Will the Internet of Things plug into banks?
14 March 2016
By 2020 we will have 25 to 50 billion devices measuring and generating data about almost everything. Many industries are now looking into new ways to use this new technology, but it looks like banks still don’t consider the Internet of Things (IoT) directly relevant to the way they do business.
In 2014 the Internet of Things (IoT) landed at the top of Gartner’s Hype Cycle for Emerging Technologies replacing big data on thethrone. Today, we are witnessing a revolution where wearables, connected appliances, health-tracking devices are getting thousands of new users each day. The prediction is that by 2020 we will have 25 to 50 billion devices measuring and generating data about almost everything.
Many industries are now looking into new ways to use this new technology, but it looks like banks still don’t consider IoT directly relevant to the way they do business.
Resource consumption optimization is one good example where IoT can have a major impact. The pressure of utility costs on household budgets is constantly rising. At the same time, conservation is becoming one of the imperatives, not just for consumers but for cities and governments as well.
Utility providers such as Enel in Italy and Pacific Gas and Electric (PG&E) in the United States, are deploying “smart” meters with visual displays showing energy usage. The UK government will require energy companies to provide smart meters as standard across the country by 2020. Having smart meters in every house will make it possible to gather data about water, electrical energy and gas consumption in real time.
Can banks benefit from this data?
In the emerging “Age of the Customer”, insight will become a key competitive weapon. Banks will have to offer solutions to their customers, outside of their existing frameworks in order to obtain valuable data. Obtaining this data will help banks get a fuller insight into customer behaviour which in turn will enable them to optimise the services and products they offer.
It looks like that banks have just the right tool for this - personal finance management (PFM). By leveraging PFM’s existing technology, big data with aggregation engines, analytics and predictive algorithms, banks can help customers manage their resource consumption in the same efficient way they help them manage their money today. Building on customer trust, banks can engage and encourage customers to share their consumption data. Banks can use this data to recommend improvements to energy consumption and can use peer analysis to highlight new ways to save.
For the customer, financial and resource related data combined, in one place, may bring the meaning of holistic overview to a whole different level. For the bank, the customer relationship deepens and widens.
Would you share your consumption data with the bank if it helped you use resources more efficiently?