By 2021, 50% of banking users worldwide will use a smartphone, PC, smartwatch or a tablet to access financial services, a 53% increase from the current figures. In India alone, the number of online banking users is estimated to reach 150 million in 2020 from current 45 million.
Banking inconspicuously integrated the web and mobile channels to the brick and mortar ones, and today omni-channel banking is table stakes. In the future, with more and more connected devices, banking will be consumed on a variety of new channels and form factors. For example, progressive banks have already begun tapping into their digital customers through fitness apps that can monitor a user’s activity and translate fitness level into interest rates, or reward users when they hit a certain goal.
The hyper connected world of tomorrow will have machines transacting on behalf of humans, and not just humans consuming services directly. In 2018, progressive banks will prepare for this future with services designed to talk to smart machines at the consumption end, i.e. at households, customer premises or customer assets. For example, a consumer may authorize a smart refrigerator to order grocery and charge the credit card, or configure a smart car to pay for fuel.
Banks have a sizeable role to play in this connected future. The increase in channels that banking is consumed on directly translates into an increase in data sources, and banks will harness these data sources for new experiences. Take the example of an industrial scenario such as trade finance. An exporter of perishable goods need not worry about the inventory getting damaged due to weather or temperature. The exporter will have the necessary information and insights real-time to make a decision and take appropriate action.
Banks will need to make this journey through the three stages of the IoT information value chain, namely access, insights and action.
- Access – Banks will need to ensure they are available for their customers at all times on the channel of their choice, which could be a smart car, a voice assistant or any connected device. Moreover, banks will need to ensure access to data from a bank’s leased equipment or a customer’s mobile phone, and data from external sources.
- Insights – Next, banks will need to aggregate and analyze relevant business insight out of the massive amounts of IoT-generated data streams.
- Action – These data and insights should also evoke action as appropriate. An example is an autonomous car simply locking itself in case the owner defaults loan payments.
But banks must bear in mind that security is of utmost importance in this connected future. In this future of ‘banking on things’ banks will have access to huge volumes of customer data. They must make security an architectural principle for development and integration of these services.
Read the full report here – #ReimagineBanking – 10 Strategic and Technology Trends to Watch Out for in 2018
