How IoT looks set to transform the future of banking


In the world of banking, IoT – the Internet of Things – is a nascent technology.

Though BizTech reports that banks have not widely adopted IoT technologies, many financial firms clearlysee the germ of potential in IoT. Over 40% of them are experimenting with IoT and Big Data, says RedPixie.

Of course, the applications of IoT and Big Data can often go hand in hand, given the wealth of statistical data which can be gatheredfrom a range of devices within an IoT network. However, many banks might not realise how they could tap into IoT’s potential through the following means…

Determine the appropriate placement of banks and ATMs

A bank, like any other business, would be unnecessarily compromising its continued efficiency if it allows particular branches to stay open even as they haemorrhage in visitor numbers. For an insight into which branches are trailing on this count, banks can deploy sensors to track foot traffic.  

In measuring foot traffic, the bank can inform its decisions of which branches to close and which to leave open. They can also put location data tothis purpose – as well as that of optimising ATM placements. They could even use beacons to let customers enter ATM lobbies after hours. 

Detect and prevent instances of fraud 

Fraudulent crimes daily impact financial services and, if not curbed effectively, can result in lasting damage to the reputations of banks that provide these services. However, almost 70% of companies are interested in using AI and IoT technologies to detect fraud. 

There is evidence that these businesses could reap impressive returns from implementing IoT for this purpose. Banks could even help to prevent fraud occurring in the first place, given that tracking the geolocation of a customer’s assets, for example, can assist in discerning where risk particularly lies.

Provide personalised services to customers

It is no understatement to say that a bank’s customers are its lifeblood. Therefore, banks clearlyhave an interest in fostering stronger loyalty in their customers – and they can do this by delivering tailored services to these customers. 

Through combining IoT and Big Data, a financial organisation can analyse various aspects of its users’ behaviour – including the regularity with which they visit merchants or transact money. On the basis ofsuch data, banks can provide retail offers or discounts personalised to customers’ preferences.

Allow customers to effectively use wearable devices

The recent reveal of the Apple Watch Series 4, with its larger display and revamped casing compared to previous iterations of the Apple Watch, has reminded us of the continued march of the wearable.

Whereas,once, the idea of using a watch to pay for goods was limited to the realm of science fiction, it’s now part of the here and now of technology. Banks can make their own wearable devices for providing to customers, who could react with delight to being able to bank more conveniently. 

It has been predictedthat, by 2020, 345 million people will use wearable devices on an average day. Thisis opening up a significant market into which various banks can fruitfully tap. 

Analyse and streamline business processes

There are many futuristic – or close to it – ways in which banks can use IoT and Big Data. However, banks should also not lose sight of how they could use these technologies to streamline more routine aspects of their operations and, thus, enhance environmental efficiency. 

If you remain unsure how to improve your bank’s use of IoT technology, HPE cloud finance services could help by providing more cloud storage with which you can play with Big Data.