Connectivity is a buzzword frequently applied to consumers. Today’s consumers seem almost constantly connected to some sort of device, mobile or otherwise. By the end of 2017, an estimated 28.4 billion connected devices will exist worldwide.
As the number of connected “things” expands rapidly, so do the possibilities for various industries to dip their toes into Internet of Things (IoT) waters. The financial services industry is no exception. In a recent white paper, I explored the IoT’s ability to improve the financial lives of consumers. Below is an excerpt from that paper.
Because financial payments are one of the “pesky” daily tasks keeping people from things they would rather be doing, many IoT solutions are likely to connect to payment systems. Examples includes smart meters that not only monitor water usage but also pay a customer’s monthly bill or a parking app that not only locates open spaces but also pays the parking meter.
IoT app developers are already looking for ways to connect their solutions to a consumer’s financial accounts to make both set-up and use simple and seamless. And there are collaborations lining up to help them. Take, for example, the recent partnership between a semiconductor maker, a mobile payment technology firm and a wearable payments provider. The team of companies has created a payment solution that will allow IoT device owners to load multiple payment cards from various financial institutions and payment networks onto their gadgets.
Financial institutions, too, are beginning to explore how plugging into the growing IoT can improve relationships with consumers. Already we see financial firms making in-roads. Capitol One lets Amazon Echo users activate payments and check balances with their voices. Mastercard is working with Samsung to power grocery orders made by smart refrigerators and plans to extend its learnings to jewelry, clothing and other IoT wearables.
There is no doubt the IoT has the potential to inject unprecedented convenience into the financial lives of consumers. Financial institutions are right to explore the technology’s potential to improve experiences and deepen relationships – so long as that exploration includes the security and controls consumers expect.