Winning the Customer

November 27, 2015
/   Spotlight

It’s exhausting just trying to keep pace, let alone stay ahead. Every provider in every business feels the pinch.

Five ways payments will be different in 2024

November 24, 2015
/   Voices

Predicting the future of cash and card payment volumes is arguably a fool’s errand – but Payments UK, Britain’s new trade organisation for the industry, is in a good place to have a go...

Contactless cards: Opt-in or opt-out?

/   Voices

Australia is toying with the idea of creating an opt-in function for contactless cards, in a move that highlights the problems around coping with new payment technology and how fraud risks are handled.

Five EMV lessons for the US

/   Voices

The EMV liability shift has occurred in the US, so what can we expect to see happen in the coming months and years as a result of this change?

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Around this time last year, we considered on this blog how big wearable technology would become in 2015. Let’s acknowledge that the jury’s still out on that one, and that the question had also been asked about 2014, and even 2013. That’s always the problem with technology predictions—we know the platform will shift, but we don’t often know when, and we usually don’t know to what.

But that won’t stop us from stepping it up a notch. So 2016 is coming up—will this be the year of the Internet of Things? And if it is, what effect will it have on the financial services industry?

As a concept, the Internet of Things is even more nebulous than wearable technology. At least that field is specifically tied to the body—there are only so many things we can actually wear (we hope). IoT, by contrast, refers to just about every ‘thing’ out there, and the possibilities are endless.

In the IoT universe, microchips and sensors can be implanted in every tangible object to ensure that it uses information flow to conduct all functions. As a result, all ‘things’ that are now single-purpose, static and standalone can take on new functions, evolve consistently, and become connected to all other ‘things.’

An electric blanket could download the latest report from the National Weather Service, map it to a sleeping individual’s body mass index, and constantly adjust the temperature to ensure maximum comfort levels all night. (It could also take on health-related functions—for seniors and babies, for example—and relay that information to healthcare providers in real time.) A couch could track exactly who is spending how much time sitting on it, and convey that data to the insurance company, which will have algorithms to adjust monthly premiums accordingly. ‘Smart cement’ could monitor the pressure applied to a building or bridge and send out instant alerts, or even shut off access automatically. Bottom line: If the Internet changed a lot, the Internet of Things will change even more.

But what does this have to do with banking?

First, remember that each of those ‘things’ represents an end point for data to pass through. Sure, few of them will actually become devices regularly used to interact with a financial services institution, or even conduct a transaction. But remember, just a few years ago, the idea that a simple phone—previously used for nothing but talking—would become so critical for commerce and even direct banking would have seemed ludicrous. Today, mobile banking is at the core of so much of our outreach. So yes, the IoT will inevitably introduce a raft of new channels for all kinds of banking, each with its own streams of apps and other tools. Whatever we have now will be dwarfed by what’s coming.

Next, security will become even more of a nightmare than it is now. Volume creates vulnerabilities—the explosion in networked access points represents a wealth of opportunities for rampant disorganized crime, let alone sophisticated criminal enterprises with considerable skills and resources at their disposal. Think identity theft is a problem with the number of mobile devices lying around now? Multiply that number many, many times over—just to encompass the scale of devices offering similar levels of access to financial and other types of confidential data—and you get a sense of the dangers ahead.

Of course, those devices will also generate mountains of information for legitimate use. Big Data will get much, much bigger, and those with the skills and resources can mine it for actionable intelligence that guides every business initiative.

And perhaps most importantly, consider the size. Gartner puts the number of IoT-related devices at somewhere around 26 billion in 2020. The market value is appropriately tagged at $15 trillion. If the financial services industry isn’t deeply in this massive transformation, it deserves to go out of business. This isn’t about technology, it’s about fundamental changes in every aspect of consumer and business activity. We have to be driving the process, and picking winners and losers along the way.

Most of the early attention will be on consumer capabilities, but it’s definitely not going to stay that way. At some point, it will be the business possibilities that get the focus, and that’s when the true potential of this dynamic shift will really start to make a difference. That why this is surely only the first of many such pieces in this space.

It’s easy to feel overwhelmed by the sheer scale—here we are, just trying to cope with the flood of mobile apps, and along comes a new discipline that will potentially introduce many new platforms, each with its own applications. But it’s surely coming, and it would be good to be ready. Any thoughts on which particular trends will emerge first?


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Brad Strothkamp

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.