How is IoT Transforming the Banking Industry
Like any other industry, the banking industry is reaping the benefits of innovative and transformative technologies like the Internet of Things (IoT). IoT technology can potentially change how financial services work and are delivered to the end user, i.e., the customer. Its applications range from offering personalized banking and managing risk to streamlining banking operations.
This article aims to explore applications and benefits of IoT in the banking industry that can help make this industry more customer-oriented, secure, and efficient.
Applications of The Internet Of Things in Banking:
IoT-enabled ATMs: Automated teller machines or ATMs are, in a way, early blueprints of IoT-enabled banking. ATMs are connected devices that help make banking more efficient, enabling real-time transactions without the need for human intervention. With increasing technological innovations, ATMs now include sensors and cameras enabling real-time data exchange that enhances customer experience and security. For example, facial recognition using IoT-enabled cameras in ATMs can ensure secure access for customers by reducing the risk of card theft or fraud. These camera sensors can also allow live-streaming video support for customers to engage with bank advisors. These IoT-enabled ATMs can also suggest promotional offers and provide more personalized services that are based on customer preferences and behavior. IoT sensors installed within ATMs can also suggest predictive maintenance by detecting potential issues to avoid machine downtime. IoT sensors can also track foot traffic around the banks, and this data can help banks choose ATM sites or even branches at such places. Ultimately, IoT-enabled ATMs help make banking transactions more personalized, secure, and efficient.
IoT-enabled smart wearables and devices: Smart wearables and devices include smartwatches, smart glasses, fitness trackers, and mobile devices. These devices fitted with sensors can connect using the internet or even Bluetooth, allowing for real-time data exchange. Banks can leverage these devices and provide many services, including mobile banking, contactless payments, and sending notifications to any such device that is used by the customer. For example, a customer can enable contactless payment using a smartwatch or even check the balance at the ATM by using biometric authentication and punching the security code. These devices help enhance security measures and make banking more accessible and convenient.
Asset tracking: IoT devices and sensors are equipped to gather real-time data, enabling banks to always monitor the location and status of any asset. This helps banks mitigate risk and increase risk management by providing up-to-date information on customer assets. IoT can also ensure compliance requirements are met by tracking and reporting on the conditions of the assets held as part of compliance. IoT also enables predictive maintenance in assets such as ATMs by monitoring their condition and reducing their downtime.
Benefits of IoT in Banking:
Increased security measures: IoT applications in the banking industry offer enhanced security measures by facilitating advanced security protocols that include biometric authentication and fraud detection in real-time. IoT-enabled ATMs can make use of facial recognition or fingerprint scanners to give secure access to customers and reduce the risk of card theft or fraud significantly. IoT sensors and devices installed in CCTV cameras can be used to monitor and secure banking infrastructure remotely. Smart alarm systems and other IoT-based surveillance technologies can be installed in branches, ATMs, and other data centers.
Business intelligence and data analytics: IoT devices and sensors constantly collect information in real-time from various sources that are connected to the banking system such as ATMs, mobile banking apps, and other banking applications and services. This data can be used for advanced analytics which provides information about customer behavior, market trends, and operational efficiency. For example, banks can use the intelligence generated to personalize their services, make data-driven decisions, and predict future trends. IoT devices can also help in risk management by identifying unusual patterns that indicate fraud or fraudulent activities.
Seamless payments: IoT-enabled smart devices such as smartphones, smartwatches, smart rings, and even physical cards that are NFC enabled. These smart devices allow customers to make secure contactless payments by just being at a specified distance from the payment terminal or even just a touch. This has become possible because of technologies like Near Field Communication (NFC) and mobile wallets. For example, customers can tap their smart device to an NFC-enabled terminal and complete the transaction. At the same time, the IoT devices provide real-time notifications about the transactions and enhance transparency for the customer and the bank.
Final Words
The applications of IoT in banking and finance industry are not only transformative but are having a far-reaching impact. From IoT-enabled ATMs and smart wearable devices that increase security to asset tracking, IoT is changing the way banking services are delivered to customers. It enables real-time data analytics and provides extraordinary levels of business intelligence. As the banking industry continues using IoT, the technology will continue to play a big and pivotal role in shaping its future and making banking more efficient, customer-oriented, and secure.
