The Internet has gotten into many avatars during its evolution. Today, the world is in connection and that’s due to the Internet; and now the Internet of Things (IoT). The number of connected devices all around the world will rise to 25 billion in 2020. , it’s also instigating industry-wide shifts in many sectors and the banking industry is no exception. The IoT infrastructure that enables the transmission of data across patrons, commercial businesses, and financial institutions is now known as the “Bank of Things.” While still in its initial stage, the increasing adoption of smart devices is likely to set off its exponential growth in the decade ahead.

How is IoT reforming businesses?

IoT isn’t science fiction anymore, it has become a reality now. It’s alluded to the monitoring & controlling of processes via the internet rather than embodying manual efforts to execute such tasks. IoT has reformed how we deal with things, making business faster, cheap, and more systematic by each passing day.
 
According to a recent study, IoT-based banking and financial services will grow at a CAGR of 55.3% by 2027.

Is IoT ready to change the way we bank?

Now looking into the use cases for IoT in the banking sector has already adopted M2M communication for monitoring and managing systems – where the system indicates digital signage, ATMs, and CCTV. IoT has turned into a significant part of banking technology evolution. From adding value to customer experience to set up digital banking machines to cut queue time, IoT has become a large part of the ‘future bank’.
 
Let’s discuss the fringe benefits and ways of how IoT continues to evolve while bringing dramatic changes in the banking industry.

Enhanced Customer Experience with Smart ATMs

There are millions of automatic teller machines (ATMs) worldwide. Many non-banking businesses like convenience stores and hotels provide the amenity of on-site ATMs for customers. Albeit, ATMs have been around for years now, they continue to go through advancements, thanks to IoT! Moreover, some even have embedded sensors to detect potential meddling that could state ATM’s theft attempts.

See how AI facial recognition technology is raising privacy concerns.

Some ATMs link with connected services such as smartphone apps. ‘Wells Fargo’ is one of the banks that allow its customers to retrieve cash without using bank cards – customers get single-use codes on their smartphones that serve like inserting a card. So, it is important to consider to understand IoT Security & ways to achieve it. With IoT’s help, banks that offer such service can get statistics that will give an account of how many people use the card-free service. Later, those entities could use that data for several purposes such as; customer interaction improvements or marketing.

More Options for Personal Banking Services

Many leading banks offer several personal banking services – from checking accounts to automobile loans. These services assist people to get the most value from their financial institutions as some customers seek specific facilities when selecting banks for their business.

IoT tech will have a positive impact on those services by providing people a means of approach, likewise to how online banking spurred changes. Banks know that customers want to take care of their financial needs in a trouble freeway. So, the brands in the sector will strive to find ways to use the IoT to provide more opportunities or cut out unnecessary steps.

Credit Card Experience Will Improve

The IoT has enabled interactive credit card development –customers can ask the bank a question at any time via the card-embedded display screen and get a quick response for the same, allowing customers to make account changes more with more informed services. These interactive credit cards will lead to marketing customization and the massive growth of client support for service providers. While smart credit cards aren’t still so common yet, such projects have already been announced back in 2018.

Curating Experiences

The rise in IoT in banking sector curate a customer experience that extends beyond traditional services by developing a close & personal relationship with their customers. Banks are now in a position to use IoT initiatives to motivate their customers to achieve personal targets in return for greater financial rewards and benefits.

For example, banks now encourage healthy lifestyles by encouraging customers to stay fit and offering them financial incentives and perks once they achieve certain goals. Through such initiatives, banking goes a step further in creating a more customer-centric experience.

Smart Contracts

If recent fintech advancements have taught us anything, it is the urgent need for enforcing a secure environment for financial transactions and ensure the protection of any and all records.
 
This coupled with the rise of blockchain technology has created quite the stir in the financial arena with establishments interested in utilizing IoT to secure records of authenticated transactions.
 
This isn’t a far-fetched dream as showcased by the Commonwealth Bank of Australia, which was able to complete a global two-way trade transaction between banks through the usage of blockchain contracts and the IoT.

Analyzing Data

To have a device that can both collect and process complex data 24/7 opens up a world of possibilities for its users. Through the use of IoT devices, individuals can not only stay up-to-date with information but also help banks gain valuable insight into customer needs.
 
Moreover, since this same technology is in use for trading & investment market due to the real-time market monitoring it offers, it has proven to be a huge asset for individuals to analyze market trends & set up investments while helping financial institutions improve their decision-making processes.

Summing Up…

Although the uses for the Internet of Things in banking have shed a light on a few existing use cases, its adoption levels are still quite low. Banking brands are likely to experiment with some of the opportunities, along with implementing many others in the forthcoming years. Both fintech startups and banks who incline to take the risk in IoT adoption will be tomorrow’s industry leaders. The IoT and banking industry already offers a wide range of advanced possibilities when it comes to customer management and business process automation. This will lead to creating a new system that will enable increased productivity and higher profitability in all sectors.