The emergence of the Internet of Things (IoT) has created quite a buzz in the business world. IoT can be best defined as the interconnectivity of computer devices in everyday objects via the internet. It is estimated that by 2025, there will be 64 billion IoT devices worldwide. This figure is a big leap from the 10 billion devices in 2018. Further, according to McKinsey, 127 new devices globally are connected to the internet each second.
As with many other industries, we also see IoT in finance. The FinTech areas that are seeing the most changes include customer service, security, payments, internal operations, and infrastructure. In this article, we’ll talk about the eight benefits of IoT in banking and how you can use the current IoT banking trends to have the edge over your competitors.
FinTech is merging with IoT and AI to challenge banks in offering immediate support to customers. Smartphones can act as beacons by notifying account managers in financial institutions when a customer arrives at their branch. This way, FinTech firms can offer support quickly and save clients time.
By adopting beacons in daily operations, FinTech companies can assist customers in navigating while on the business premises. Instead of clients finding their way manually in the bank, they can state their reason for the visit. Then, they get matched with a suitable expert to resolve their issue. This simple solution improves efficiency, service delivery, and customer experience.
Queues are common in most banks and other financial institutions. However, they can be managed using the Internet of Things. Added to assisting customers to move around the business premises as well as locate the right rep to talk to, IoT devices can also perform electronic ticketing. In this case, the customer inputs their issue into a smart machine. They are then given a ticket with details about the representative they should see and their number in the queue. The device then notifies them when it’s their turn.
According to a Microsoft report, 96% of customers globally indicate that customer service is an essential factor in their brand choice. Customer service is also crucial in FinTech. IoT applications in financial services can also be used to improve customer care and service. Using smart devices that are context-aware, financial services can optimize customer service by sending personalized messages, welcoming customers as they arrive, etc.
IoT in financial services is also transforming how people make payments. Wearable smart devices are replacing smartphones and traditional credit cards in making wireless payments and cash withdrawals. Statista predicts that the number of connected wearable gadgets will get to over 1.1 billion by 2022 from 526 million in 2016. Thus, more people will be using these devices for daily activities in the coming years.
IoT wearables are already in use as a way of improving security in the FinTech industry. A good example is the Nymi smart wristband which uses an individual’s heartbeat for biometric authentication. This tech was tested and proved to be secure in making wireless payments.
The application of IoT solutions enables companies to boost efficiency using process automation. Using IoT in banking and financial services market will help to improve customer service and streamlining of daily functions. For example, Citibank adopted Beacons that allow customers to use their smartphones to unlock doors at ATMs during off hours rather than using key cards.
IoT FinTech startups can use smart devices to offer wireless self-checkout services on various domains. Already, Amazon is implementing such a concept across its self-checkout stores.
To conclude, the Internet of Things can have a potential impact on many areas of banking. As such, organizations should reassess their operations and rebuild them to ensure that they stay competitive. Given that the data provided by the IoT is quite useful, there is bound to be widespread adoption of the tech in financial services.
That said, the development of IoT remains a challenging affair. As such, it is imperative to work with competent teams to leverage the technology adequately. So, even if you turn to an external technology provider or an in-house expert, ensure that you work with a provider with an excellent understanding of financial technologies as well as deep domain expertise in IoT.
Read our other article “What technologies does CFOs require for leadership success?” to learn more about the essential technologies for CFOs.