May 13, 2020 - It’s become something of a cliché to say that the Internet of Things has fundamentally changed — or is in the process changing — any particular industry, because IoT by its very nature is changing everything.
Any industry that can benefit from leveraging Big Data or can find new ways to use data aggregated from its own products and customers is inevitably transformed by IoT, and banking services is riding just such a wave.
How can banks benefit from IoT? There are countless applications that can enhance security, privacy, efficiency, and customer relations. Here are five of the most compelling:
AI-powered Voice Assistance. For many banking customers, the last few decades have been charting an evolution away from personalized service, with teller lines giving way to ATMs and smartphone self-service transactions. The IoT can swing the pendulum back in the other direction, with AI-powered voice assistants that can give clients personalized attention – ironically, without adding to the workload of human customer service professional.
AI systems can give customers access not just to basic information about their finances, but use advanced natural language recognition and detailed information from customer accounts to provide an experience that comes close to mimicking a real human being. Already, IoT-powered voice assistants using devices like Amazon Alexa-powered Amazon Echo speakers can help banking clients for simple details like bank balances and when certain payments are due. In the future, IoT assistants will be able to perform sophisticated activities that would previously have required human assistance.
Biometric Consumer Payment Security. When it comes to security, one of the weakest links is in the customer’s wallet — credit cards and debit cards are easily lost or stolen, cloned, and run through skimmers. Moving clients away from these obsolete technologies represents perhaps the single greatest potential security boon of the 21st Century. The IoT promises new, personalized, and far more secure payment systems.
These can take the form of payment apps on smartphones or wearable tech like smart watches and wristbands (already, Fitbit offers mobile payments on the company’s line of fitness bands). These technologies can incorporate multi-factor authentication and biometric approval, eliminating the ability to spoof, clone, or steal the tech in any meaningful way.
IoT + Blockchin = Efficient, Secure Transactions. When combined with blockchain, IoT can also significantly increase the efficiency and security of all transactions. Blockchain — a distributed digital leger that securely records information across peer-to-peer networks and on devices embedded in the Internet of Things – essentially makes transactions faster and more efficient, while simultaneously ensuring they are permanent and tamper-proof. Blockchain security can fundamentally rewrite the rules when it comes to transaction security throughout the banking industry.
“Internet of Values” Automated Transactions. There are pundits who believe that blockchain may also give birth to an “Internet of Values,” in which any asset that has a value — currency, contracts, intellectual property, real property, and more — can be transferred via the internet. In principal, this can happen in real time, without any process delays in the transaction workflow. For this to happen, blockchain will need to be adopted not just in the banking sector, but also in retail, services, logistics, and other industries.
Real-time Consumer Spending Feedback and Data-crunching. Americans have bad spending habits. Credit cards can encourage people to spend beyond their budget, and The Washington Post reports that 44 percent of families have revolving credit debt. Banks can help their clients exhibit more fiscal restraint.
Smart devices – wearables, like smart watches and wristbands, for example – can be equipped with apps offered by banks that offer reminders about budgeting and even vibrate or alarm when mobile purchases are about to break the client’s budget or exceed previously specified spending limits.
This kind of interactive assistance can go beyond black and white bank balances and credit card limits, letting banks become real partners in helping their clients master their finances and get spending and savings under control.