IoT and its significance in Financial Services Industry
The Internet of Things (IoT) is bringing in the next industrial revolution and drastically transforming how we live and experience technology today. IoT technology has a positive impact on Fintech companies and banks’ work. Banking is becoming more convenient thanks to the Internet and many connected devices. As technology improves, IoT in the BFSI will gain popularity.
What is IoT?
IoT is a system of devices connected to each other through the Internet, allowing the operational data between them to be sent and received in real-time.
IoT in the Financial Sector
With the BFSI sector growing increasingly digital, IoT plays a vital role in streamlining the data part. Several IoT trends predict that the implosion of IoT will take the financial technology sector to the next level, including the leading IoT platforms, operating system updates, and enhanced device architecture.
How IoT impacts the Financial Industry
- Gathering Data in Real-Time: IoT helps in gathering data in real-time. Important financial decisions can be taken speedily with available information. Best investment-related strategies and decisions can be executed using data available in real-time. With this, the banks will have an advantage as they will be able to help their customers with suitable and to the point information.
- Customer – Centricity: Keeping customers happy is always beneficial for the Banks. Offering a personalized experience to the customers is crucial in this rapidly growing competitive world. A few practical benefits of customer-centricity are:
- Customer creditworthiness can be evaluated.
- Customers can save time finding the nearest branch with the help of IoT.
- The quality of customer support can be made accurate, faster, and precise, as bank staff will be able to get real-time customer data.
- Wallet of Things: The term “Wallet of Things” refers to the concept of connecting any device with embedded payment functionality. Mobile phones enabled with Near Field Communication (NFC) can be extended to work using IoT, resulting in even a simple and frictionless payment experience. We could see increased instances of digital wallets being used for IoT based payments.
- Instant life insurance: Health insurance management is expected to drastically change in the upcoming years with the advent of IoT through wearables like Fitbit. Customers can instantly take insurance by connecting their health bands to insurance service providers who can validate the customer’s health vitals and provide instant insurance. Insurance providers will also be able to constantly monitor the health vitals of their existing customers and alert customers on impending health conditions that the customer might face shortly. E.g., Insurance providers can monitor customers about the heart rate and sleep patterns and alert the customer in advance.
How IoT Revolutionizes the Fintech World
Below are some of the companies that have taken IoT quite seriously and made great strides with a first-mover advantage:
- Kontakt.io : Kontakt.io is a provider of low-energy Bluetooth beacons that are used in PoS machines. It is used to bridge the gap between the real and the digital world. This technology is used for mobile payments, thus replacing conventional point of sale technologies. This results in a greater customer experience without needing to spend huge time at bill counters.
- Armis : Security in the Banking Industry is of utmost importance. Armis is a security platform to protect IoT devices used in various businesses, including banks, by allowing them to see and restrict every device on their network. It provides real-time and continuous cyber-security asset management, risk management, automatic identification, and disconnection of unmanaged devices. The Armis Platform discovers every device, analyses the risks, and automatically acts when device behaviour becomes suspicious.
- Mastercard : MasterCard is a leading payment technology company. It has formed strategic partnerships to create a variety of payment-related products that simplify several daily tasks. Mastercard has teamed up with Samsung, allowing consumers to order groceries from their refrigerators. The first shopping app to be integrated with a refrigerator is “Groceries”.
- Metromile : With the help of IoT based connectors, Metromile offers vehicle insurance plans based on distance, mileage of vehicle and driving behaviour of the customer. The genuineness of claims can be assessed easily, and claim processing is very quick.
Above are just a few examples to showcase how IoT is revolutionizing the banking and fintech world. It is evident that how financial organizations across the globe are already moving beyond their comfort zones to adapt to IoT technology and become market leaders.
Author: Akshata Mhaiskar, Technical Architect – Presales, Profinch Solutions