BankTech

IoT in Banking: Exploring Exciting Opportunities

OxagileTechnology Writer

The Internet of Things (IoT) is grabbing headlines of all technology news portals. Relevant articles feature the ways these technologies influence a wide range of industries, intertwining with businesses of all stripes and colors, healthcare, insurance, commerce, real estate, education, etc.

The IoT presence in banking is not so evident: this sphere just starts realizing how the IoT can boost a business and bring it to a new level. However, considering the benefits they can attain, banks are exploring available opportunities, investing more and more in IoT technologies.

Thus, according to the study, banking and financial institutions plan to spend $153.5 million by 2018, allocating significant parts of their budgets (32% in 2015; 29% by 2020) on monitoring financial products/services (production, distribution, sales), customer status (via mobile apps, wearables, sensors embedded in products) and experience. This percentage is projected to increase by 2020, reaching 34%.

Furthermore, bank owners are engaged in hiring experienced business analysts able to better understand which data is needed and how it can be gathered thanks to the IoT.

So, how can banks take the advantage of fresh technologies and implement them to deliver better services and get valuable feedback?

1) Mobile devices:

Banks can feel free to entice experts in custom business applications development who will deliver a vast number of comprehensive solutions. Mobile apps installed on smartphones and tablets are used to improve customer experience and allow making so-called “invisible” or “connected” secure payments without wasting much time. Moreover, these devices are beneficial for monitoring customer activities and behavior.

Having access to the data generated by connected devices, banks can provide clients with a clear view over personal finances, foreseeing customers’ needs and helping to reach rational financial decisions.

Beyond that, various gadgets are utilized to track retail locations (in case the bank has a great number of branches).

2) Wearables:

This solution that comprises smart watches and bands is also a great IoT example: clients can actively employ wearables to easily conduct basic operations.

Banking experts argue that wearables may even replace mobiles and become more common for carrying out banking transactions.

Many wearables are connected to smartphones, but key players are trying to extend boundaries and incorporate rings, key fobs, VR devices, and clothing.

3) Sensors:

IoT sensors represent an effective method of getting relevant and detailed information on product performance and usage. Additionally, manufacturing control and shipping sensors let banking institutions upgrade underwriting processes and capture new markets.

With sensors, it’s also possible to monitor the state, conditions and activities of retail industrial and agricultural businesses.

Among other IoT uses are video tellers and kiosks equipped with sensing technologies that recognize customers when they come in and perform actions.

4) Smart home and connected cars:

Thanks to the IoT, banks can grant customers the chance to conduct transactions via appliances or smart home controllers (e.g. voice-first devices like Amazon Echo; Amazon Dash, etc.).

Another exciting possibility is to entice cars and make it available to pay through them: except for parking, fuel, and tolls, such connected cars payments may embrace drive-through and other apps.

General benefits

By employing IoT solutions banks get a chance to improve customer experience, generate cross-sell possibilities, create rewards for clients, engaging them to the full. Moreover, with these advanced technologies banking institutions will be able to find new efficient ways for developing better risk management and reducing costs.

In general, the IoT assists in taking wise commercial decisions, as banks obtain real time data (captured by connected devices) on residential and commercial premises, spending, credit behavior, and more.

Security issues

With the introduction of latest IoT solutions, banks are certainly to face security challenges and risks. They should be occupied with providing safe, connected banking experience and win consumers’ trust by securing their privacy and personal data that are becoming more vulnerable to sophisticated hacker attacks.

All the data that goes through the network must be protected with the help of smart solutions, including encryption, authentication tools, and even biometric data verification (fingerprints, voice and iris recognition, etc.).

In short, an extra layer of security for the IoT ecosystem is a must for banking institutions if they desire to build up and preserve their customers’ trust.

Conclusion:

While introducing attractive options to customers, banks have to consider not only the exciting opportunities the IoT offers but also possible security challenges. That’s why before these modern technologies are firmly incorporated into the banking sphere; it’s crucial to consider a broad array of issues and certain components, developing a robust strategy on adopting IoT novelties.

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Yana Yelina

OxagileTechnology Writer

Yana Yelina is a Technology Writer at Oxagile, a provider of custom web and mobile application development services with a focus on multi-platform video streaming and RTC solutions.

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