Finternet of Things: How IoT can revolutionize the financial sector

Internet of Things (IoT) systems are becoming more popular all over the world. Smart houses, offices and shops have become commonplace.

Yet, there are spheres which are only opening IoT benefits. The financial industry is one of them. In this article, we shed some light on the advantages of the IoT for banking systems, give you some real-life examples and warn about the barriers which are still there.

To begin with, let’s consider why IoT is not only a modern hype nowadays but also a necessity if you want to stay afloat in your business segment. Let’s find out what benefits it gives to us:

Real-time mode data collection: The IoT devices collect data all the time, the single data centre processes it and provides a user with the up-to-date information. In such a mode, for instance, a customer can provide all the necessary information about a car to an insurance company within a few seconds.

Improved customer service: The more you know about your customer the better services you can offer him. IoT devices are the perfect solution to collect information about your users.

Simplified decision-making processes: The data you gather about your customers makes it easier to understand what problems they have and what new services you can offer your clients. It’s a great approach to fulfil clients’ needs without bothering them.

Along with all that, take a look at real-life examples of how you can apply IoT systems to boost your banking business:

Fraud detection: Over the last few years, cybercrime has become a key issue across the world. We all remember how the companies we trusted compromised themselves with data leaks. The banking sphere doesn’t have a right to such a mistake. If you lose the trust of your customers, you are out of the business. The IoT system helps to protect your enterprise, improve data security and advance the fraud detection system.

Invisible payments: Mobile payments are going to become dominant soon and IoT devices will help to make it so. Voice recognition devices, various sensors and scanners will provide the required security level to make hands-free payments possible.

Automatic payments: We are used to having smart coffee machines which make us our morning latte. How about a coffee machine which can also order coffee and pay for it when it’s running out of the beans?  Smart refrigerators which can order food, an electrical energy meter which pays automatically for the consumed electricity and many more devices which will make our lives more automated and more convenient.

These facts are very convincing, yet, there are some minor technical issues which you need to pay attention to in order to create a really reliable and advanced IoT platform for your fintech business.

Security: The financial sphere is one of the most vulnerable ones to cyberattacks. That is why people still feel suspicious about devices which record their private data. Making your system secure has to be your priority.

Complexity: Once you’ve made a decision to apply one of the main fintech trends to your business, you need to understand the cost of IoT devices themselves is not the final price. These devices collect a huge amount of information which you need to store, process and analyze. It all requires large hardware capabilities. Whether you are going to buy the whole equipment by yourself or rent some cloud instances, the system is going to be complex and expensive.

No standardization:  As far as there are no common standards for IoT device manufacturers, we face a problem of connectivity and maintenance. Every device can use different protocols, programming languages and sockets. So far, there are no options to solve this issue.

Despite the fact that there are still lots of barriers and pitfalls which make it harder to start using IoT in your banking business, you shouldn’t forget about numerous benefits of IoT systems which can help to make your business prosper. And even if you aren’t ready to apply the IoT platform right now, you can, at least, prepare your company for it.

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