Retailers were the among the earliest adopters of geofencing technologies for mobile marketing campaigns while other industries have been hesitant to cross into this new territory. In the past few years, the financial services industry has started embracing geofencing and mobile-first strategies because traditional banking and financial activities were becoming obsolete. Consumers and businesses are constantly on-the-go and always connected via their mobile devices so anything that blocks or slows progress is often abandoned in favor of the next best alternative.
In this increasingly competitive mobile-first environment, banks and financial institutions that are incorporating geofencing are able to enhance customer service while also increasing transactions and revenue.
What is geofencing?
Geofencing is a location-based service that creates a digital geographic fence (geofence) around the physical location of where a customer might visit throughout the day. The customer’s mobile device acts as a probe that reports their location. Brands and financial organizations are prompted to make a decision or take an action once a customer enters or exits the geofence.
How are financial organizations using geofences?
Here are four geofencing use cases in the financial services industry we’ve seen executed successfully.
1) Verify Location for Transaction Fraud Prevention
Financial organizations can utilize mobile device geolocation data to assist with transaction verification for potential fraudulent activities. A geofence can be used to detect when a customer is truly outside of their home area so the financial organization can approve transactions with confidence. This is helpful when a customer is traveling abroad and it can also be used to detect fraudulent activity on their account when transactions occur in a location outside of their home area.
2) Expanded Partnerships with Merchants
A financial organization’s relationship with merchants is critical because it can be a reliable source of revenue. By using geofences to send notifications promoting merchants and supporting their sales, a financial organization helps build a good working relationship while also increasing overall transactions and revenue for themselves.
3) Improved Loyalty Programs
Consumers have become more demanding based on their on-the-go lifestyles thanks to mobile devices. They want more added value to keep their business and they want it yesterday. Forward-thinking financial organizations are combining the power of purchasing information with their customer’s location to expand loyalty programs. By evaluating this data, the organization can now offer customers specialized deals and promotions based on merchants they shop with the most.
4) Identifying HNWIs (High Net Worth Individuals)
HNWIs are priority customers for any financial organization. They often require the highest level of service in order to maintain their business. Setting up geofences around branches and banks helps a financial organization identify and locate HNWIs the moment they are onsite. This advanced notice ensures the financial organization can provide the appropriate level of service and accommodate their needs.
Banks and credit card companies are already seeing results with location data as a tool for mitigating fraud, reducing false positives and stopping identity theft. To stay relevant in today’s mobile world, financial organizations need to make themselves available where customers are at in any given moment. They must also remain flexible with business customers by remaining open to new ideas and allowing them to extend their own offers to consumers.
