People used to think that banking, financial services, and insurance Industries would be less likely to use IoT-powered innovations because these fields tend to be very bureaucratic. But look at the market size of global financial technology (FinTech) now. It's currently worth around $165.17 billion.
What makes IoT in BFSI a good idea? Overall, IoT-enabled advancements offer a range of digitalization benefits. When it comes to digital solutions, they're always about increased productivity, competitive advantage, customer and employee satisfaction, and profitability. Apart from these, here are some perks of iOT in BFSI industries.
Automation
IoT-powered systems can automatically process requests, open bank accounts, disable credit cards, and many more. It means people don't have to do as much work and make fewer mistakes.
For example, IoT-enabled communication between the clients' payment systems and the CPAs' software allows for quick and secure data exchange in accounting. It simplifies routine bookkeeping tasks like data entry, reconciliation, and billing. Additionally, with IoT, accountants can keep track of financial data in real time and get accurate information about how a business works, which helps them do their advisory jobs better.
IoT solutions also make a difference in auditing by making it more open and automated. For example, CPAs can watch transactions and control audit trails in real-time to find data inconsistencies and stop fraud.
Improved Analytics
IoT technologies can give up-to-date information about projects. It helps them measure the return on investment (ROI) more accurately.
For example, IoT devices can gather information about a bank's clients. That's how financial companies, including online loan providers like CreditNinja, get to know their customers and learn more about what services or products to offer them.
IoT-based intelligence can also attract customers by giving them relevant options to redeem based on how they shop and who they are. For example, a customer who spends most of their money on clothes should get reward points that they can use to get discounts on clothes. With the help of IoT-enabled data analytics, this targeted reward will make customers more interested and loyal.
Fraud Detection
AI-powered IoT and analytics can help determine fraud and hacker attacks by gathering and analyzing users' account data. If suspicious activity is found, the user can be notified immediately, and their account can be turned off temporarily.
For example, IoT devices have made banking transactions safer. Biometric information from a user's phone is needed to purchase mobile phones. Many websites also require users to enter an authentication code or one-time password (OTPs) sent to their phones by their banks, ensuring it's them buying something.
IoT devices can also keep track of the state of insured things and let insurers know. If anything is wrong, they can take steps to lower risks. Insurers also use data from IoT to take a preventive approach and predict what'll happen.
For example, an insurer can find a problem with an asset and tell the policyholder about it before it's damaged. This method helps cut down the number of insurance claims.
Real-Time Monitoring
IoT devices can get information from the banking environment in real time. Banks can determine customers' needs at any time or place with this information. One example would be figuring out how long a customer will have to wait in line at the bank.
Financial companies could also notify users when their balances are low by sending them alerts. The point is that banks can offer more accurate services if they get real-time data.
Further, IoT solutions can help manage problems like skimming devices, broken card readers, and cash shortages by keeping track of automated teller machines (ATMs) in real-time. Some banks also verify their customers and let them enter their IoT-enabled ATM lobbies without a card by using wearables with Bluetooth beacons (e.g., smartphones).
Improved Customer Experience
Gone are the days when clients had to go to brick-and-mortar offices in person. Thanks to the integration of IoT solutions, bank and insurance transactions can now be done conveniently anywhere, anytime.
One example of this is one-touch payments. Users can pay for things without directly using their credit or debit cards. It's made possible using devices with near-field communication (NFC), like smartphones and smartwatches. It makes it easier to do financial transactions and offers a better customer experience.
IoT makes communication easier and better too. Since it can analyze customers' behavior, it can also help personalize communication and customer predictions. As a result, customer experience is improved.
Final Thoughts
IoT is one of the revolutionary technologies for the banking, financial services, and insurance industries. It doesn't only help companies keep up with the time but also helps them keep their clients interested in their services.
