Connected devices have the potential to revolutionise the way we live, administrate and bank. Will we be paying bills via our fridge in the future? Appropriateness, security and customer experience are paramount says Scott Hess, vice-president of user experience, consulting and innovation at Fiserv
The Internet of Things (IoT) is with us to stay. With the number of connected devices expected to outnumber humans on the planet by four to one by 2025, it is inevitable that new forms of interaction will become part of daily life.
The IoT – an ever-growing network of devices that can collect and exchange data – is much more than connected cars and smart thermostats. It offers an opportunity for financial institutions to fold a whole range of activities, from payments to financial management, into customers’ lives in new ways.
The financial services industry has a significant opportunity to capitalise on the heightened opportunities for customer engagement offered by the IoT by evaluating which connected devices are right for the delivery of financial information and capabilities, and ensuring the security of interactions.
Delivering the right customer experience
As with any new service paradigm, it is important to understand what capabilities are practical and exactly how they can be delivered. As new connected devices emerge, we can evaluate how customers interact with them and if they are suitable for conducting financial tasks.
When driving in their connected car, customers may want to check their balance and initiate a bill payment. At home, they may want Amazon Alexa to provide proactive nudges 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 the IoT. In an age of information overload, irrelevant information will at best be ignored, and at worst prompt customers to look elsewhere.
For financial institutions looking to extend existing capabilities to different devices in the IoT, the approach is the same as would be used when evaluating the capabilities of delivery on a smartphone versus a desktop.
Start with these questions: What types of capability are practical for this device? How will consumers want to access services from it?
Multiple layers and shared standards
Security must also evolve in line with the IoT revolution. The balancing act between customer convenience and security will get ever more precarious as consumers demand new ways to interact with their money. Therefore, a multi-layered approach to security is vital.
Nowhere is this more crucial than in payments. Referencing a prior example – if a customer wants to check their bank balance and pay a bill from their connected car, they could do so by accessing their 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 recognises 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, likely in the cloud.
The projected explosion of connected devices should prompt players across the IoT ecosystem to come together to create robust security standards.
The automotive sector 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.
The integration of financial services
By testing technology and gauging consumer demand through research and focus groups, financial institutions and their technology providers can supply customers with relevant content through the right device, while ensuring that customers are able to access information securely to provide an all-round positive consumer experience.
It is essential they keep the experience secure, contextual and as relevant to the consumer as possible. Understanding what each customer needs, how they want information delivered, and how to do so securely are the first steps in providing customers with the best possible experience, one that fits seamlessly into their everyday lives.