Given the breadth and scope of the Internet of Things (IoT), it’s no wonder that this emerging technology is disrupting various industries. One particular sector it’s affecting is banking, financial services, and insurance (BFSI). This is especially true with the pandemic spurring demand for all things digital and decentralized. As a result, GlobeNewswire reports that the global market for IoT in BFSI is expected to be worth USD 116.27 billion (EUR 110.43 billion) by 2026.
We’ve already covered how the IoT is transforming personal finance. We’ll now tackle the other side of the coin. Below are a few ways how the IoT is helping financial services support their customers.
Better-informed business decisions
In our aforementioned article on the IoT in personal finance, we discussed how the amount of data collected by the IoT helps individuals make better financial decisions. The same thing can be said for financial service providers. With IoT applications, these companies can collect real-time information not just on their customers, but also on their own operations. This makes for more sound business decisions. For example, businesses can analyze how customers use their services to determine points of improvement. The same methods can be applied when assessing internal day-to-day operations to make them more efficient.
With the IoT, businesses might even decide to further adopt it and streamline their workflows. For example, ATMs equipped with IoT sensors can help with predictive maintenance and prevent downtime. Banks can use the IoT to connect with wearable devices and enable contactless payment methods. Financial companies can even benefit from the IoT infrastructure used by eCommerce platforms like Shopify. AskMoney explains that Shopify is already popular due to its easy-to-use business tools. Today, it’s gone further by partnering with IoT company Apptricity to help businesses — like those that sell collectibles as investment assets — automate inventory management.
Personalized customer experiences
Financial companies need not stop at using the IoT to improve their services. BusinessWire reports that 72% of customers want more personalized financial services, and the IoT can help you get there. The same data it gathers on customers can be used to predict future trends in customer demand. If a bank notices that a group of customers has recently been researching mortgages, they can launch targeted marketing campaigns focused on related loan services such as a VA Loan Calculator. Investment companies may send similarly-targeted campaigns on crypto investments to millennials, as they’re the generation that owns the most crypto assets.
This capability of the IoT is made even more crucial with the MSSP Alert reporting that 6 in 10 institutions within the global financial sector are hit with increasingly-sophisticated cyberattacks. The IoT can discern deviations in a customer’s typical user behavior, alert them immediately, and allow them to disable contactless payments via any IoT-enabled device. Dedicated IoT sensors from companies like WebNMS can also be used to remotely disable ATMs when suspicious activity is spotted. On the whole, the IoT’s ability to act across networks remotely and in real time can be especially useful in blocking fraudulent activity.
As the financial industry is increasingly ushered into the Digital Age, the need to improve its services increases. The IoT is one important technology that will continue to keep them competitive in the years to come.