IoT technology in the Banking Industry: Benefits for Clients and Businesses
Modern solutions have penetrated into numerous industries including the financial field. Every day we interact with various gadgets and do not even realize how they improve our life and the state of the economy. In this article, we are going to consider the IoT in banking: the benefits of different systems and reasons to start their implementation.
What is IoT Technology?
The IoT technology in any enterprise is a set of devices connected to the Internet. The holistic system is managed by special software with or without Artificial Intelligence (AI). True smart solutions, which we deploy, are able not only to collect but also to analyze data by representing it in a meaningful way.
Without a doubt, the Internet of Things is a leading technology in the near future. Specialists have estimated that the IoT market had exceeded $500 million in 2021. And the growth is going to continue: by 2027, the market will cross the $2 trillion mark.
Benefits of the IoT in the Banking Industry
The Internet of Things is usually associated with smart homes but actually, the technology has a significant spread in the production and service spheres. Let’s find out what the IoT might offer you as an entrepreneur and your clients.
Personalized service. The IoT systems are about gathering and analyzing data related to the needs and habits of your audience. As a result, you are able to provide services that would meet all users’ requirements. According to some research, one in three millennials can easily change the bank if the convenience of use and banking offers don’t match the initial expectations.
Boosting business processes. The mainstream among the mobile banking trends is the refusal of human labor because it’s too expensive and irrational. Automated systems can easily replace a part of employees by processing requests and operations. A good example is a time for opening a new account, which is reduced to five minutes in some modern banks and is performed in a mobile app.
Simplified switching to the online business model. There are financial establishments, which don’t even have branches: they are operating completely online saving a decent amount of income. IoT solutions allow you to adapt faster and easier to the ever-changing world.
Moreover, implementing IoT solutions lays the foundation for a structural transformation of your business in the future by simplifying it.
Expanding the range of services. If you know the hobbies and preferences of customers, you can offer more services. You are able to link the financial industry to channels where users leave their money. The bottom line is to provide bonuses and financial rewards to an audience segment, which takes advantage of the offers of your partners. The list may include gyms, restaurants, train stations, and so on.
Simplifying the decision-making process. The main benefit of IoT in banking is receiving answers to numerous questions about your clients. Thanks to the IoT, banks get a huge amount of information that helps them make the right decisions regarding the launch of new products and development in general.
Eliminating fraud. It’s a merit of technologies that enhance the security level.
Each of the mentioned things leads to one crucial goal of any company: increasing revenue by improving customer loyalty.
How to Apply the Internet of Things to Banking?
It’s impossible to cite all existing scenarios of using IoT technologies within the article. So, we are going to list the brightest ones.
A high-security level is the basis of the financial industry. So, in order to have a clue about who is making a transaction or trying to access a certain resource, companies must perform authentication.
Technologies aimed at your clients:
Logging to ATMs using a smartphone. Let users scan a QR code on the ATM screens to enter their personal accounts. It will allow your clients to have an expanded range of services and secure their operations;
Approval of payments. If the system sees a new recipient and the amount of money is decent, it may ask for the transaction approval through a phone call or an SMS code. The first method involves a robot that requests the user to tap, for example, the number 1 on the keyboard.
IoT in banking aimed at your employees:
Video surveillance. It’s not necessary to keep records 24/7: smart systems allow starting the process after detecting movements. Moreover, there are solutions, which are able to recognize people (of course, if they are close enough to the camera and are looking straight into the lens);
Pass system. To know who comes in and out, you should take care of passcards. All the employee needs to do is scan it. After that, the data about the person will be recorded and the door will open.
Thus, The Internet of Things provides strong data protection with multiple authentication options.
Modern technologies make visiting bank branches more organized: people can sign up for an electronic queue in a special self-service terminal. The computer will display a message when it’s your turn.
In order to save time and money, modern banks have refused the use of paper bills and documents: the operations are performed electronically; clients sign documents on a tablet and then receive a receipt by email or in a bank application. So, the benefits of IoT in banking are obvious: such an approach to the assistance process is fast and eco-friendly.
Offering a unique user experience
Wallets look different nowadays: it’s usually smartphones with NFC chips. However, there are other options: smart bracelets, smartwatches, or even rings! Everything of these is a big part of the Internet of Things, which generates a new user experience.
The last thing we would like to mention is control over cars/planes, which are in rent. IoT solutions allow tracking their locations and parameters inside them such as temperature, humidity, and so on. It’s important to keep the transport in proper condition.
Main Risks You Should Be Aware Of
We have listed numerous reasons why you should implement IoT systems. However, we are going to be honest with you: there are certain risks if you entrust the development to an unprofessional team.
Using uncertified hardware. Such devices have an insufficient level of cyber security and do not often receive updates. As a result, storing data on them becomes insecure.
Lack of visibility and device management. Unmonitored and untracked devices cause suffering. IoT in banking is about convenience and complete control, not about trying to make solutions work.
Stealing data. Such endeavors should be prevented at the hardware and software levels. Modern gadgets have special chips, which make it impossible to compromise information.
Ill-considered decisions at the very beginning of implementation. It’s a big problem taking into account the conservatism of the banking industry. You cannot sometimes follow the mobile banking trends because your financial establishment requires preparation. And it may cost an arm and a leg.
Agilie is here to help you implement all your ambitions despite the existing challenges. We know what a quality product should look like and how to ensure an unprecedented level of security.
Our team has the necessary expertise and resources, so feel free to get hold of our manager to start working on your project.