5 ways IoT can change the way of Banking

When it comes to digitalization, Banks are moving at a slow pace as compared to other industries. They are lagging behind in the race of technological advancement. For instance, if we look at the fashion and retail industry, they are moving at fast pace with online shopping portals, shopping apps etc.

With Internet of Things and Big data changing the way businesses function, Banks too can take advantage of this wave of technological advancement in improving their services and customer satisfaction.

Through this article we look at 5 different ways in which banks can make use of IoT to benefit itself and its customers.

Way# 1: Make banking products better with IoT

Internet of Things can help in making banking products better. For instance, with the help of IoT-enabled technology, banks can offer a more rewarding experience to their debit and credit card holders. This can be done by collecting and analyzing data of usage of ATM’s at various locations and figuring out which areas have higher foot traffic to take decision with respect to ATM installations.

Also banks can install IoT devices like video tellers and kiosks in branches so that sensing technology can monitor and take action on the consumers’ behalf.

Way# 2: Using IoT to manage investments

Investments in the Banking industry are extremely important. And if IoT can help banks improve their service when it comes to investment, they can definitely achieve customer delight.

For example, Imagine a scenario where a customer’s personal health monitor is connected to his/her investment account with the help of IoT. And the way it functions is at the sign of any serious health problem, for instance, a heart attack, customer’s investment account will automatically transfer his/her holdings to more liquid securities anticipating future cash needs.

Way# 3: Payments can be made easy with IoT

For banks, payments as an area has a huge scope for implementing IoT applications. For instance, imagine a scenario where all household devices are connected with Internet of things. So a customer’s refrigerator can sense how much milk is there or has the household run out of milk and would order a packet of milk from the nearby store. Banks can utilize his opportunity to help in the payment process. A bank app can be made available to the customer for his payments and they can imbibe loyalty programs in the app to collect data which can be utilized for marketing and customer service purpose.

Way# 4: Enhancing customer experience

Bank can use beacon technology in their branches through which they can gather information about their customers. Information like ‘How many ATM transactions the customer has done?’ or ‘How long they had to stand in the line to deposit cash?’ or ‘How quickly was their query addresses by the customer service executive?’ can be collected and then analytics can be applied to improve the customer service experience.

A thorough analysis will help banks take steps to improve the customer service. For instance data reveals that customers have to stand in queue for longer periods to deposit cash between 8a.m. to 10a.m. In that case banks can take measures like having more desks to cater to customer and hence reduce the wait time.

Way# 5: Improved Security

In the banking system, security is extremely important. Banks function on the trust of customers and today with so many options available in banks, customers choose only banks where they feel their money will be secured.

IoT can help in raising the bar of security for banking. For having a strong identity security and privacy protection system in place, the more data points a bank verifies the better it is.

Biometrics is one way which can assist in the authentication process in all digital banking transactions and this can be done with the help of wearable technology thereby increasing the potential. Also geolocational capabilities of all mobile devices can be used for validating an individual’s whereabouts as part of the verification process.

With more such specific data points, banks can make their verification process more stronger and safer and hence have better risk management tools.

Conclusion

Internet of Things can definitely bring changes to the way banks are functioning now and banks need to be proactive to bring such a change. It can help banks innovate in their way of service offerings and provide a more convenient and safer banking experience to its customers. But innovations of these kind do come with some risks. And only when banks start to implement will they understand the obstacles that come in the way.

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Manisha Salecha

Manisha is a Senior Content Analyst with Analytics India Magazine. Apart from writing & editing articles and taking interviews, she is also responsible for covering analytics news, and handling social media for AIM.