Why Commercial Banks Are Turning to Proximity Technology | Street Fight

Why Commercial Banks Are Turning to Proximity Technology

Why Commercial Banks Are Turning to Proximity Technology

That location intelligence firms are able to use foot traffic patterns to predict the financial performance of businesses is nothing new. Foursquare has been doing it for years, most famously when it accurately predicted Chipotle’s sales drop in 2016. But a new report released this morning by Proximity.Directory shines a light on the ways commercial banks and investment companies are upping the ante by using location data to get the most out of the market.

In its Q3 2017 report, Proximity.Directory found that more hedge funds are utilizing proximity data to predict market trends. This information is also allowing investors to scale their market predictions and creating new economic indicators.

“The financial industry is historically considered to be very traditional, but it’s actually an industry that’s leading the way in exploring alternative forms of data – like location and proximity – to make smarter choices in the market,” says Thomas Walle, CEO and co-founder of Unacast, the proximity platform behind Proximity.Directory. “It’s an exciting time for finance and we wanted to explore that more fully.”

While Foursquare has made waves analyzing foot traffic patterns to predict sales performance in the past, Proximity.Directory found that today’s top hedge funds are using a mix of satellite and IoT data, in addition to foot traffic data. Location data is also being used by commercial banks to improve efficiencies, identify underserved markets, and maximize profitability. For example, a bank trying to decide where to open a new branch or place a new ATM machine might look at foot traffic trends to determine which areas of the community are most underserved.

Looking at the data, Proximity.Directory found that a majority of U.S. consumers still pay for things with cash, despite the ubiquity of credit cards and all the talk surrounding mobile payments.

“We’re such a digitally-focused world, that not having access to that volume of information seems unfathomable,” says Walle. “Location and proximity data is making it possible to unlock what essentially used to be a giant black box of real-world behavior for consumer banks and investment firms.”

Proximity.Directory’s report also includes case studies with details about some key pilot programs run by major players in the financial industry, including Citibank and Bank of America.

Citibank ran a pilot program to research new ways to provide more “hyper-targeted mobile” experiences to its customers this past summer. The company was also hoping to find a secure way to open ATM doors and create alerts for branches when VIP customers entered selected banking center locations.

So how did they do? According to Proximity.Directory, Citibank worked with Gimbal, the integrated mobile data, advertising, and marketing platform, and used the vendor’s geofencing technology at certain events that it had sponsored, such as the Today Show/Citi Summer Concert Series. Using Gimbal’s software, Citibank was able to draw geo-fences around key areas and message users of its mobile app who were near Rockefeller Plaza and other areas that were a part of the concert series. When users crossed those geo-fence barriers, they were sent relevant messages from Citibank.

Another bank that has utilized location technology is Bank of America. The banking giant worked with Pitney Bowes Business Insight on a geographic analysis application that identified its banking centers in low income neighborhoods. Proximity.Directory found that the project resulted in 25% time cuts, compared to manual audit of a network of banking centers.

“This industry is still relatively young,” says Walle. “Given the impressive growth and new applications that we continue to see, I believe we’re just scratching the surface of what proximity and location data can do and the impact it can have across industries.”

Stephanie Miles is a senior editor at Street Fight.