A Study on Brand Building of Financial Services with Application Ofinternetof Things (Iot)

A study on Brand Building of Financial Services with Application ofInternetof Things (IoT)

Abdul Saboor Mohammad1 Research Scholar, Depttof Commerce, Aligarh Muslim University, 09897758568

MohdAtif Afzal2 Research Scholar, Depttof Commerce, Aligarh Muslim University, 08791101631

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Abstract

This paper aims in understanding the application of Internet of things devices in the service industry in large and financial industry in specific. In the present scenario where the world is converging over the use of IoT smart devices, how this can help the brand building for any company. A customers overall perspective for any brand is understood and is being related with the how(s) and why(s) of use of Internet of things.

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Keywords: Internet of things (IoT), Brand-building, Banking & Financial services

Introduction:

In today’s world, internet has revolutionized the way we do things. The most trending aspect of internet is aggregation of data and turning it into a productive asset which is the basic idea behind Internet of things. It is the interaction between physical and virtual world which changes the experiences of carrying day to day work. All the connected devices continuously communicate in a synchronized pattern to generate useful information for the people which can be applied to businesses in optimitising their functions. Internet of things can be applied to all the dimension of any firm, it may be marketing, finance, operations, logistics etc. the relevance of internet of things is more prominent in service industry viz banking and financial services where the moment of truth is the essence of customer service. Internet of things not only delights the customer expectation but also assist the internal employee to carry the operation. Hence internet of things not only proves to be helpful in one dimension but increases overall performance of any business. A delighted customer helps a business to build its brand which can be achieved with the application of IoT.

Literature review:

Berry (1987) has defined differentiation of brands is most difficult in the banking industry and plays important role when branded.Kapferer (1997) defined brand as “the brand is a sign -therefore external- whose function is to disclose the hidden qualities of the product which are inaccessible to contact”.Egland et al. (1998) was the pioneer study, which roughly estimated the number of USbanks offering Internet banking and analyzed the structure and performance characteristics of these banks. It found no evidence of major differences in the performance of the group of banks offering Internet banking activities compared to those that do not offer such services in terms of profitability, efficiency or credit quality. However, transactional Internet banks differed from other banks primarily by size.The American Marketing Association (AMA) definition of a brand is “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors”.Kotler in his book mentions branding as “a major issue in product strategy” which meant that branding was only confined to product delivery and communication fails to draw the image”.Among many models, one famous is given by Aaker and Joachimsthaler(2000) which states that within the conventional branding model the prime aim is to build brand image; which is a tactical strategy meant for short time horizon objectives.In a study conducted by Singh et al. (2012), states that Asia is one of the leading regions when compared in publishing and sharing information of consumers. This is due to the growth of internet uses and readiness of sharing data and more relevant in brand involvement.

Objectives of the study:

• To understand the application of IoT on brand building of financial services.
• This paper aims in examining the reasons behind successful brand building challenges faced by financial institution over security and privacy concern.

Internet of things (IoT) and Banking:

With the increasing use of smart devices, finger sensors, smart chip enabled cards, automated tele-machines etc has changed the traditional banking into IoT enabled banking. This can be termed as an explosion of devices which create value with direct and indirect points of interactions which can be cultivated by the banks for providing customized solutions to individual customers. Enormous amount of data can be thus utilized in relationship management of customers. These devices act as intelligent receptors of information and then disseminating when useful. Banking services include insurance, healthcare and day to day financial services like easy transfers etc. inculcating receptors devices into these function ease the task of customers.

Concerns of IoT enabled banking:

Banking industry in particular and service industry in general faces numerous challenges with the use of internet devices. Privacy-data collected in banking is most of the time very secured in context to the financial institution as well as for customer. IoT brings exposure to known and unknown risk. Security is another concern where the gathered information should not be manipulated and the compromised devices may bring financial and physical risk to attached party. Third important challenge is identity management which exists as the devices are used by multi-party at multi-location at multiple times, hence the knowledge collected need to be classified into retaining-useful subject and discarding useless background. Personalization is expected with the use of IoT in banking and it becomes concerns of the banks to make application of internet of things devices more personalized. Reliability is one of the major challenges which make the customer feel that the IoT, though being complex but provides easy and better solutions. Last concern is collaboration, where a number of devices gather information and turning the information into strategic decision making needs and hence collective and synchronized receptors of information is needed.

This paper aims in understanding the application of data gathering and fostering into productive outcomes for financial industry with the use of IoT.

Branding:

Branding has existed from the very start of era when man exchanged goods and transacted. The word brand came from “old norse bandr” which means “to burn” where cows in 1700-1800s where stamped using hot rods to be labeled. Nineteenth century saw the concept of radical push where any commodity was not only produced for consumption but also made different and recognizable in comparison of other such products. Post world war saw the explosion of brands with the globalization of economies.

Simply it can be said brand is differentiation of a particular product/service from other such offerings. A trade mark, a mission statement, a logo, a slogan, product itself and the advertising along provides the base for brand building.

Branding has been talk of town for business houses from many decades. Every company, it may be small shop to huge multinational corporations aims in establishing its name in the form of recognizable symbol, trademark etc which brings the basic idea of brand-building.

Brands help the company to position its offering in the mind of the customer and assist in strategic decision making. From a local brand to global brand, all focus on maximization of profits which are achieved when the brands represents special position in the mind of the customer.

