Wearables, payments, cars and contracts. Therefore, there is a high risk of data and personal information regarding the customer’s privacy and security of funds being compromised through “hacking.” In the financial industry, privacy and security are considered very important and are not treated with levity. Considering the costs of purchasing IoT devices without considering the costs that may come after is all too common. IoT plays a huge role in the financial sector; it has the potentials of changing the financial and banking sectors. Making the whole connected banking experience safe and secure is vital to gain consumer trust and ease any concerns around their personal privacy and private banking being hacked. As IoT impacts on the banking industry over the next five to ten years, there will also be new security challenges for banks to manage. Isn’t that much easier? In such a scenario, a retail or SME customer could possibly raise short-term small finance by offering manufacturing machinery, cars, or … Gartner predicts that IoT security spending will reach $3.1 billion by 2021. Enhancing the Efficiency of Branch Banking. In the last few years, technology has not only made life easier for people. Mobile banking solutions often induce risks to traditional branch systems. With IoT, financial institutions can track the location of a financial crime, identify the type of device used in carrying out such crime and even get to the root of it on time. IoT also prevents fraud through authentication where wearable devices can be used to gather the biometric data of a customer; the combination of such biometrics and strong cryptography make it possible for the information to be secure in the bank’s database. The banking and financial services sector has been deeply affected due to the collapse of businesses, disrupted operations, and an extended delay to an unsought deferral in the receivables. In short, IoT devices offer improved customer service and greater business efficiency, but the benefits of the IoT in financial services cannot be realized simply by purchasing IoT devices — that’s just the beginning. Keep an eye on these devices, what they’re doing and. IoT technologies as mentioned earlier require the connection of lots of devices through a network; however, if there is a break in that connection or if one of such devices is removed, there would be a complete breakdown in the system thus leading to huge losses. Securing IoT for banking. Retail banking estimated to lead Big Data adoption by 81 percent. • Improve security: Security is considered a top priority in every financial institution. For instance, smartwatches when connected to customers’ accounts through IoT, allows the person to receive notifications such as alerts, balance as well as reward points. • IoT simplifies daily operations by reducing dependency on the human workforce.• It can also be used to facilitate financial operations such as saving and spending pattern analysis, estimation of balance, as well as financial planning.• Devices powered by IoT (microsensors and wearables), can be used to enhance productivity manifold of an employee and always keeps them connected.• IoT provides robust security of data through its many authentication tools• It can be used to facilitate effective risk management in financial organization by gathering real-time data of assets of clients• IoT technology drives automation in investment and trading because it provides real-time market surveillance and pricing engines which investors can use to monitor market trends and strategize accordingly.• IoT can be used by providers to enhance customer satisfaction by adopting geolocation marketing strategies. To ensure that traditional banking still yields some fruitful value, the service providers opt for IoT and banking applications. Many IoT devices used in the financial services industry are customer-facing. The 13 Best Hybrid App Development Frameworks for 2019, Data Warehousing in the Cloud: Amazon Redshift vs Microsoft Azure SQL. • Determine the right placement of banks and ATMs: IOT provides insight to banks on areas that require more branches and locations where new ATM machines can be installed to meets the customers need. IoT technologies are no exception. Also, with the introduction of mobile banking where customers can carry out various forms of transactions without visiting the banks and self-assisted customer care services where issues can be resolved by a virtual assistant, IOT helps financial institutions improve customer experience, manage risk, secure funds from cyber attack, and improve the entire banking security system. Some of the benefits of IoT for banking include the following: • It saves time and simplifies work processes• It provides insight for banks to understand customers’ needs. One of the most remarkable uses of IoT in banking was developed by $4.5 billion-asset Idea Bank of Poland. It’s not all about buying the devices, it’s about what comes after the purchase. Shockingly, only 12 percent of organizations found the IoT to be beneficial on its own, but with AI added, that statistic rose to 31 percent. Mitigating these risks will be essential for ushering in the tech-driven banking solutions that many organizations are looking to implement. That covers point-of-sale (POS) devices, security motion detectors and even internet-connected coffee machines, to name a few. • Data Analysis: IoT also helps banks and other financial institutions to collect data through the use of digital sensors and mobile apps. Hackers, governments, and business competitors can use IoT devices to spy on and intrude on the privacy of unsuspecting individuals and organizations. IoT industry is constantly developing and offers new digital devices. Or explore the below infographic, which was created at the BAI Retail Delivery Conference where the Deloitte Center for Financial Services hosted a sponsored session on IoT in financial services. Most of these devices can tell if you are away from your