Where FinTech meets geolocation: 5 key case studies

Where FinTech meets geolocation: 5 key case studies

The latest innovation in the financial services industry, FinTech is transforming the way we buy, borrow and lend. Nowhere is this more true than in the private sector, particularly banking, where traditional services and digital technology are combining to offer approaches that are perfectly tailored to the needs of mobile customers. When it comes to managing their money, customers are no longer required to visit their local branch: instead, payments, transfers, savings, and even financial advice can all be handled via smartphone. While dismissed by some as just another instance of ‘Uberisation’, there’s nevertheless a compelling case to be made in favour of FinTech when it comes to helping banks stay up to date with the changing needs of their customers.

Locating customers on the move

Keeping track of customers’ buying habits is commonplace nowadays, particularly for businesses with a large online presence. As a result, it’s crucial that businesses are able to take advantage of all the benefits FinTech has to offer.
When it comes to achieving smoother, more streamlined online transactions, geolocation works hand-in-hand with today’s innovative FinTech solutions to offer a more intuitive process, significantly improving UX while anticipating any potential risks. Let’s take a closer look with five defining case studies.

5 ways FinTech and geolocation are transforming online purchasing

Geolocation and B2B banking: the perfect partnership

Historically, the financial standing of a customer and/or their existing business were the two most important criteria when attempting to secure a business loan. In today’s digital world, this is no longer the case. Geolocation technology can help banks to evaluate the financial risks involved in lending to a business or entrepreneur. The key to this approach lies in successfully using location data.

For example, geolocation data might allow a bank to visualise local competition, footfall in a given area, local spending power, population densities, and so on. Taken globally, this information has the potential to significantly adjust the risks associated with business lending.

Shoe Shop, High Street, Anytown, UK
A customer visits their local bank and asks for a business loan. They’re looking to open a shoe shop on the High Street. Fortunately, there exists a quick and accurate way to evaluate the risks associated with this business venture: geolocation technology. Whether in the form of geocoded payment terminals, a location code on the store’s receipts, or a map of nearby competitors, geolocation technology can help banks assess whether the loan is likely to be a good investment. For example, if another shoe shop or franchise already exists in the vicinity, the customer’s business is unlikely to fill a gap in the market.

Take the fuss out of online shopping with location messaging

Even the most secure online transactions can be targeted by fraudsters. Fortunately, localisation technology gives shoppers added protection against online fraud.

Geolocation data allows online merchants to locate not only customers, but any credit and/or debit cards associated with their account. By tracking the address associated with the card and matching it with the purchase location, as well as the chosen delivery address, it becomes far easier to identify potentially fraudulent transactions.

In the case of a suspected fraudulent or erroneous transaction, the user will receive a text message requesting them to confirm their order. By comparing the likelihood of a given purchase with the customer’s existing profile, online merchants can skip sending confirmation requests for each transaction, focusing instead on unusual or unexpected buying choices – good news, especially when we know that “Verify purchase” notifications can lead to a huge drop in conversion – up to 46% in some cases! Not only that, the customer experience is significantly improved.

Exciting opportunities for credit card companies: Visa, Mastercard, American Express…

Mastercard is already an expert when it comes to geolocation and its customers – e-retailing and in-store purchases alike. The company’s Decision Intelligence solution allows merchants to cross-check the physical location of the purchase, whether online or in-store, with that of the buyer. The algorithm works via geolocation data obtained from the customer’s smartphone – in this case, their IP address. What’s more, Mastercard has also debuted artificial intelligence solutions enabling retailers to see whether a given purchase a) matches the customer’s buying profile, and b) is supported by sufficient funds in their bank account.

No more fake frauds!
So-called “fake” frauds – legitimate transactions that, by virtue of their unusual or unexpected nature, may set off a fraud alert, potentially stopping the buyer from completing their purchase – cost retailers over $118bn. every year in lost revenue! Compare this huge figure with losses linked to actual fraud – a paltry $9bn.

100% secure payment via card

Opting for a secure payment terminal or card machine can prove costly, especially for small businesses. Unfortunately, the convenience associated with payment by card means your business is likely to lose out if customers can’t pay with their debit or credit card.

Fortunately, newcomers such as SumUp or iZettle are beginning to shake things up when it comes to securing payments by card. These businesses are just three of many spearheading the charge towards mobile payment, furnishing businesses with chip and PIN readers which, when combined with a smartphone featuring a payment app (Apple Pay, Samsung Pay, Google Wallet), guarantee quick, safe payment without the need for credit or debit cards.

When geolocation technology is included alongside these innovative payment solutions, purchases can be tracked individually, creating a user-unique purchasing profile ‘labelled’ with transactions according to date, place, location on Google Maps (which, naturally, includes all its API), etc. If a purchase is attempted that does not match the data contained in the above profile, the retailer is able to quickly assess and, if needed, prevent, a potentially fraudulent transaction.
As well as guaranteeing safe, secure payment, geolocation can also be used to reward customers. A customer paying by credit or debit card could receive loyalty points as a result of their card being automatically located, eliminating the need for a separate loyalty card system.

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With the help of FinTech and geolocated payment solutions, it’s possible to cut out the middleman (namely, your bank) when looking to introduce mobile payment to your business. In just over a fortnight, you’ll be able to accept all types of payment, including card and contactless. What’s more, there’s no annual lease (unlike most traditional card machines), commissions are minimal, and transactions are guaranteed to be 100% secure – great news for merchant and customer alike!

Aggregated accounting: geolocation and personalised financial management

When it comes to offering a more personalised approach to online customers, banking and geolocation go hand-in-hand. Budgeting, transfers, overdrafts, managing saving and investments – it’s now possible for customers to have a truly global view of their finances, all via a single application.

Case study: Bankin
Bankin allows users to view and manage all of their financial information in a single app. Transactions are displayed simply and clearly, while weekly budgets allow for on-the-go spending tracking. Meanwhile, automatic fraud detection helps ensure online security, alerting users when locations fail to match up.

Other key advantages of location-based financial technology: automatic currency conversion when travelling or on business, bank locators, chatbots and/or global customer support… the list goes on!

To sum up, geolocation is now a crucial part of online user experience – and it’s safe to say that FinTech industry leaders are at the forefront when it comes to developing intuitive, high-performance applications. So, when will you start including geolocation in your digital strategy?

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