Banking functionality will soon be added to IoT-enabled devices.The Internet of Things encompasses devices that gather and sharedata, and includes mobile point of sale and wearable devices, cars,appliances, health monitors, body scanners and intelligent shoppingcarts.

Microsoft has called the IoT a game changer, and experts havevisualized IoT devices reshaping how people live, shop and bank bytransforming big data into actionable information, providingefficiency gains and powering retail activities.

“The Internet of Things has the potential to bring banking toevery corner of people's lives,” Scott Hess, owner, licensedproducts, digital channels at the Brookfield, Wis.-based Fiserv,said.

Estimates of the size and value of the IoT market vary. Ciscoput the number of IoT devices at around 15 billion today and about50 billion by 2020, and Microsoft estimated 30 billion or more IoTdevices by 2020. Gartner predicted nearly 26 billion devices valuedat $1.9 trillion by 2020, while the International Data Corporationestimated almost $9 trillion in annual sales by 2020.

Hess said he believes the IoT offers an opportunity to deliverrelevant, timely information that helps people keep pace with thespeed of life.

“There are some potential avenues where I think the Internet ofThings will add absolute value for consumers,” Hess said.

On the other hand, the risk remains that people could beoverwhelmed by too much information. The challenge for creditunions and other financial institutions will be to determine howconsumers want to consume financial services through these devices,as well as relevant content for each device.

“When it's time for your financial institution to extendexisting financial services capabilities to the Internet of Things,consider what types of capabilities are practical for this deviceand how consumers will want to access them,” Hess said.

Hess said some devices may not be applicable to financialservices at all, at least in the near term, while others lendthemselves quite well to the delivery of financial information ortransactions.

For example, most accountholders are unlikely to want to set upa budget from a refrigerator door screen, but they may want tocheck balances or pay bills there, he said.

Fiserv said it is continuing to evaluate the impact developmentssuch as the IoT have on financial services. This includes testingtechnology, such as a prototype of skills for the Amazon Echo, andgauging consumer demand through research and focus groups.

Fiserv participated in the 2016 PYMNTS/Alexa Challenge in which12 teams and 14 companies demonstrated how Alexa, the name forAmazon Echo, voice-activated technology could reimagine howconsumers interact with its payments and financial servicessolutions providers. Alexa is a 9.25-inch tall cylinder speakerwith a seven-piece microphone array. It responds to the namesAlexa, Amazon and Echo.

Fiserv participated in this demonstration, showcasing Alexa'svoice banking skills and connecting the Amazon Echo to live Fiservdigital banking and payment services. The demovideo won the Best Use of the Technology award for showing howto use Alexa to advance money management and movement at the pointof thought.

Hess said a great deal of technology lends itself to developmentaround the ubiquity of particular functions and features.Biometrics, for example, did not test well with Fiserv's financialinstitution customers back in 2009, but once Apple introduced TouchID and people became more comfortable with finger scanning,adoption and usage grew.

“A new device like Echo could be used in daily life for a personto check their financial status, what bills are due, their balancesand how they are doing financially,” Hess noted. “There are somevalid use cases so when we go out and test it with users you'regoing to find that people are comfortable doing voice-basedbanking, when they weren't a couple of years ago.”

Fiserv's Alexa demo video, shown in this screenshot, won theBest Use of the Technology award at the 2016 PYMNTS/AlexaChallenge. The video shows how to use Alexa to advance moneymanagement and movement.

Will people, consumers or small businesses apply for a loanusing their refrigerator or through their Amazon Echo?

“Probably not anytime in the near term, but light bites ofinformation delivered to where I want it, I think is something youare going to see,” Hess said.

He added proactive alerts and notifications that are pushed outto all devices could blend into that as well.

“The Internet of Things is something people are coming to expecteven if they do not know it is called the Internet of Things,” Hessmaintained. “I think people will adopt them at their own pace andas they are comfortable with them.”

Where does Fiserv come in? The company said it wants to gaugeits financial institution customers' interests in this innovativetechnology. Hess said when Fiserv launched its Alexa skills demo,one of its largest credit union clients asked about its currentavailability.

“We built it so somebody would actually buy it,” he said.

Based on the interest from that large credit union, Fiserv plansto try to get its voice activation technology to market, either ina pilot for that inquiring credit union, or in full production.Hess added it is not far from being production ready right now,because it already works with an actual system connected to itspayment and digital banking platforms.

In addition to creating a way to bank via an Amazon Echo deviceand Touch ID, Fiserv is testing other biometrics products, such aseye and facial recognition products.

“Part of the innovation process is gauging feasibility,viability and interest by both consumers and financialinstitutions,” Hess said. “It is really important for us or anyoneelse that runs [aninnovation program] to establish that a culture of failing isOK. If half of the things we work on do not fail, we are not tryingenough things.”

Consumer acceptance is hard to predict, he added.

“There are companies like Apple that can actually driveadoption, because they launch products in an elegant and usefulway,” Hess said. “A lot of it is trial and error.”