Banks use the IoT and other banking applications to resolve the conflict with mobile banking that is seen in traditional branch banking. Biometric sensors, for example, can be used to gather user data while entering the bank and relaying the information to the primary system.
How Banks can Leverage IoT to Reap Benefits?
The Internet of Things (IoT) is molded by customers’ demands for more enhanced productivity and experience with the implementation of smart devices powered by artificial intelligence solutions.
Financial organizations continue to transform with the implementation of digital and mobile devices as branch operations focus on improving convenience and service for customers. But because this has created opportunities for fraud and loss, organizations need to adopt new techniques to prevent and detect them.
Here are four use cases of IoT in banking:
Mobile and online banking has helped improve customer engagement and the services the clients need to run seamlessly. Security leaders need to prepare and work to collect more data and intelligence from streamlining, automating, and improving the business. Financial organizations integrate these intelligent technologies to provide better customer engagement, improved security, and reduce fraud.
Video surveillance generates many IoT data, and banks depend on these videos to assist in alleviating fraud, enhancing customer service, and providing better training. Banks utilize the information gathered from various systems and sensors to provide an end-to-end integrated and trusted solution. By gathering, examining, storing, and acting on this information in real-time, it helps reach organizational and operational goals leading to enhanced research and customer experience.
Cybercriminals are using more comprehensive and unique methods to access networks, data, and assets. With more physical security devices connected through IoT, encryption and susceptibility testing have become paramount to secure data transfer. Banks should have regular updates and firmware on network devices and practice proper password hygiene.
Financial organizations need to allow security teams to allot dedicated time and effort to appropriate tasks and efficient responses while automating certain operations such as firmware updates and camera verification.
Banks need to facilitate IoT and the cloud while boosting customer experience and loyalty, while providing various advantages for sharing information with stakeholders quickly and efficiently.
How Fintech Changes the Game for Community Banks and Their Customers:
As community banks address the rapid pace of change in today’s world, they are leveraging financial technology to level the playing field with the nation’s largest banks. By tapping into their strengths and nimbleness as responsive relationship lenders, community banks continue to deliver the high-touch, high-tech service that their customers expect from their trusted financial institution.
And as the fintech industry has matured, so too have its approaches to innovation. Rather than competing for customers, fintechs have realized the potential in creating symbiotic relationships with community institutions. This means they can provide financial technology solutions that community banks can integrate into their customer offerings. For community bankers, partnering with fintechs also makes strategic sense. Instead of relying solely on their core providers, new solutions that leverage application programming interfaces (APIs)can tap into, and complement, existing infrastructure to create products and services that more easily integrate with other solutions. With a greater understanding of the opportunities that exist for community banks, fintechs are developing products that not only address existing needs but do so with more seamless integration. It’s proven to be a win-win.
“While there’s no doubt fintechs see strong business potential with community institutions beyond the promise of revenue, they consistently point to one foundational concept: the relationship between the customer and the community banker”
At ICBA, we wanted to help further community bank and fintech partnerships, so we partnered with The Venture Center in Little Rock, Ark., to launch the ICBA Think TECH Accelerator late last year. This onsite, boot camp-style program fast-tracked the product refinement and go-to-market plans of eight fintech providers that are offering services to community banks. From process efficiencies and cybersecurity enhancements to completely new deposit product offerings, accelerator participants gained firsthand insights into the regulatory environment in which community banks operate and how they serve their customers — and refined their products and pitches accordingly. And the fintechs were mentored throughout the process by community bankers, regulators, and industry stakeholders, creating a collaborative process that benefited all parties.
Take Teslar, one of the accelerator cohort and the Banker’s Choice winner at this year’s ICBA LIVE® national convention. The company was founded by bankers with a passion for supporting community banking by streamlining systems. Teslar offers a software solution to bring systems together to interoperate from a single platform — helping bankers actively manage daily tasks for their portfolios. Everything from exception tracking to loan-closing documentation is available through the platform. By alleviating some of the manual processes associated with tracking activities, Teslar works to empower bankers to better serve their customers with accurate and timely information.
Accelerator participant MK Decision also offers a solution to streamline processes. By leveraging APIs, MK Decision’s technology integrates with a bank’s core; an API also enables it to tap into credit bureaus to get information on a loan applicant within seconds. This helps speed up the loan- decisioning process while providing an improved digital lending environment for enhanced customer experience. In fact, ICBA Bancard, the payment services subsidiary of the Independent Community Bankers of America, which provides community banks with access to comprehensive, affordable payments solutions, has partnered with MK for its online loan-origination system. The product streamlines the community bank credit card application process to create a better customer experience to shop and apply for cards.
Then there’s the important work of safeguarding our institutions in today’s evolving cyber threat environment — accelerator finalist Adlum in offers finance-specific security incident and event management (SIEM) solutions to community banks. From data retention to compliance, to malicious intruder detection, the company provides a range of offerings to help community banks meet cybersecurity compliance and manage evolving threats. AI and machine learning techniques fuel their solutions and analyze anomalies, funneling a billion monthly events down into the five or six each month that requires further review by a bank employee or the attention of the team.
And, Finovate’s most recent “Best in Show” awardees Invest SouSou is another accelerator alumni that provides a new product stream for community banks to grow deposit accounts via a concept called “social banking.” The solution allows a group of individuals with similar financial goals to open a group savings account that can be used as cash collateral for a loan guarantee. As a bonus for banks, the company’s proprietary algorithm creates unique customer credit risk profiles to better inform bank lending decisions.
These are just a few solutions that create a wealth of possibility, but what leads these innovative companies to seek out community banks as partners? While there’s no doubt fintechs see strong business potential with community institutions beyond the promise of revenue, they consistently point to one foundational concept: the relationship between the customer and the community banker.
Coincidentally, that’s also the foundation of the community bank business model and why these local lenders continue to flourish and remain competitive with even the biggest banks. Because it’s not always about scale, rather it’s about finding the right solutions to help people and local businesses prosper. And community bank-fintech partnerships create a winning combination of high-tech, high-touch, to do just that. It’s an exciting time to be in community banking.
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