Monday, March 31, 2014

10 Ways iBeacon Can Improve Banking Sales & Service

At a time when banks and credit unions are trying to improve the economics of branch banking, iBeacon could deliver a personalized digital sales experience as soon as the customer enters a branch office.

iBeacon, working in conjunction with Bluetooth Low Energy (BLE), can integrate the physical and mobile channels, enabling a bank's mobile app to deliver highly tailored digital promotions, coupons or offers directly to the consumer's smartphone when the customer is in the general vicinity of an office, at any specific location within an office or at an ATM.

There are already more than 200 million iBeacons in the form of phones in our pockets. Google has included BLE into the Android 4.3 and other recent phones. Apple has been including BLE in their devices since the iPhone 4, meaning that every iPhone from the past two years is an iBeacon in itself. More importantly, standalone low cost iBeacons ($40 - $100 each) can be placed in physical branch locations, linking the bank branch with consumers' smartphones.
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iBeacon technology is designed to deliver continuous content based on the precise location of a customer within a branch, allowing for highly relevant messaging or special offers on products to be sent to smartphone users at the exact time and place they are most useful. This immediacy is a big advantage over other technology like NFC or QR codes that are either less accurate or require additional steps by the customer.

In order for iBeacon to work in banking, customers must first install the mobile app of the bank they are visiting and opt-in for personalized promotional alerts. By providing the bank access, the bank could track activities performed both online and in the branch in the past to customize both mobile and in-person communication the moment they step inside the branch.

Consumer Acceptance of In-Store Alerts

While there is virtually no research on the acceptance of in-store alerts by financial institutions due to the current lack of use by banks, there is positive response from consumers when in-store alerts are used by retailers. According to a study of 1,000 smartphone users commissioned by Swirl, 67 percent of consumers reported having received shopping-related push notifications on their smartphones during the previous six months. Of those, 81percent said they read or opened these alerts most of the time, and 79 percent made a purchase as a result.

The research also found that the alerts delivered must be both relevant and valuable from the customer's perspective. When asked what caused them to ignore mobile push notifications;

  • 41 percent said they were not relevant to their interests or location
  • 37 percent stated the offers did not provide enough value
  • 16 percent fount the alerts to be annoying
  • 6 percent did not opt-in to receive the notifications
It is clear that the lessons learned in the retail world apply also to the world of banking. While iBeacon technology can provide the power to deliver highly relevant digital content and offers personalized to the customers' location and banking relationship, the use of these alerts must be used judiciously. 

In both retail and banking, privacy remains an ongoing concern for consumers, especially when disclosing their smartphone's location. The good news is that 77 percent of consumers said they would be willing to share their location information, as long as they received enough value in return. An opt-in process helps to establish this trust and consent.

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iBeacon Banking Applications

Announced in February 2014, Australian bank Westpac is planning to trial the technology in selected branches over the coming months. iBeacon will work with both iPhone and Android devices and will be used to send customers special offers and other incentives on their device when they are in a branch or walking past the office. It'll also give bank staff full details of a customer's business with Westpac when they enter a branch.

It'll be an opt-in service, fully integrated into Westpac's mobile app.

Some potential ways banks and credit unions could leverage the potential of iBeacon technology include:
  1. Welcome Communication: As customers pass or enter a branch, the bank can deliver a welcome message to the customer and a summary of services available at the branch. This could include a personalized map of the office and the available specialists currently at the office. Any special offers can also be highlighted.
  2. Customer Recognition: When a customer enters a branch, branch personnel can be alerted and can be provided transaction history and sales prompts for interacting with the customer based on their value. This enhanced recognition can improve service and loyalty.
  3. Availability and Wait Times: Much like at an Apple store, a customer could be provided the wait times for specific services/specialists as well as a way to set an appointment using their smartphone app.
  4. Personalized Product Offers: Offers based on previous customer activity, account ownership and even demographics and credit score can be sent to the customer's smartphone upon entering the branch. This could allow for dynamic pricing of services or rewards offers based on the customer's current relationship or relationship potential.
  5. Location Specific Offers: If a customer is standing at a deposit slip counter, they could receive a notification (along with introductory video) related to remote deposit capture services.
  6. Education: When a customer is waiting for a teller or platform officer, highly relevant short form educational videos can be delivered to the customer's smartphone for viewing. These could include direct links to already partially completed application/authorization forms.
  7. Surveying: iBeacon can provide a way to solicit customer opinions and service ratings when the customer visits or leaves the branch.
  8. Branch Analytics: With iBeacon, banks will be able to understand which customers are using branches, what are the busiest days and times, how long on average are customers spending in branches and what type of transactions customers are completing. This data can assist in optimizing the branch experience for customers in the future. This data can also assist in cross-channel attribution tracking.
  9. Beacon Enabled ATMs: For customers who have authorized communication via their mobile device, personalized offers can be delivered to the phone after an ATM visit based on the customer's relationship. This technology could also potentially replace the need to use a card to access the ATM.
  10. Post Visit Retargeting: The ability to communicate with the customer via mobile, online, phone, etc. after a branch or ATM visit is possible applying the learnings collected during the visit.

Financial institution marketers should be excited about the opportunity to target customers as they walk past or enter a branch or use an ATM. It remains to be seen, however, how consumers will react to the growing number of retailers and other organization that track customer locations and push out offers.

Privacy advocates have already raised concerns about the use of iBeacon to deliver messages and offers. Until privacy laws and guidelines are updated to account for advances in technology like iBeacon, the onus will be on the bank or credit union to implement clear opt-in processes and focus on delivering value to customers as opposed to simply pushing out a series of offers.

The good news for banks is that locational alerts could turbocharge the activation and utilization of bank and credit union mobile apps. In retail, 80 percent of consumers surveyed said that they would use their mobile app more often if the apps delivered sales and promotion alerts. This can support the goal of transforming current mobile banking apps into indispensable financial applications that can deliver relevant and timely digital content.


  1. Great post, Jim. I've been reading and covering iBeacons in retail, but I have to admit, I haven't thought about how banks could leverage the technology.

    Reading your article, I have to say that you made a lot of good points. Number 3 (Availability and Wait Times) in particular caught my attention, and I'm sure that a lot of consumers would appreciate a notification letting them know how long the wait is.

    I wouldn't be surprised if more banks adopt iBeacon. As of now, I know that some financial institutions are already using some type of geo-targeting in their marketing efforts. American Express for instance, once sent me an alert inviting me to use my Amex credit card at a particular cafe, when I was in the store right beside it.

    Amex wasn't using iBeacon in that example, but I think it goes to show that those in the banking/finance space are paying attention to location-based tech and it could be just a matter of time before they use iBeacon in their branches.

  2. Hi, I'm Jorge from Peru and I have two questions.

    In Peru you can not use your cell phone in the branches for  secrurity reason how this technology can not avoid this barrier

    Many, if not all people have the bluethoot off, always. This BLE continues with the same button bluethoot normal or always manteins?

    thank you!

  3. Remembering to switch on bluetooth and the said bank's mobile app while entering a bank premises are two sources of friction with BLE. A bank in India tried using RFID tags embedded inside its debit and credit cards for many of the use cases you've mentioned. There was no need for the customer to do anything while entering the bank - apart from carrying the said card. Since they'd anyway need the card for whatever it is that brings them to the bank in the first place, that's almost a cinch. Not sure how the trials progressed.

  4. The most useful iBeacon functionality from a bank's customers point of view would be information about the time they will have to wait in the queue before being assisted :-)