solution Companies

Connected Cars and Banking

Connected cars have not just the potential to improve customer relationships, but also improve revenues. But smarter vehicles have the potential for banks too. For instance, Idea Bank has introduced a fleet of cars that are customized with an ATM and an integrated security deposit box. Instead of the customers visiting the banks, the connected car systems can visit them.

Blockchain and Smart Contracts

Blockchain's ability to maintain a record of authenticated transactions are often debated in financial services and beyond. However, some banks are already using the technology. For instance, Wells Fargo, Commonwealth Bank of Australia, and trading firm Brighann Cotton have reported having accomplished the first global trade transaction using blockchain, IoT, and smart contracts.

Smart Branches

Despite the retail branch being under threat, experts believe that smarter branches can increase customer engagement and provide them a better experience. Technology such as IoT will be crucial here too. Banks are already testing various smart devices to improve customer experience. For instance, facial detection technology can be used to judge how users interacted with space.

Personalization

With an enhancement in the customer experience services across the industry, the banking sector has realized the potential of personalization too. Leveraging wearables and the organization of customer's data, which are already available to the bank, can lead to personalized banking solutions relevant to an individual customer. For instance, Bluetooth beacons are proving an opportunity for retail banks to redesign the strategies for their underused high street branches.

Chatbots for an Excellent Customer Experience

Chatbots are also gaining popularity in retail banking. The incorporation is an affordable and easy way of automating customer service inquiries. Several startups are using the opportunity, too, such as Cleo that connects to the bank and uses Facebook's chatbot platform. There are other such instances where customers can use the platform to accomplish transactions such as bill payments and transfers.

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