Protect, Engage & Support Customers From the Palms of Their Hands
Technology can be a blessing and a curse. For every instance of innovation providing us new, faster, more efficient ways to do things, there’s other examples of global data breaches or catastrophic hardware failures.
No other industry can preach to the duality of technology like the financial industry.
However, in geofencing, financial services has the ability to adopt a technology that can generate tremendous efficiencies through mobile platforms while also providing another layer of needed security in order to protect their customers from fraud.
While geofencing is just now being adopted in a broader scope, continued integration can only increase the benefits it will provide the entire financial industry.
What Is Geofencing?
Geofencing is a technology that works in coordination with the location services on a mobile device, and is an integral part of context-aware computing.
When an application integrates geofencing, it senses the device’s location, feeding the information back to the application’s provider. When the locator indicates the device has either entered or left an electronic perimeter — hence the name geofencing — it automatically informs the provider.
In mobile technology, this trigger can immediately generate a variety of responses, typically in the form of a push notification or SMS to the device’s owner.
Enhanced Security Benefits Customers as Well as Companies
Although the technology is still relatively new to the industry, a few distinct uses already seem to be the most beneficial to financial services.
Due to the location monitoring within the technology, a financial institution can use geofencing as an effective weapon toward fraud prevention.
When an app on the customer’s device is being used outside of their typical geographic areas, the application can alert the company and customer to the possible fraudulent activity.
For instance, if the application senses a customer using a mobile banking app outside of the typical area of use, it could indicate fraudulent activity on the customer’s account, perhaps after the device was lost or stolen.
By alerting the customer to the activity, the institution can proactively handle the possible fraud, thereby mitigating the damage to both the customer and the institution.
To prevent the trigger of false fraud alerts, the customer can alert the institution if they plan on traveling outside of their normal area, whether that’s a vacation overseas or a short weekend trip.
By doing so, the financial institution can integrate that information into the application so the customer’s mobile device GPS does not create false alerts.
Engaged Customers Are Profitable Customers
In terms of customer experience management, however, the true power of geofencing lies in its unique engagement abilities.
From marketing efforts to customer satisfaction, geofencing can be an immersive technology for the financial services industry that can ultimately lead to greater revenue streams and better customer service if adopted in the most effective manners.
Loyalty Rewards Plans
Credit card providers are one of the most notable users of loyalty plans with their customers. If the mobile applications for their credit cards employs geofencing technology, the app would be able to sense the user’s location, automatically sending notifications to the user of loyalty rewards within their proximity.
Such offers are called location-based offers, or LBOs.
For instance, a husband’s flight arrives late on his wife’s birthday, so he is rushed to find a gift for her. As he leaves the airport and reaches his car, his credit card company’s app senses where he is and sends him a push notification, identifying a nearby flower shop that is part of their rewards program.
Both the company and the husband benefit from the entire experience.
Geofencing can also significantly enhance the overall customer experience.
By sensing where an individual customer is at any given point through their mobile device, the company can send push notifications to alert the user of branches within the geofence perimeter. Information detailing holiday banking offers, special promotions or even updates on service procedures can be included within the notifications.
This active stream of communication keeps the customer engaged with the company, making them far less prone to switching to a different provider and, of course, increasing the likelihood of enhancing revenue.
This is yet another example of both the company and customer benefiting from the technology.
The Future Is Already Here
Although geofencing is just now being integrated into mobile financial applications, a handful of companies have already employed it to great effect.
The Australian bank Westpac, for instance, uses geofencing in their mobile app to identify when a customer is in an airport. Once the app is alerted to the location, it sends a notification asking where the customer is visiting so it can make the necessary adjustments to its fraud prevention system. It also gives the customer all of the nearby ATM locations.
Barclays uses geofencing in its mobile app to enhance the in-branch customer experience. While the app tells the user about wait times at the teller lines and even provides branch maps, it also alerts the branch of the personal banking needs and interests of the customer. For example, if a customer had been on Barclay’s website looking for mortgage information, the mobile app would inform the branch employees of that mortgage interest and act accordingly.
Similarly, auto insurance providers are beginning to use geofencing to inform drivers of needed maintenance, as well as enabling geo-perimeters for teenage and elderly drivers. Like most instances of successful geofencing applications, such integration helps keep the driver safe while providing the insurer more immediate, insightful data along with enhanced customer engagement.
Obviously, geofencing is an extremely useful technology for the financial services industry if it is adopted and integrated in an effective manner. With its ability to provide additional security for fraud prevention, as well as increased depth and strength of customer connections, such technology can significantly improve customer satisfaction and revenue.
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Imagine arriving at an international airport and one of the first greetings you get is from your bank, welcoming you to the new country and saying where to find free ATMs. That is now a reality for Westpac customers with smartphones.