It’s not likely the Internet of Things (IoT) is top of mind when you walk into a bank branch, unless you’re a very forward-thinking retail banker.
There are substantive reasons – good and bad – why that’s so. As Aman Narain, global head of digital banking at Standard Chartered writes in Banking Technology, “Historically, banks have been some of the richest repositories of data – but also the least likely to do something innovative with it. This is partly due to regulation, but mostly due to a self-limiting mindset prevailing in the banking industry.”
Financial services may not be at the forefront of IoT exploration, but they definitely do have a toe hold. PwC last year reported that financial services are 10th out of 10 industries that have invested in sensor technology. A good portion of that was likely accounted for by insurers employing telematics in automobiles, but those brick and mortar bank branches may be ideal for deployment of IoT technology.
Michael Martin is one of those whose eyes do light up when he thinks of banking applications for this emerging technology. The CIO and CTO of Clifton Park, NY-based technology services and solutions firm nfrastructure, views IoT as a critical element in the ability of retail banking to meet the challenges posed by web and mobile technologies.
“As more customer interactions move onto mobile platforms, banks are questioning what role the branch is going to play from a customer interaction standpoint,” Martin says. Banks are increasingly seeking outside input on the future technology of banks. For example, in 2014 Bank Technology News reported on Citibank’s mobile challenge inviting outsiders to utilize a provided set of application programming interfaces (APIs) to create apps for mobile devices, the Internet of things, and wearable apps.
“When consumers walk into a branch what they really want more than anything is access to an expert who can guide them through a conversation and exploration of a specialized service such as obtaining a mortgage or a line of credit,” Martin says. The problem is that fielding specialists in each branch location is prohibitively expensive, particularly when their expertise may only be needed periodically in that locale.
Martin sees banks using IoT to overcome that cost barrier by creating specialized centers of excellence in hub locations that can be virtually extended to the branches with interactive kiosks. This requires integration of collaboration and IoT technologies such as high quality video conferencing, interactive touch-screen content, and Bluetooth LE beacons for location-based mobile interaction.
“When a customer walks into a branch they could be prompted on their mobile device for what they want, and based on what they select a kiosk could start to load some content about it and connect them to an expert.” In addition to connecting customers to specialists with audio and video, banks will also have to integrate peripherals like signature pads and printers to record and document activities.
Still, bank IT is traditionally methodical and risk-adverse. That bodes well for protecting customer data and assets, but as Martin notes, “is not super conducive to some early stages of IoT projects where they need to be moving quickly, prototyping things, and experimenting. The types of technology involved are very different than what financial services IT organizations have typically worked with.”
Accordingly, he urges banks to focus on how to staff at three major stages in IoT development:
- Experimentation and prototyping: Separate the organization into two groups: One that can move fast and fail fast, and one that focuses on making sure the important transactional applications stay stable.
- Hardening and operationalizing prototypes that show promise: “That’s where it makes sense to get the existing IT team involved because banks are not going to deploy at scale until they’re sure they’ve got things like security nailed and how they’re going to manage these solutions once they get deployed,” says Miller.
- Deployment at scale: “When you need to have lots of people to deploy lots of things in many different locations, quickly, reliably and predictably. More often than not, it really makes sense to look for outside help.”
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As CTO and CIO at nfrastructure, Michael Martin leads the company’s technology services organization, a team that is responsible for designing, building and operating innovative technology solutions for large public and private enterprises. Michael brings fifteen years of industry experience to his role at nfrastructure, with deep experience leading complex enterprise technology initiatives, building high performing teams and optimizing IT resources to improve company performance. Prior to joining nfrastructure, Michael held a variety of senior technology leadership roles including directing a nationwide Business Intelligence consulting practice and leading product development for NY State's $7.5B wholesale electricity e-commerce marketplace. He worked at the director of business intelligence Practice at CMA Consulting, the manager of energy market products at NYISO, and a presales engineer and product manager at TRW.
