Report: Location data provides ways to differentiate in a commoditized banking sector

Proximity data platform Unacast has released its Q3 Proximity.Directory report. Each quarter, the company drills into a different market segment or vertical to show how location technology and proximity are being used.

This report examines the use of location intelligence and proximity in the financial services industries. One interesting point the report makes is that while credit card transaction data is increasingly being used for a number of purposes (e.g., consumer behavior insights, analytics and company revenue forecasting), it doesn’t provide the complete picture because cash is still widely used for as much as 32 percent of offline transactions.

Unacast also argues that banking is now a commodity, but location data can be used to improve efficiency, the customer experience and loyalty:

• Brand and ATM placement optimization — based on foot traffic patterns, neighborhood characteristics and other variables tied to real-world behavior.
• Holistic personalization capabilities to meet rising consumer expectations.
• Advanced or enhanced services for banking customers, such as sending proximity alerts to an ATM machine to eliminate the need for a physical card for cash withdrawals.

The report discusses several case studies involving European and US banks around mobile payments, regulatory compliance and convenience experiences for consumers. One involves a Citibank pilot program that sought to accomplish a number of goals:

• Providing more targeted mobile experiences relevant to a customer’s context and location.
• Offering a secure, app-based method to open ATM doors (especially at night).
• Creating alerts for bank employees when VIPs enter their branches.

The report says there are now 17.3 million proximity sensors being used around the globe. This category includes a range of technologies: beacons, WiFi, NFC and others. Beacons remain the most popular proximity sensor being used today, with the majority of deployments as follows:

• Beacons — 58 percent.
• WiFi (being used for location awareness) — 25 percent.
• Near field communications (NFC) — 17 percent.

While beacon deployment is “stable,” according to the report (read: not growing), the other categories are increasing.

The US remains the leading market for proximity sensors and related technology. However, its overall lead has declined slightly from 35 percent of global deployments to 33 percent this quarter. The next countries in order are the UK, Canada and India; then France, Italy, Spain and Australia (all tied at 3 percent).

The following are the leading global software companies operating in the proximity segment, according to Unacast:

The report also regularly reports on technology penetration across multiple verticals. The following graphic compares proximity sensor deployments  across industries (globally) in Q3 2017 vs. Q3 2016.

Increasingly, location intelligence and proximity use cases are about insights and analytics, rather than push notifications and direct-to-consumer marketing. One of the larger stories this data points to is the “disappearance of beacons” as a marquee technology and its inclusion in a broader category: proximity technologies.