The Internet of Everything (IoE) can potentially create incremental economic value of up to US$19 trillion within this decade. As everything from automobiles to refrigerators to kitchen containers become connected and smarter, banks have a huge opportunity to get closer to their customers’ lifestyles and financial needs.
Banks need to ensure that they have the analytics infrastructure in place to take this huge deluge of data and turn it into hyper-personalized financial experiences. First movers in this space will also gain a reputational advantage of being seen as digital mavens by increasingly discerning digital consumers.
Thus far, the smart refrigerator that orders milk has become the de facto point of reference to discuss the possibilities of IoT-enabled banking. But some more tangible and immediate possibilities are emerging. For instance, progressive banks are already talking about a car banking concept that can turn the car into a wallet, and create smartphone-free payment at gas stations and drive-throughs.
The IoT phenomenon has a lot of potential applications across the entire spectrum of banking services. Earlier this year, Santander InnoVentures, the Fintech innovation fund from the Santander Group, published a paper detailing multiple use cases that go beyond retail banking. One particularly significant example combines IoT data-capture devices with Blockchain’s smart contract functionality to streamline contractual processes.
For the banking industry, the IoE represents a disruptive opportunity that is as big, if not bigger than the internet revolution. But this time around, the pace of transformation will be much faster. Banks that seize the opportunity early, innovate quickly and consistently, and create connected banking experiences will emerge as winners.