The bank of things: An empirical investigation on the profitability of the financial services of the future

Purpose – The purpose of this paper is to study the existing relationship between the products offered by the banks of things and the relative return on equity (ROE). This can be used to highlight the benefit of carrying out investments to transform traditional banks into banks of things. Design/methodology/approach – The sample used in this empirical research contained 3,692 banks that, in 2013, were located in 28 European countries. To determine whether the Internet of Things (IoT) has an effect on the banks’ profitability, the authors employed the classification analysis method (classification and regression tree). Findings – The empirical analysis shows that a high ROE for banks is expressed by the following features: first, banks offer IoT retail services to customers; second, banks offer IoT corporate services to customers; third, banks offer customers a large number of home banking services; and finally, banks offer customers a large number of traditional investment services. Research limitations/implications – The survey covers a sample of European banks. It would be necessary to extend the sample to other geographical areas. It would be possible to generalize the results. Originality/value – Scientific research on the implications of the “Bank of things” are still few and fragmented.