Benefits of IoT Technology in the Banking and Finance

The long accepted banking and finance practices involved many manual processes that led to delays, errors and there was a general lack of real time analytics. The integration of internet of things (IoT) in this industry has been able to help them increase efficiency, and provide many innovative solutions that aim to increase customer experience. IoT can collect and analyze large volumes of data that can be used by this industry in real time. The use of IoT has opened up new ways to deliver personalized services and generate analytics and has transformed the conventional working of this industry into a dynamic contemporary one.

This article will explore how IoT can benefit the banking and financial industry.

Benefits Of Using Iot In The Banking And Finance Sector:

• Boosting customer experience: The internet of things can be used to offer better personalized services by banks and finance companies to customers by analyzing data that can include their preference and spending habits. By sending real time transactional notifications, account balances etc., helps keep customers informed and makes them feel more secure. Applications of IoT in banking services that offer customers the convenience of cardless transactions and location based offers makes banking more practical and beneficial. IoT can automate many banking processes which can lead to improved delivery of services and reduced wait times for customers. In these modern times, the use of IoT is helping banks and finance institutions transform themselves into more customer centric institutions that help enhance customer experience.
• Upgraded security: The use of IoT helps in upgrading security in the banking and finance industry by enabling use of more advanced authentication processes such as biometrics for secure transactions. Real time transactional notifications alerts customers towards any fraudulent activity in their account, enabling them to notify the institutions about it. The use of IoT in security cameras and other methods that can physically monitor the locations, can increase the security in these institutions. The data collected by these IoT devices can be used to analyze and identify unusual activity that can point to fraud and its prevention. The use of IoT in today’s financial institutions is critical in strengthening the physical security foundation.
• Fraud detection: The internet of things can be used for a range of advanced fraud detection methods such as biometrics, which can help in securing financial transactions. Since IoT devices collect data, it enables the financial institutions to analyze this data to find any unusual patterns of activity that can indicate fraud. Similarly, sending notifications to customers in real time can help alert them in case of any suspicious activity and take timely action to prevent fraud.
• Asset management: The data collected by IoT devices helps banks and financial institutions make informed decisions about risk management and asset allocation. IoT devices can be used for maintenance of physical assets by using predictive analysis of data collected, and reduce the operational costs. These devices can be used to effectively track the assets which helps ensure that they are used optimally and secure. The data collected can provide useful information on asset use patterns, which lets banks find better ways to improve asset management that can lead to better profitability and increased customer satisfaction.
• Opening new avenues for revenue generation: Data collected from IoT devices can be used by the banking and finance sector to fund new ways for revenue generation. Analytics performed on this data can offer information that can help the financial institutions develop and offer personalized financial products. They can also offer better services that would lead to better engagement with their customers and increased revenue generation. IoT data can give insights that can help these institutions to design insurance schemes and asset leasing options that can generate new revenue streams. IoT data can also be used by financial institutions to generate revenue by partnering with third parties. These third parties like for example retailers can use the data for target based advertising. IoT data can be used to generate growth and revenue from new business initiatives.
• Cost savings: IoT can help banks and financial institutions reduce their operational expenses by automation of many processes. The use of IoT data can help in preventive maintenance of assets which helps in reducing the downtime and increases cost savings. IoT can also be used for energy management which can lead to substantial reduction in expenses and increase in cost savings. IoT can also be used to reduce fraud using automated detection that leads to cost savings.

Final Words

The banking and finance industry has benefited immensely from integrating IoT in its services. The use of IoT in the banking industry has given these financial institutions the ability to offer better customer services, has helped them manage assets, improved security and increased cost savings. As the technology advances, these financial institutions will be able to find further uses for IoT that will help them increase growth and revenue while delivering much better personalized services.