IoT or Internet of Things is no longer science fiction, it is the reality now. IoT is changing the way we do things & it’s making business faster, cheaper & more efficient every day. IoT refers to the monitoring & controlling of processes through the internet rather than involving manual efforts for doing such tasks.
IoT is all about communicating with things instead of communicating with people such as sensors, smartphones, thermostats, smart cars etc. In simple terms, IoT enables objects to understand a situation without being dependent on human help. According to a Gartner report, connected devices across all technologies will reach 20.6 billion by 2020 which is no doubt a very big number! Gartner, Inc. forecasts that worldwide spending on IoT security will reach $1.5 billion in 2018 which is surprisingly a 28 percent increase from the 2017 spending of $1.2 billion. In fact, forty-eight percent of organizations that are implementing IoT confirmed that they are planning to use digital twins in 2018.
Coming to the use of IoT, the banking sector has already adopted M2M communication to monitor and manage systems remotely where system means CCTV, digital signage and ATMs/ CashPoints. IoT has become an important part of the evolution of banking technology. Right from enhancing customer experience, streamlining operation to set up digital banking machines to reduce queue time, bring flexibility in service and increase the productivity of employees – IoT has become a part of the ‘future bank’. Still not sure? Let’s discuss the benefits and ways how IoT has changed and is still bringing changes in the banking industry.
1. Account management: Using Biometrics and voice, a customer can access his or her account or data from anywhere in the world and that to too securely because biometrics and voice are unique for each and every customer. Have you heard about the digital signature? Don’t get confused with digital certificate! A digital signature is a handwritten signature or stamped seal but the process gets completed in a digital environment based on public key cryptography. In case a physical signature is needed, then the digital signature can be cloned on paper with ’Wet Ink’. So if you need a signature and authenticity, then you can get the signature from the customer who can be anywhere in the world at that time. This is indeed an advantage!
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2. Smart Collaterals: Transfer of ownership of an asset can be done within minutes if digital identity is enabled. In fact, IoT can help banks & financial companies to have a better control over mortgaged assets of the customer, process loan immediately and monitor the collateral status in real-time.
3. Secured payments: With the help of biometrics, customers can make payments securely and virtually. Though there are some security concerns related to IoT, if the process is followed correctly then digital identities will definitely increase the security in the transaction process.
4. Customer Onboarding & KYC: KYC means – Know Your Customer. KYC is a process to validate and verify the primary documents of a customer before opening an account in any financial organization. With KYC, the banks will get insights about their customers’ behavior to do accurate profiling. So, how will IoT help in KYC process? We all know that the traditional KYC process is rigorous and time-consuming. Adopting IoT will help the banks to link with the customers’ digital persona through smart devices such as smartphones, tablets, fitness bands, smart eyewear and get insight into customer’s financial behavior through advanced analytics. So in short, with IoT, banks can store customer information secured with the help of cryptography, reduce money laundering and complete the KYC process using the customer’s digital signature without any delay.
5. Sensors & Beacons: Apart from these benefits mentioned above, banks can decide which branches they should close or improve or where they should invest to gain profit and set their sales target accordingly because sensors will help the banks to track the traffic and let them know about the footprints at their branches. Have you heard about the ‘Bluetooth Low Energy beacons’? Once a customer enters in an ATM and spends some time, these beacons will detect a customer’s presence and provide personalized service to them which is no doubt a good thing!
IoT has the capability to transform the banking industry but the financial organizations should come forward with confidence and adopt IoT to take the benefits of this growing technology and expand their business globally. IoT is trending but before deploying IoT, banks must invest a good amount into the security system to protect and secure customer’s collected sensitive data.
IoT generated data will add values in the banking sector. IoT will help the banks to stay ahead of the curve but the banks now have to decide if they want to lag behind by refusing to integrate IoT or add an extra layer of security across the entire IoT system, maintain customer trust and increase customer satisfaction to a new level!