IoT offers an opportunity for financial institutions to serve their customers in new ways and deliver seamless 24/7 banking experiences. IoT can transform how financial services provide a different customer experience and increase customer engagement at all points of the financial journey from payments, to financial management, to customer service.
However, to be as successful as possible with the IoT, financial services first need to evaluate which connected devices are right for the delivery of financial information and capabilities, and to ensure the security of interactions from these devices.
As with any new service offering, it is crucial to understand what capabilities are practical and how they can be delivered most effectively. As new connected devices emerge, financial organizations need to evaluate how customers interact with them, and if they are suitable for conducting financial tasks.
For example, when driving in their connected cars, customers may want to check their balances and initiate bill payments. At home, they may want Amazon Alexa to provide reminders to help them stay within a budget or remind them to save for a major purchase.
The end-user must be at the heart of any new service experience that financial institutions develop for IoT. With today’s information overload, irrelevant information will at best be ignored and at worst prompt customers to look elsewhere.
For financial institutions looking to add value to their services by extending existing capabilities to various devices in the IoT, the approach is the same as when evaluating which functionality to offer on a smartphone or a desktop. Start with these questions: What types of capabilities are practical for this device, and how will consumers want to access services from it?
Security must also evolve in line with the IoT. The balancing act between customer convenience and security will continue to shift as consumers demand new ways to interact with their money. However, a multi-layered approach to security will continue to be vital.
Nowhere is this more crucial than in payments. For example, if a customer wants to check his bank balance and pay a bill from his connected car, he could do so by accessing his online banking account, which already has multiple layers of security in place, via the car.
But what about payments that are initiated from a connected device outside of an existing payment application such as online banking? If your refrigerator recognizes that you are out of milk and automatically orders more, that payment also must be secured. In cases such as these, the security of the payment cannot reside exclusively with the device itself – there must be additional security layers residing elsewhere, such as in the cloud.
Initiatives like the PSD2 in Europe and the Open Banking initiative in the UK, will likely accelerate banks’ ability to deliver banking services to the IoT. That, plus the projected explosion of connected devices, should propel players across the IoT ecosystem to come together to create robust security standards. And they can take a leaf from the books of the automotive sector, which has been an early-mover in implementing standards-based security for embedded devices.
A multi-channel, multi-device approach and thinking in terms of layered security are important considerations for financial services in this new world.
Integrating financial services into everyday lives with IoT
To ensure that financial services are providing customers with the best technology suited to their needs and with content suited to the device they are using, they should gauge customer demand through research and conducting focus groups, while also ensuring customers are able to access information securely, to provide an all-round positive consumer experience.
Using the data collected from connected devices will help financial services providers to understand customer needs. If they can also understand how customers want information delivered and provide said information securely and on the right device, this will enable the best possible experience and one that fits seamlessly into people’s everyday life.
Financial institutions that deliver a connected experience that is secure, contextual and relevant to users will be successful and remain competitive.
Fiserv is a provider of technology solutions to the financial world, including banks , credit unions, securities processing organizations, and insurance companies.
Scott Hess is Vice President of User Experience, Consulting and Innovation.
Image under licence from thinkstockimages.co.uk, copyright hitivong