The Internet of Things is an emerging topic of technical, social, and economic significance. Today’s consumers demand always-on convenience and a personalized service whenever possible, as is clear in the case of banking and financial services, from the mass adoption of online banking, mobile banking apps and, most recently, contactless payment technologies. Additionally, they also want the highest levels of digital security from their banks, with any data breach or security threat posing a major problem to banks in the IoT era.Machine-to-machine connectivity that enables the mass collection and exchange of information from sensors and objects also opens up multiple opportunities for banks, who will be able to better track and analyze the behaviors, wants and demands of their customers. This, in turn, will allow banks to provide customers with a far more personalized experience, with targeted advice, context-aware offers, and insight. The bank is able to achieve a new level of understanding of the needs of both consumer and business clients, attaining a new level of customer intimacy.
Banks might use IoT technologies to create more engaging and context-aware customer rewards, or to generate more intelligent and personalized customer cross-sell opportunities, for example. And IoT will help banks to innovate and devise better ways to improve risk management, reduce costs and improve overall operational efficiency.Business clients and consumers will be able to access a much more holistic view of their finances wherever and whenever they like. And banks will offer far more tailored products and solutions to help customers make the best financial decisions at all times.The increased amount of real-time data available to banks, from information on residential and commercial properties through to personal data from social media, spending habits, and credit behavior, will all allow banks to make better commercial decisions, based on far more accurate financial risk data.
Banks are going to be far more technologically-empowered to assist business customers and help them to achieve better commercial results, due to the banks’ ability to obtain and access data from across the business customers’ value chain, from suppliers through to distributors and retailers.Biometric and positional sensors, for example, are highly likely to help banks to track both the physical performance of individuals and to track the shipping of goods and manufacturing quality control better than ever before, which in turn will help to improve underwriting processes and reach new markets.It will be those banks that best use these new types of IoT-generated data streams to make vital decisions on business lending that stay ahead of the curve. One example here might be the potential benefits to banks from new types of sensor that monitor the activity and condition of retail industrial and agricultural businesses, such as connected field devices in manufacturing or agricultural sensors that monitor livestock.On which note, farming, in particular, could well be a major beneficiary of real-time data feeds which will allow farmers and their banks to continuously assess and value the farm’s crops and livestock, accurately gauging yields, property, and overall business value.
Over the next five to ten years, the banking industry is going to see major changes from IoT technologies, which will also present banks with new security challenges to manage. The need to ensure that the whole connected banking experience is safe and secure will be increasingly vital in order to gain customer trust and ease clients’ concerns around personal and business banking data being hacked.
Sensitive data, from a customer’s financial history to their location history, is always potentially a target while it is stored on or moving around the network. No matter where the data is held, whether it be on a device or moving along the network from the bank to the customer’s connected car, for example, it needs to be properly protected.Which is exactly where tools such as encryption to protect the data itself and authentication tools to authorize access to this data by only those allowed to, are vital. We’re already starting to see the development of biometric data – fingerprints, voice-recognition software and iris scans – come into play to prove the customer is who they say they are.
Banks will have a far more detailed and useful picture of the customer, with the abundance of IoT devices, which at the same time means that banks will need to add an extra layer of security across the entire IoT ecosystem – from the devices being used through to the network and cloud level.Tags: Fintech, IOT