Technology has been a backbone for the Financial Services sector. Capitalism may not have been where it’s today if it weren’t for the technological developments that have taken place over the years. Major developments in the IT sector enable a need for change in the Financial Services sector as well.
One such development that has been taking the world by storm is the IoT or the Internet of Things. The use, the function and the users of Internet, everything changed in a very short span of time.
Introduction
The IoT function focuses on a simple fundamental of connecting all your devices to the internet in order for them to easily communicate with each other and transfer data over the network without the use of human-to-human or human-to-computer interaction. If I would have used the word internet 10 years ago, the first thing that would come to mind would be a computer, a smartphone or a laptop at max. But someone asked a question; Why only this? Why can’t we connect other things with internet? Well we did; almost everything. This is what we call Iot or the Internet of Things. Connecting everything in the world together with one medium, that is the internet.
The next question that comes to mind is how this affects our financial sector. I mean we already use internet for trading, investing and everything. What changes now, isn’t it?
Well according to MarketsandMarkets a Pune based Market Research Company, the market size of IoT in the financial and banking industries is expected to reach over 2 billion USD by 2023. The banking industry which is primarily known to be slow and conservative is expected to gain a lot with this technology. Some of the major benefits for the financial and banking sector include:
Personalized Customer Service
Serving your customers better is something that every organization strives to achieve. Companies constantly try and improve themselves to serve their customers in a more efficient manner. IoT can help such organizations to gather real time data about their clients and analyze their needs and requirements. This helps them in understanding and fulfilling customer demands and expectations.
Organizations have also started using different web platforms that help them in connecting with their customers directly with the help of apps and social media platforms. Analyzing users spending patterns, budgets, browsing history also help them find new clients.
Faster and Accurate Information Processing
The quickly you get to know about an opportunity, the lucky you are. IoT helps fund managers to capture the right opportunity in time by providing real time data analysis and using data processing algorithms to process the same. Business Managers get real time data about their clients and the market which help them to take the right decision at the right time.
IoT also help investors in cases of risks relating to financial stability about the company at any given point of time.
Payment Security
New and improved payment methods have been entering the market for the last couple of years. This has provided easy access to everyone with a lower cost benefit. Along with lower costs, online payment warrants a secure payment gateway as every transaction can be traced back to its source.
Transparency
This has always been a struggle for the banks and financial institutions. IoT can help banks to accurately estimate the value of commodities a debtor possesses. IoT-induced transparency offer banks some insurance as it reduces the risk of dealing with unreliable customers in the future.
Customer Analysis
IoT enabled technology help companies in keeping a track of customer activities online. Companies use this by connecting their banking tools to smart wearables driven by IoT to keep an eye on the user’s activities and analyze their needs and demands.
IoT allows organisations to develop a user pattern by using specially designed algorithms that help them to accurately determine the point of requirements by consumers and provide the right service at the right time.
Automate Business Processes
Automating a business processes to an extent that involves minimum or no human intervention helps organizations in providing error free service. IoT application helps organizations in automating important business processes and can also be used to reengineer business processes smoothly. For example, if a person makes a delay in credit payment, then the bank can disable the credit card remotely. Also, an expiry of a leased asset contract can be blocked using IoT enabled sensor facilities automatically by the system as soon as the contract expires.
IoT has provided the world with an opportunity to connect together using a simple and yet efficient manner. The following graph shows an estimate of increase in the number of devices connected over the technology.
It’s almost impossible to cover every single aspect of IoT in a single article. But the words of a famous IoT Researcher sums up the discussion.
As per Edewede Oriwoh, “The Internet of Things is not a concept; it is a network, the true technology-enabled Network of all networks.”
Interesting article. I really enjoyed it.