Now it be a manufacturing industry or a service provider it becomes mandatory in present competitive scenario for a company to build a brand.

Brand building:

Literature suggests comprehensive approaches and philosophies guiding the building of any brand. Every approach of brand-building is strategic and tactical decision for a company which starts with the assessment of one’s’ own offering. It’s important to understand the consumer insight deterring the building blocks in the cognitive. The blocks here referred are the aspects and attributes that are attached to a brand which may be abstract to define but felt in the inner mind of a customer. Assessment of a brand also includes the companies’ identification of points of differentiation that the product exhibits when placed on the shelf of market which makes the customer recognize the brands and attaches the affective-state before activating the cognitive-state. Analysis leads to development of a proposition which is termed as brand promise. This includes the essence of the insight that a customer carried along the product or service. After understanding the brand contextual to the offering, brand blueprint development includes creation of visual representation such as logo, slogan, by-line etc. fourth stage is culture development of internal employees and all staff members along the proposition which is referred as internal immersion of brand. Lastly the branding is leveraged for creating brand advantage by creating communication channels, engaging brand audience and growing brand equity.

Internet of things (IoT) and brand building:

Brand building has always been aided with the use of information technology. Use of internet to assess, market, promote, advertise and evaluate a brand has been extensively exploited from many decades. Use of automatic devices helps company to assess its strength and weakness. When a customer uses smart device to enter his preferences over choice of any product or services should be recorded and converted into specific brand images and brand building specifications. Use of Ad-word by Google which optimizes the search engine, similarly a company should aggregate the data received and turn it into useful knowledge while development of any brand. Assessing stage of brand image includes internal and external analysis of point of differentiation. Customer uses smart devices, phones, intelligent robots in transmitting its inner state of want which can be carefully gathered from the point of contact which can be used in the designing of any strategy regarding branding. The essence of brand promise lies in understanding the affective emotional aspect of any brand which can only be developed by getting close contact with the customer and the internet devices are best tool to extract such information from the customers.

Many advertising companies carry campaign where the customers get involved in development of logo and slogan. This approach can get more effective with the application of IoT. Most important stage of brand building is making suitable culture for the internal and external party viz employees and customers and implication of IoT can boost this stage. Customer’s usage of different smart devices or points of touch can be utilized in information flow to and fro.

IoT enabled banking and building of brand:

When a customer avails the services of any bank it may be savings, credits, insurance, health care, mortgages etc. banking industry has evolved with the application of latest information technological tools internally and externally to its operations. A report from capgemini mentions that many companies like apple are installing devices which reads and monitors the health of the customer which can provide data to banks for insurance products etc. another aspects can be use of GPS like devices can help motor insurance calculations and real time premium payments. Another major aspect can be customer support of the banking industry can develop its future and present servings with the use of automatic devices.

Use of automated tele machines (ATM) and information kiosk are not new to the banking industry which is aligned into the gathering of information. All this can help in the development of new financial services which helps the company in turn boost the image of the company which is reflected in a stronger brand.

Conclusion:

We have observed that the literature review of brand images and brand building suggests that any company can only build a satisfying brand if it not only fulfill the core demand derived from a product but affirms a relationship between the customer and the company. A long lasting relationship is the core of any brand building. In context of service industry, brand is the basic point of difference what a consumer grabs and moreover for a financial company, it’s the brand which ensures trust, empathy, reliability and competence offered along the services. With the advent of internet of things devices, this information cultivation provides a stable platform for brand building. It is estimated by 2020, the size of IoT to be roughly around 19 trillion $ and banking industry amounts a significant share in the service industry. This proves that the explosion of IoT significantly impacts the banking industry.

Suggestions:

• A banking institution should see this as an opportunity of strengthens its relationship with the customer. It should spend a considerable amount in the research & development of these smart devices which will provide, gather, segregate, classify and evaluate useful data and information needed for a brand building.
• Moreover the concern and challenges faced while dealing with the IoT should not be ignored which include security and privacy at large.
• More secure internet devices should be used as a secure banking directly corresponds to trust which is one of the factors in brand building.
• We see a future world where not only banking industry but all the industry converges to application of Internet of things in sustainable and better living.

Limitations& directions for future researches:

• This study is confined to banking industry only which may be further applied to other service industry.
• The study can also be done in product related industry where the IoT applications can be easily read and analyzed.
• Future research can be empirically done based on primary data which shall provide more insight of brand building.

References:

1. Aaker, D. and Joachimsthaler, E. (2000), Brand Leadership,The Free Press, New York, NY.
2. Berry, Leonard(1987), “Big Ideas in Services Marketing”, Journal of Services Marketing, Volume 1, No: 1
3. Egland, K. L., Furst, K., Nolle, D., E. and Robertson, D. (1998). “Banking over the Internet”, Quarterly Journal of Office of Comptroller of the Currency, Vol.17 No 4, December.
4. Kapferer, Jean-noel (1997), Strategic Brand Management, Great Britain, Kogan Page.
5. Kotler, Philip (2000), Marketing Management. The Millennium Edition, Upper Saddle River, Prentice Hall.
6. Singh, N., Lehnert, K. and Bostick, K. (2012). Global Social Media Usage: Insights Into Reaching Consumers Worldwide. Thunderbird International Business Review, 54(5), 683-700.