IoT has brought us to the cusp of new technology dawn where the implications have just started to be felt. It has set up every industry in a state of transformation and banking is no different.
The technological advancements in the banking like- mobile banking, mobile payments, or biometrics-based authentication are just the tip of the iceberg. Going forward, when we look at the future of banking coupled with the Internet of Things, it appears shining in the limelight. The technology is creating an incredible value for the banks and banking system on the whole by making the network robust secure, improving protocols, enhancing data mining, and enriching service quality.
In the global scenario, a lot of banks are implementing IOT in their workstream and creating a plan to embrace the biggest invention of the planet. In the future, it’s anticipated that banks are likely to connect with connected cars, connected homes or connected cities through connected technology, and monetize in million dollars.
“For the banking sector, there are various chances to benefit by the IoT, with $2 trillion of monetary advantage,” – according to the Gartner research.
IoT app development will help every part of the banking sector, be it corporate banking, consumer banking, SME banking or insurance to absorb the resources and tap the possibilities with new-age banking. It has coined a new term called bank of things.
The spending over Bank of Things solutions will continue to rise and spending is projected to grow to $153.5 million by 2018. However, less than half of the global bankers share the familiarity with IoT and expected to take the IoT initiative believing the technology as transformational.
Taking the banking institutions into the consideration that are turning to IoT to stay competitive, let’s take a glimpse of what’re the benefits to come into banking embracing IoT:
Don’t let users spend unnecessarily
Definitely, it’s a shocking rollout for the people where the banks will become so friendly with them that it gives the financial advice or offers suggestions whenever the customers past through a store or attempt to make payment for the item.
The banks- trusted infomediaries of the customers can send an alert to the customers to avoid eating at McDonald’s as they have already overspent on Starbucks this weekend. This initiative is taken by an Ally bank in the USA to control the overspending habits of the customers for their financial well-being.
Better control over mortgage assets
Many times, the retail banks or SME banks finance the customers against the valuable assets such as house, car, expensive appliances or manufacturing machinery. But, the value of these assets gets degraded with time and traditionally, it’s implausible to regularly examine the health of mortgage assets. That’s where IoT is a big help.
Leveraging IoT, the financing request and the transfer of ownership in mortgage-based loans can be processed automatically in a matter of seconds. Also, the health of the asset mortgaged can be monitored in the real-time and in case of any fraud, the banks can forge the asset immediately. In the event, the loan’s EMI is not paid by the customer, the banks can remotely disable or lock the machine to work. It simplifies the asset leasing and hands over more control over the leased asset which reduces the cases of frauds.
Even, the smart homes will have a bank account
Managing a home is not a simple task. Although connected homes have made it damn easier, still keeping track of account, spending and saving is needed to be done manually with a great intelligence to maintain a budget for everything. With the integration of bank solution in smart home devices, the accounts and spending will be managed automatically. See how it works?
The appliances and utilities that are already connected with smart home devices, could be connected to the banks for payment and budgeting. For instance, based on the budget set for smart meters, the device ensures that bills won’t exceed the pre-defined amount by automatically adjusting the room temperature, switch on/off lights and others. Thereafter, the bills can be paid by the banks without human intervention.
Also, the IoT app can keep track of the items in the fridge that are low in the stock, then search for the best deals and order the items by settling the payment on its own.
It works as a personal finance manager for the homeowner that can itself do the detailed analysis, spend on a shopping spree and then provide the statement for the bills. It helps the bank to add value to its customers and let them manage home better.
Capital One is one of the banks that has made it possible for its customers to pay the utility bills, automatically order grocery items, or buy home insurance in an automated fashion. Also, it allows the customers to check the account balance, savings, spending in the last week, due mortgage or loan bills just by speaking to the Amazon Alexa.
Learn More: Smart to Smarter things with IoT technology
Connecting the connected cars with banks
The autonomous cars have become more than a concept. Dubai has set a target to make 25% of all the transportation driverless by 2030. It will have a great impact on the insurance and banking institutions.
With IoT development, the banks can allow the cars to pay for the fuels and toll tax. The cars can even have an account that gives them a complete picture of the car servicing and insurance and works as a personal finance management for the driverless cars.
Also, the people thinking to uberize the connected cars as an investment will bring another opportunity for the banks to provide the mortgage loans.
One of the banking institutions- BlueShore financial to fill the passengers time during travel with driverless cars, has come with a new interface for the car’s windscreen which lets the passengers review their wealth portfolio.
Taking a step ahead, the banks can even warn the people to move into the city after an hour due to the current traffic congestion that will perk up the toll fees and thereby it helps them in saving a few bucks.
The smart technology is mapping the value for the banks beyond the hype created. IoT has opened up the ample of opportunities and possibilities for the banks, which banks can avail when they have access to customer’s data. Tapping into the data, the banks will become infomediary for every customer that not only make an order and payments on their behalf while providing them relevant advice, offers, and rewards to better manage the spending and prevent their saving accounts from getting nil.
Taking a proactive approach to IoT programming, the banks can serve the customers in a more personalized way and create a compelling experience alongside respect their privacy. The changing face of banking leveraging IoT is pushing the IoT trend upward and making it a next big thing for the banks.
Are you ready to breathe life into your imagination for the bank of things? Or still, keeping IoT as a distant thought for your bank? Let us know your views in the comments below in regards to how you consider the banking innovations embracing the fabric of IoT.