With 2016 set to be another great year for innovation, what should the industry be preparing for?

By Michael James | 22 December 2015

‘Smart’ will be the prefix of 2016. Organisations will set their sights on smart use of data, smart contracts, smart pricing, smart security and of course, advancements in blockchain technology. Such smart innovation will revolutionise a variety of business processes but in particular, I predict developments in the following key areas:

Device based payments

Apple Pay has taken an existing technology and made it accessible. With other platforms increasingly supporting the same technology, people will be swiping their phones and watches to make payments. While this isn’t fundamentally new technology, we will see it used more often as a growing number of challenger banks come to market. The increase in device based payments will expose more live data on spending habits, and therefore, facilitate more compelling insight. The same kind of data that ‘store-cards’ gather will be available on a smartphone or phone app and we can even look forward to banks sending reminders to customers about their expenditure or warning that there are better deals available at point of purchase.

Data Use (APIs and social media data)

For many years, marketers have discussed offering products and services based on segmentation and demographic information. The idea of segmentation has risen to prominence in recent times and we are now moving towards a world that will use disparate data sets to make customer experiences more targeted, personal and focused. The Internet of Things will bring this closer to reality, providing much more data for businesses to work with.

The rise of APIs and spending data at the point of purchase may provoke a counter response from vendors, with smart pricing in supermarkets and almost certainly an increase in smart pricing for insurance and protection products. This smart pricing will be based on real data from smart watches, cars and could even connect with other aspects of cities and homes. Such data will enable businesses to better understand customer needs and provide the best possible price for the service required.  However, this pricing may have its down sides. Imagine smart watches were able to tell the supermarket how thirsty you feel and consequently the supermarket increases the price of a drink. Digital lenticular (similar to 3D) signage could make this a reality, with pricing that follows you around the store.

Distributed Ledger technology/Blockchain/Smart Contracts

Institutions and fintech companies will be pushing the use of distributed ledger technology. To facilitate this, there will be a growing effort on finding a standard fintech distributed fabric that will allow more innovation in years to come. Eris Industries is currently heading-up this kind of work for cross-sector benefit.  Next year, the big break for blockchain technology will be the exploitation of the irrefutable provenance a blockchain can give. Be it in securities, funds or shares, knowing the history will reduce risk and improve transfer speed.

Outside of financial services, this inherent provenance will be exploited in gems (everledger), paintings and potentially a personal digital history. The rise of the Internet of Things will enable the rise of smart contracts, connecting financial services businesses to the physical world. Business finance may be the early beneficiaries of smart contracts, possibly in loans and invoice discounting, where a smart contract and big data processing power reduces risks and costs for the parties involved.

Robo advice

Robo-advice should be revolutionised. The current method of defining customers’ risk profile based on an automated Q&A will evolve. Instead, we will start seeing firms using data and complex algorithms to offer financial products that are appropriate to an individual, along with some automatic fulfilment solutions. This could be the foundation to an individual having a smart contract that maintains the best investment solution for their entire life. While such evolution could be slowed by a lack of clear understanding about regulatory implications and issues attached to legacy technology platforms in financial institutions, a focus on the government’s open data projects in pensions and investments could speed up progress in this sector.


Smart / Adaptive security will be high on the agenda. More data is becoming available, more apps are being developed and more devices are being released. In response to this, security will have to be smarter, more adaptive and able to use the same data to vet and assess individuals. Using much wider data to confirm identity will make fraud more difficult. We will also see an evolution from traditional antivirus software to something much more sophisticated.

Location data

Beacons may start to play an increasing role in day to day experiences, but their usefulness will always be restricted by the battery life of a smart device. However, efforts are being made to improve this, with devices such as lumopack and Prieto’s copper foam substrate providing much smaller, higher density and longer life batteries.

Activity profiling

Towards the end of next year, activity profiling may well be a popular identification method.. For example, unique computer and smart phone settings will become digital fingerprints that expose individuals’ web interactions.

How we interact with companies through connected devices (digital body language) will help marketers learn more about how they should position services with individuals. Facial recognition will also increase in popularity and I certainly envisage banks greeting individuals personally by screening their face or another type of beacon as they enter the branch. Being personally recognised will be the beginning of a much improved ambient digital experience made up of institutions that ‘know’ the individual, using this insight to produce adverts that talk to them directly. These experiences may even encourage customers to improve their behaviours, for example save the spare few pounds they have left over at the end of the month - a strategy already being used by Westpac bank.

By Michael James, Head of Technical Architecture and Principal Consultant, Altus Consulting.

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