Internet of Things And It's Potential In The Banking Industry

The Internet of Things, or IoT, has been one of the buzzwords being thrown at us internet denizens over the past few years, but very few of us would have a ready answer if they were asked just how much of an impact they expect the phenomenon to have on their day to day lives.

Sure, we can all agree that having all our appliances and household gadgets connected wirelessly would make things a lot smoother around the high-tech home, but we’re not all living in Blade Runner world just yet.

Most of us, on average, have a couple of Bluetooth ready appliances or perhaps a smart fridge, if we’re looking to be all cutting edge and stuff. So, what exactly is the big deal with IoT? Well, one of the industries that expect to see a great deal of upheaval with the new tech’s possibilities is the financial banking industry.

They are under immense pressure to deliver more effective, customer-focused experiences to their clients, and this technology promises to make that possible in terms of simplified payment streams and service provider consolidation.

Financial Technology Upgrades

We aren’t new to the world of FinTech, but the Internet of Things holds the potential to completely upend the ways in which it can transform our banking experiences and overall connectivity.

Banks have been reliant on data analytic applications to derive actionable insights on consumer behavior and preferences which they make use of to develop more streamlined processes, reduce support overheads, boost marketing efficiency, and even deliver instantaneous opportunity utilization to pull their bottom lines further up out of the red and into the green zone.

We might even see a way for IoT’s application in the commodities trading field down the road – with the right vision and will behind it.

Here are a couple of the more salient ways in which banks are taking advantage of IoT to turbo-charge their operations:

1. Beaconing

Proximity marketing used to be the preserve of physical, brick-and-mortar retail operations, but banks haven’t been napping with regard to the potential of the method for their operations.

With beacon technology, whereby potential and existing clients may receive personalized, location-preferred service offered or delivered to them, banks are banking on IoT to help them get closer to their clients.

In New Zealand, Westpac Bank is making use of Apple’s iBeacon (ugh) to deliver location-based, custom-made, messages and alerts to help tellers at their outlets give each customer that appears at their counter a tailor-made greeting. It’s not all about personalization however; it’s directly helping them make more money as well.

For instance, you may have mobile banking application users opt to receive special offers from certain retail stores with the added recommendation that their bank’s services or cards be the conduit through which payments are affected. It’s a win-win. Customer engagement receives a boost while spending is potentially boosted on the bank’s platform.

2. Machine to Machine Solutions (M2M)

The banking industry already sees the widespread implementation of M2M technologies, even though we as their clients may not be able to notice them. They are applied in the capturing of mobile interactions, customer service data-metrics, identity management strengthening, and many other spheres.

What’s been holding these institutions back from a full-blown implementation of these solutions is the existing complexity involved in the methods. What IoT promises for all those facing this challenge is a greatly simplified way to collect and utilize this highly fruitful source of actionable data.

At The End

The bottom line of the whole IoT debate, when it all is said and done, is that it has great potential to facilitate smarter business decision-making on the side of the institutions that take it up while increasing the levels of customer satisfaction that clients and customers will experience.

You can’t put too high a price on the value of service delivery in this day and age, where every client knows their own worth and has a whole raft of options at their very fingertips.

Financial institutions have a very clear opportunity compared to many other players in that the power of IoT when it comes to their FinTech strategies is abundantly clear. The path is already visible for them.

By leveraging the unique insights afforded to them by the technology to provide personalized services to their customers, they may reform a hitherto impersonalized service to one that puts them in close touch with the market they rely on. There’s no denying the value in that.

By Manish

Sr. Content Strategist

Meet Manish Chandra Srivastava, the Strategic Content Architect & Marketing Guru who turns brands into legends. Armed with a Masters in Mass Communication (2015-17), Manish has dazzled giants like Collegedunia, Embibe, and Archies. His work is spotlighted on Hackernoon, Gamasutra, and Elearning Industry.

Beyond the writer’s block, Manish is often found distracted by movies, video games, AI, and other such nerdy stuff. But the point remains, If you need your brand to shine, Manish is who you need.