The Internet of Things (IoT) is a way where billions of devices are connected to communicate, share information, anticipate needs, solve problems and improve efficiency. As per Gartner forecast, there will be 25 billion IoT devices in operation by 2020.
IoT has changed the way banking services were done by connecting infrastructure and influence the way they interact with the service world. Since these industries deal with huge data transfer, gathering and analyzing of data, IoT has a huge impact, that is benefiting both the customer and the financial services as a whole. Here are five benefits of Internet of Things in Financial Services world.
Connecting almost all types of devices IoT has made its huge impact on the insurance industry and will have its involvement over the next five years, through telematics data for vehicle insurance, health insurance and so on. This helps the insurers to capture the customer data effortlessly, improve business practices, cost cuts, which will add significant value and increase revenue opportunity by better evaluating client’s risk.
For example: automobile insurance, some company offers their clients UBI (usage-based insurance) that tracks the driving habits of the clients by using sensor devices, connected to their car to monitor driving, of course with their permission and with that data insurance company offers discounts or other facilities for healthy and safe behavior.
Banks have to deal with big data and analytics everyday and they have to monitor all the transactions to avoid any fraudulent practices. IoT helps in making the information readily available and also consumable by other system and networks. A customer using their bank mobile app has an option to take a picture of any required documents and upload it using their smartphone, which will increase the productivity, boost efficiency and drive fundamental improvements in customer experiences.
Bank gives home loan to all qualified people. Banks using IoT technology give the option to their borrower to install a sensor in their new house with their permission, wherein they agree to automatically issue a home improvement loan when there is any damage and requires repairs. The sensors in the wall prevent large scale damage and benefits loan borrowers with discounted rates, with no additional paperwork and later at any point of time they can drop out from this agreement.
Reliable in-store connectivity provides valuable customer information to financial services and using beacons – Bluetooth low energy technology, credit card company can send a notification to the targeted customer regarding their credit qualification, by tracking their location, a new way to target market that includes specific advertisements and notifications. Due to the rise of IoT in financial services, it offers personalized and reliable services to their customers with the information, which are being captured and shared within the context. IoT soon going to accelerate in how financial services interact with the customers and allows them to meet customer’s needs with relevant content.
Financial services are investing more in reliable connectivity solutions to grow their business and to give their customer best experience by providing excellent services and products. All this can be managed by the cloud-based applications, where financial services store their customers data, using customer relationship management (CRM) software. IT is a powerful tool to utilize content management systems (CMS) and organize documents in the cloud, with the reliable connectivity and solid security. Which will improve business operations and strengthen client relationships, which will be benefited and judged by the end users.
Where there are so many devices transferring huge data, privacy becomes the priority and information shared needs to be secured all the time. This is no new thing, when devices are connected to a network, there is chance of data manipulation, which may lead to undesirable consequences like financial risk. Internet of Things helps to protect customer’s data from the inevitable breaches, including secure payment process and information management.
For example: When a customer connects their refrigerator to the internet, refrigerator automatically senses that the household is running out of eggs and orders a fresh eggs from the local grocery store. IoT app in financial services is for payments which takes place seamlessly in the background. Here we are dealing with the customer’s bank account, so while making payment for the groceries using a refrigerator, customer must have the credentials to avoid any fraudulent transactions. Also gives customers a good experience and loyalty, that could help in collecting data and use it for marketing and services.
IoT will soon overtake the financial services, where the end users will be able to do almost everything at their convenience, from anywhere and anytime through the internet. It offers new opportunities to solve problems, add value to financial services and to its customers – there is no area in life that would remain untouched.