RFID May Boost Service at Banks

By Bob Violino

IBM will soon pilot a system that uses RFID to help banks identify and better serve their customers.

April 25, 2003 - Whether it's at a local bank or restaurant, everyone likes getting personal service. IBM has figured out a way to use RFID to help banks and other organizations to identify individual customers, so that they can be served more effectively.

The system involves embedding a UHF RFID tag in a passbook or loyalty card. When a customer enters the bank, the tag is scanned automatically and the person is identified. If it's an elite customer who warrants individual service, the system might send an instant text message to an employees cell phone, letting them know there is a customer who needs attention.

IBM's McKeown

Customers waiting on line are identified again as they approach the teller's window. Their bank balances are automatically called up on the teller's computer. If the customer wants additional service, the system can be linked to a bank's customer relationship management software, where personal information is stored, including how the person like's to be addressed and a history of their recent interactions with the bank.

The project is code-named "Margaret," after Paul McKeown's mother-in-law. McKeown is IBM's focus area leader for smart cards and smart tags for Europe, and he came up with the application after his mother-in-law didn't get good service from a new employee in her local bank branch, where she had been going for 30 years.

"The sort of people who go into bank branches regularly these days are older people who are wealthy, and people looking to do more complex transactions," says McKeown. "We're trying to use RFID to make bridge between all the good things you get with electronic channels and the touchy-feelly personal side you get in the bank branch."

IBM demonstrated the technology at one of its CEO conferences in South Africa in February. Now, it is talking to several European banks that are interested in piloting the technology, and he says one could be underway within a few weeks. "We've proved the concept," he says. "We're now we are looking to put it into a real bank. One is close to taking it."

To protect the privacy of customers, McKeown says that banks will likely adopt an opt-in policy. One goal of the pilot is to see how customers react to the system, whether they like the more intimate service or find it intrusive. Another goal is to see whether it can effectively be used to create opportunities for banks to sell customers additional products.

"Many banks are going through reengineering, so they are more like salons, where you sit together with the customer, and there's nothing between you," says McKeown. "Having this sort of wireless identification technology that's not fixed to a computer makes it much easier to develop a more fluid environment in which to do business."

The same system could be used in upscale restaurants or retail boutiques, where a high-degree of personal service is important. One benefit is that if a customer enters a store or bank branch that they haven't visited before, they can be treated the same way they would be treated in their home town.

The system could be linked to other technologies to provide some unprecedented levels of service. McKeown points out that some retailers are scanning customers' bodies electronically to determine their perfect size. That information could be stored on an RFID card, so you have it no matter which branch of a store you shop at. This would help the stores better match inventory to customers, and help customers ensure they always get clothes that fit.

"Like any new technology, the trick is to make sure you understand its limitations," says McKeown. "And you have to make sure the technology fits the business case."

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