March 10, 2020 - Thanks to the unrelenting march of technology, modern banks would be almost unrecognizable to someone who stepped out of the 1960s and into a local branch in 2020.
Though we take them for granted today, ATMs in particular have transformed the entire banking experience, eliminating long lines of customers waiting for tellers.
And now, the Internet of Things (IoT) is now poised to revolutionize branch banking all over again.
Unlike ATMs, though, the IoT is a collection of technologies that will enable countless improvements across many facets of the retail banking experience. Here are the top five ways that technology is changing banking:
1. Mobile fraud prevention. For years, credit card companies have relied on location tracking as a signal for fraud. If your credit card starts making purchases half a world away, for example, the credit card company can flag the transaction, place a hold on the charge, or reach out to the card holder for confirmation.
Now, thanks to wearable and mobile devices, banks can offer that same kind of protection. If customers install the bank’s mobile app on their smartphone or wearable device, the bank can monitor their location.
If the device isn’t located where a transaction is occurring, the bank can instantly flag that as a suspicious transaction. That’s especially useful for bank-issued debit cards, which often don’t offer the same purchase protection as credit cards.
2. Banking directly from mobile devices. Speaking of wearable and mobile technology, banks can increasingly offer the ability to conduct transactions from the wrists of customers, avoiding the need to do business in person at branch locations.
Banks can integrate their services with popular payment systems like Apple Pay, Samsung Pay, and Fitbit Pay, for example, on phones, watches, fitness bands, and other devices.
Even tasks as simple as depositing a check can be done through mobile devices – customers can photograph both sides of the check and upload it to the bank via a mobile app.
3. Chatbots alleviate employee workload. We live in an age when customers expect around-the-clock service, whether it’s retail or banking.
Even during ordinary business hours, delivering customer phone support can require significant resources. Thanks to machine learning algorithms and the IoT, though, digital assistants can perform that lion’s share of customer service phone support, only escalating calls to human customer service reps for complicated scenarios.
Chatbots are already convincingly human, able to understand natural language conversation and respond authentically – especially when augmented with industry-specific vocabularies.
4. Smart personalization. While IoT innovations increasingly help customers avoid using their local branches, the reality is that there will continue to be times when human interaction is required.
And for times like those, the IoT can help banks offer more personalized and customized experiences.
For example, banks can borrow a trick from retailers by installing wireless beacons inside the branch. These virtually invisible devices can help to identify customers via the mobile devices they carry.
This tech can be combined with facial recognition systems so tellers and other customer service representatives can identify customers and be prepared for their visit before they reach the front of the line.
Not only does it offer better personalization, but shaves time off the total end-to-end customer experiences as well.
5. Preventative maintenance for equipment. Bank branches contain a plethora of equipment. All of this is in addition to the typical systems you’d find at any physical facility (think HVAC, lighting, alarms, controlled entry and exit). Certain specialized equipment in banks, such as teller cash recyclers, can cost as much as $40,000. With that level of investment, it only makes sense to protect it with remote monitoring software. In fact, using an IoT platform, all of the equipment and systems in a bank branch could be monitored for potential failure and improved efficiency.
It’s really only a matter of time before banks make investments in monitoring these pieces. By the time it’s all said and done with the coming technology changes, someone stepping out of 2020 probably won’t recognize banks in 2050.