Financial institutions for long have been riding on their strengths such as infrastructure, trust, and vast customer base. For decades, they dictated the terms and shaped the financial lives of billions of people across the globe. However, over the years, they have always had a big monkey on their back in terms of customer experience and ease of use. The rise of FinTech over the last decade has exposed this crack and posed a threat to their dominance by bringing forward the notion of anti-incumbency among the new generation of customers. Customer experience is such an important aspect in the mobile first world.
In this day and age, the fight for front-end and wallet share is very real and thus makes it imperative for incumbents such as banks and financial institutions to be responsive to the changing customer needs and technology-driven innovation, in order to be able to survive.
Now that we have established the problem statement, let us focus on the solution (read: Internet of Things).
As a system of interrelated devices, machines, animals or people, collectively called “things,” equipped with unique identifiers and the ability to transfer data over a network, Internet of Things has the potential to bring every object, consumer, and activity into the digital realm. Internet of Things (IoT) has been around for quite some time now and has made its mark by disrupting business across industries such as manufacturing, logistics, and healthcare. With miniaturization and decreasing cost of sensors, expanding storage and deep penetration of wireless connectivity in the society, Internet of Things (IoT) is growing and is here to stay.
Now, the big question here is: How will IoT help financial institutions in staying ahead of the changing market dynamics?
Realizing the true power of customer experience as a driving force in today’s business world, banks and FIs need a shift from the traditional business model of product provisioning to need servicing. The best way to do that is to get close to their customers and making their presence felt. Banks need to reassure their customers that they understand and empathize with their needs, and are at their service every single moment. By channeling their efforts on monitoring and harnessing the true power of customer data, banks must re-invent themselves as the modern enabler of financial well-being for their customers. IoT can help them achieve this goal.
In the space of modern financial services, IoT ticks all the boxes by addressing major challenges of the FinServ ecosystem. It enables banks and FIs to get closer to their customers by monitoring their activities and understanding their need in real time. It also empowers them to assess the risk better, and customize their product offerings. When paired with AI and big data, it presents a plethora of data-driven opportunities with an objective of anticipating needs, solving problems, minimizing risk and increasing efficiency.
The report can be downloaded here.
Banks and FIs are looking to leverage IoT’s capabilities in differentiating their service offerings with a touch of personalization and providing superior customer experience. Some of the major areas of IoT’s impact on financial services are:
- Increased transparency and access to customer data, aiding in data-driven decision making and enhanced product/service design.
- Behavior-based customer profiling and risk assessment, aiding in accurate underwriting.
- Context-aware content push and proximity marketing.
- New sources of revenue generation and increasing cross-sale/up-sale opportunities.
At LTP, we have always been fascinated by the way technologies like Internet of Things are shaping up the modern financial services landscape. Being known for reporting the leading indicators in terms of industry trends and insights, we have had a knack of identifying the near future trends well in advance through our in-depth analysis and thought leadership in the financial technology space. As the second edition of our newest research segment FinTech Foresights, we bring to you an in-depth analysis of IoT, in the context of financial services.
In this report, we deep dive into the potential of IoT in solving the major problems faced by the financial institutions. With a vision for the future, we discuss in detail about opportunities and challenges of IoT in FinServ, security concerns, emerging business models, key success stories and some exciting use cases. Through this report, we give you a holistic view of the future of financial services, powered by IoT.
Note: This is a free introductory edition of the new FINTECH Foresights report from MEDICI. For subscription options, please contact us at sales@goMEDICI.com or +1.704.246.8090.