Web 3.0 Has Enormous Potential for Banks

If you don’t think Web 3.0 isn’t already transforming the way banks do business, consider this story: The American bank BBVA Compass recently decided to drop the $25 anniversary bonus on its checking accounts. On the surface, the move seems a bit risky, doesn’t it? But the people at BBVA have been embracing Web 3.0 and all its benefits, including the ability to use artificial intelligence to mine for online sentiment among their customers. What they found is that the $25 checking bonus wasn’t a big deal with customers. They instead favoured debit rewards and other customer friendly features.

Therein lies the promise of Web 3.0 for the banking industry. Where customers used to be simply passive Internet users, they’re morphing into key decision-makers within the vital operations of their banks. They might not be aware of their power and influence, of course, but the banks themselves know full well how valuable their thoughts and actions can be to their long-term success.

We’ve come a long way from the early days of the Web, when banks would use their sites to post the same kind of information they would print in pamphlets or on posters. It took the arrival of Web 2.0 for banks to begin using the Internet to communicate with their customer base more effectively. The development of social media had even more profound effects: Banks now study customers as complex, multifaceted people rather than simply as borrowers.

Because of the advances in data mining that Web 3.0 will deliver, a customer who visits the bank’s Web site should expect to receive the kind of personalised service that used to come only with knowing the local branch’s mortgage officer over the course of decades. A bank can integrate social media into the customer experience so that when he’s checking the Web site for mortgage information, the bank can, in real time, send him product recommendations based on his specific needs.

Banks will also see the advantages of Web 3.0 when it comes to loans. Banks use applications to look for diverse details about the prospective borrowers, including personal items (name, age, credit score, etc.), employment and income, and assets and liabilities. With Web 3.0, lenders will be able to source wide-ranging data about a prospective borrower — subject to privacy protection. What banks will get is a more “authentic” decision-making process.

For example, the loan platform can source income details of the borrower either through (in the United Kingdom) Inland Revenue data or by data exchange with the borrower’s banker in real time. The platform can also connect with the credit scoring application in real time to gain more information about the liabilities and credit details of the borrower. The availability of structured data from multiple sources can throw interesting insights on the borrower as an individual, helping lenders assess one of the prominent Cs of underwriting: character. Qualifying a borrower for a product rather than declining applications during processing or underwriting could save on untold operational expenditures.

True, we’re still making predictions as to exactly what kind of influence Web 3.0 will have on the banking industry. And the implementation and realisation of benefits will take time. But what I’m confident now in stating is that Web 3.0 will have a marked impact on the banking industry and will help lift it to even greater heights.