Smart cities need banks’ data muscle more than governments
Smart cities need banks’ data muscle more than governments
Though governments are vocal smart city champions, some industry pundits say connected cities need the data power of private sectors like banking to evolve.
The future of smart cities was explored in a commentary on Payments Source by Hossein Rahnama, CEO of context-aware computing startup Flybits.
As Internet of Things (IoT) technology proliferates throughout global cities, there is an accelerating need for smart cities to produce and analyze huge rivers of data. Rahnama says this creates a formidable challenge for local governments who are struggling to handle such large volumes of information and to find ways of paying for the needed technology upgrades.
“The very nature of local governments — a collection of loosely connected, heavily siloed departments — should make this a not-so-surprising outcome,” said Rahnama. “The tech required to integrate departments in a way that makes even the most basic features of a smart city possible requires a huge investment of time and capital and a shift in culture.”
Despite the efforts of Cisco and IBM to help cities scale up their data crunching capabilities, he suggests that when the full force of the coming data tsunami hits, governments will be overwhelmed.
Smart cities can leverage private sector effort
However, he argues that the banking sector already has the chops to handle the massive data flows expected from emerging smart cities.
“It is more likely that private enterprise will transform the cities of the near future, and banks are in a unique position to lead that charge, with payments data leading the way,” he says.
“Banks possess the payments and other transaction data that municipalities do not,” adds Rahnama. “That means banks can provide the kind of intelligent services and personalized information consumers yearn to have.”
He also anticipates that physical bricks-and-mortar branches have a role to play in the smart city, contrary to the frequent prediction that physical branches will soon vanish.
“Instead of closing branches, innovative banks will leverage them as hyperlocal information hubs and community search engines,” he says. “In this new model, local retailers and members will communicate, consult, and recommend services through their local branches as proxies.”
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