It’s a new age for the financial service industry.
Per Wikipedia, the Internet of Things (IoT) describes “the network of physical objects-things-that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet.” Whether knowingly or unknowingly, you’ve certainly seen IoT in action at work or in your home.
The banking and financial services industry was one of the earliest industries to recognize its benefits. Now, “the global IoT in the BFSI market is expected to grow from USD 249.4 million in 2018 to USD 2,030 million by 2023.” Let’s talk about the impact IoT has had on banking and financial services up to this point.
Real-Time Data Gathering
IoT tools have the power to gather real-time data. Using this technology, financial firms can assess customer needs at any moment or location. For instance, banks can quickly update their customers with relevant information, such as how long current wait times are at a local branch.
Enhanced Fraud Detection
Cybercrimes have been front stage over the past few years, and especially in 2020. According to Google, Gmail engineers block 18 million COVID-19-related phishing emails per day! With this knowledge, financial institutions are investing heavily in IoT. IoT systems can gather and analyze consumer data, detecting and blocking accounts that demonstrate suspicious activity.
With the help of smart gadget manufacturers, IoT has also made payment transactions more secure by using tokens (for example, Visa’s token service), biometrics-based authentication programs, and magnetic secure transmission technology paired with mPOS terminals.
Improvement of Investment and Trading Activities
Imagine a world in which investment decisions are made using constant market updates, company behavior tracking, and accurate business predictions. In 2020, IoT makes this closer to a reality than a pipe dream. Soon, most aspects of investment making will be automated and user-friendly. Some fintech leaders believe that IoT trading will be performed at a global level using bitcoin, mobile apps, and smart sensors.
Improve Customer Services
According to business author Michael LeBoeuf, “a satisfied customer is the best business strategy of all.” By using IoT applications in financial services, gathering and analyzing data business needs can be done much more effectively. And it’s not all about money – IoT also helps companies personalize the customer experience, by producing reports for clients with suggestions about money management and product offerings in real time. Finally, IoT increases payment security using biometrics.
Conclusion: 4 Ways IoT will Impact Financial Services and Banking
Though IoT in the financial services industry may still be relatively new, experts are betting on it as a winner. Financial services are among the top ten industries currently investing in IoT. Over the next few years, we’ll see just how widely this advanced technology can transform the field!
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