In financial services, the Internet of Things (IoT) is considered the next big thing. IoT is a network of devices connected through the internet which obtain and transmit data. Internet of Things is the independent communication occurring between objects that allow the optimization of operations, reduction of costs, boosting productivity, and improvement of lives. The connecting dots in the sphere of IoT and the subsequent devices transform the experience of customers in the banking environment. Over the past few decades, there has been an evolution of the internet from a set of documents or interlinked hypertext to a network of objects, people, applications as well as devices.
In just a few years, there was an enormous increase in devices from just millions to billions while also increasing the time that people spend on the devices. In 2016, it was estimated that 75 percent of the population in the world had access to the internet often connecting in excess of 6 million devices. With 4.5 billion people accessing the internet in 2019 and the number of gadgets connected via the internet increasing, then the Internet of Things becomes something of interest.
IoT developer teams are helping banking institutions to develop apps that help transform the experience of the customers utilizing IoT data.
So, how do the banking services benefit from the Internet of Things and what are some of the solutions it offers?
IoT Facilitating Banking
There are billions of devices that are linked to each other something that provides an intelligent system of other systems. These systems and intelligent devices share data through the cloud which is analyzed to help transform businesses, lives of people, and the world in various ways. Banks can have a complete view of the finances of the customers in real-time because the customers used smart devices in accessing data. The data is easily shared among millions of devices from the end side of the customer to the end side of the bank. Through the data that the banks collect, they can anticipate the customer needs and provide solutions as well as advice that help the customers make sound and smart decisions regarding their finances. Therefore, the ‘Bank of Things’ becomes a powerful instrument for facilitating the increment of customer loyalty for the banks which in turn brings more business to the banks. Additionally, banks are engaging and communicating with the customer often providing advice through cell phones. You may see a similar approach in regard to the customer’s spending habits. Banks can connect with their customer in various ways – for instance, by offering advice and also rewarding the customers in other spheres of life, not necessarily in finances. When this happens, banks can build customer loyalty.
What are the Benefits of IoT in Banking?
When it comes to banking, IoT offers many benefits. It provides rewarding, easy-to-access services not only to debt but also credit card customers. The banks are able to analyze how customers use ATM kiosks in various areas and reduce or increase the installation of ATMs in those areas depending on the volumes of usage. Besides, banks can also utilize IoT to bring in on-demand services nearer the customers by installing kiosks and increasing the accessibility of banking services to the customers. IoT offers customer data that helps banks identify the business needs of their customers, their value chain for example retailers, suppliers, and distributors. The data also helps banks to gain customer insights. The information about customers that is available through IoT helps banks to provide value-added services, customized banking services and products, and financial assistance to ensure there is a win-win situation for the parties involved – the customer and the bank.
In the agricultural sector, farmers who are customers of the banks are able to gain from the Internet of Things solutions. For example, banks are able to analyze farming output in addition to other conditions of crop farming allowing the banks to estimate the output value of the crops. Based on the crop yield that is estimated through IoT, the banks are able to provide flexibility when it comes to financial terms based on the expected yield as well as the frequency and crop output. Such information can help in building a stronger relationship between the farmer and the banker.
Besides, banks can also predict fraud in credit card and debit transitions that allowing them to take appropriate measures to prevent the problem. When a customer swipes their card, they provide verification of the account holder through device location and depending on the information garnered, the bank is able to confidently decline or approve the transaction. Also, sensor devices may be installed within the warehouses of borrowers to track raw materials as well as inventory. The tracked data can help the bank to reduce the account balance or ensure that a loan that had been borrowed is repaid when sales of the inventory occur. This way, banks can minimize overhead tracking costs and prevent borrowers from indulging in shoddy practices.
Banks that need IoT apps can hire IoT developers to help in not only building but also maintenance of the apps. The apps can be customized to meet the needs of the banks and solve a particular problem.
Other benefits of IoT in Banking include:
Improved customer’s Financial Habits
Utilization of connected devices can allow bank customers to change their financial habits and tackle the problem of overspending. One of the first IoT banks, Interact IoT started utilizing shock wearables as a component of an education program for the users. Once a user sets a credit card limit, the wearable would track the spending of the customer throughout the day. When the limit approaches, an alert would be raised. If the user ignores the alert and they continue spending, then a shockwave would be sent by the wearable to their wrists which served as a strong reminder that all is not very well regarding their spending and the daily limit.
Improved Banking Experience
IoT impacts banking customer services in various ways. It provides clients with insights and individualized experience in a timely manner. The connectivity of devices allows a visitor to schedule an appointment and be able to check it within their smartphone. What this means is that the customers are aware when it’s their turn to stand at the counter rather than having to wait in a line. I presume you have been in a bank where you are issued with a token which has a number that allows the system in the bank to know which counter you should go and when to go. You just have to sit and wait for you to be called to walk to the counter. This helps ensure that the bank customers have an improved experience.
Not only that, but the bank also stores the visits by the client in their database, the services they use whenever they visit the bank and the questions they ask. For example, Citibank enabled a Bluetooth-driven system with IoT beacons allowing users to access ATMs 24/7.
If your bank needs a software that is based on IoT, it can consider hiring an Internet of Things developer team to take care of the app development process.
Expanded range of Service beyond Banking
Banks can utilize IoT technology to expand the range of services they offer to their customers beyond the traditional ones. For instance, U.S. Bank started using IoT initiatives to help motivate its customers to stay fit. When the clients’ complete achievements, they are granted bonuses and financial rewards. This helps foster a strong relationship between the bank and the customers. It makes customers feel that their bank cares about their health.
Efficient Branch Banking
The modern-day branch system in banks is jeopardized by mobile banking. While banks want to maintain the traditional approach of banking and ensure that it adds value, there is a need for financial institutions to utilize technology to meet the demands.
Banks use the Internet of Things and other banking applications to resolve the conflict that is seen in traditional branch banking due to mobile banking. For instance, biometric sensors can be used to garner user data when they enter the bank and relay that information to the main system. Using smart branches, it allows the managers of banks to reduce the number of staff as well as the maintenance costs while also reducing the client waiting time. The managers create a linked communication system between various branches in different locations. The BMO Harris Bank tested such smart branch where no real employees are present. In this case, a user is often guided by a technology-based system or chatbots. Where there are unpredictable questions, the chatbots are able to contact a real human consultant through video conference tools.
Enhance Credit Card Experience
IoT has also enabled the development of an interactive credit card. Rather than having a piece of plastic card, a bank client interacts and engages with a digital display allowing them to pose questions to the bank in real-time and tweak the limit settings of their credit card right at a shopping site among other things.
The increased usage of devices by bank customers had resulted in an increase in the usage of IoT data. Banks are now using IoT data to be able to transform the experiences of their customers and offer customized services and products. Today, banks have to convert the data that is derived from IoT into valuable information that helps them make informed decisions. Through the information obtained, the banks can increase their market share while also providing better services to the customers. To get the affordable Internet of Things app development, companies can consider hiring an IoT developer in India.