home, If attackers were to compromise the device, they could turn on the heat in the summer or shut the heat off during winter when temperatures are below 0 … Home devices like smart speakers allow consumers to open accounts through voice commands, which can trigger back-office workflows. This can start out great but turn sour when the batteries inevitably weaken and ultimately die. Banks, for example, can use IoT tech to form a higher-resolution picture of credit risk or to recognize customers as they come through the door for a smoother, more personalized customer service experience. Although the use of IoT technologies has so many benefits on the banking and financial institutions, some major challenges may be faced by financial institutions when adopting IoT. The branches can use biometric sensors to collect data as soon as a customer enters the bank. IoT can be used in the banking industry; some examples include using IoT for ATMs, using devices to help curb spending, having more flexible ways to interact with bank employees and open accounts and using wearables to help efficiency within banks. • Tailored Marketing: At present customers are n demands of personalized solutions that meet their varying needs. • Make transactions easier: Imagine making payments without the need for cash or credit cards but with biometrics such as voice and face recognition. Gather claims that 20.4 billion of connected ‘things’ will be utilized all over the world by 2020. The IoT and banking industry already offers a wide range of advanced possibilities when it comes to customer management and business process automation. Blockchain Trends 2019: In-Depth Industry & Ecosystem Analysis, Facial Recognition in Retail and Hospitality: Cases, Law & Benefits. • Proactive Services: IoT makes it possible for banks and other financial institution to detect service faults and find solutions to them before it becomes serious. This is one major challenge that may stop some financial businesses from adopting this technology.• There are no set/common standards for equipment maintenance: IoT hardware equipment are of different types; they are built by different types of manufacturers and require different maintenance approach. IoT has the potentials of totally disrupting the financial sector in the future and causing all banks to embrace its use due to the benefits it has to offer. That’s what IoT does. All these factors have collectively led to an acute hollowness within the banking system. Some of these challenges include: • IoT is prone to hacking: IoT features a whole network of connected devices and software. IoT has made it possible for banks to keep a track of all consumer activities and present a solution specific to the needs and desires of the client. Expanded range of Service beyond Banking. As time goes on, banks, as well as other financial institution, may cut down on the workforce due to this technology leading to a high increase in the unemployment rate which may be of negative impact to the economy of so many countries. With this, banks do not have to waste fund in creating banks where customer demand isn’t on the increase. That estimate is likely conservative, as spending will likely increase once organizations fully understand the security and privacy risks associated with the IoT. • Chatbots for improved customers experience: Chatbotshelps the banking and financial institutions to automate customer service inquiries easily. A survey conducted by SAS, Deloitte and Intel found that 92 percent of respondents reported business improvements after integrating AI with IoT systems. Already so many startups are adopting the use of chatbotsimplify processes and automate tasks. And due to the nature of financial business, both the promises and the risks of the IoT in financial services are great. According to MarketsandMarkets, the market size of IoT in the financial and banking industries is expected to reach over 2 billion USD by 2023.Banks and financial service providers are expected to actively leverage the potential of this technology. When an organization makes an IoT device purchase, it must also allocate funds for implementation, security, maintenance and other post-purchase matters. At present, banks are in continuous demand for these types of IoT-based products and more from companies that make such products. • Banks that make use of IoT can stay ahead of competitors• It helps banks improve the security of their customers’ accounts through encryption and authentication where these accounts can only be accessed by the customer only.• It is cost saving. All rights reserved. Some of these challenges include: • IoT is prone to hacking: IoT features a whole network of connected devices and software. In order to tailor a banking solution, the banks need to get the right information about a client need, economic conditions, and buying behaviors. Since banks deal with the gathering of data, and massive data transfer, IoT will help banks and financial institutions save time, and work smarter. IoT devices are notorious for security vulnerabilities — in 2017, nearly half of all companies using an IoT network had been the victim of a security breach. Further, it is estimated that through 2022, half of all IoT security budgets will go toward fault remediation. IoT makes it possible for banks to keep track of all consumer activities and present a solution which meets their need. Proper use of IOT is opening up gateways for better, more consistent salespersons, with better customer support and a stronger overall link between banking institutions. Banks can utilize IoT technology to expand the range of services they offer to their customers beyond the traditional ones. Yet the IoT offers retail banks an opportunity to gather more information on customers, offer more personalized experiences and improve efficiencies. Some banks even have their own devices and payment solutions. Record keeping organizations and nonbanking financial companies are looking to connect with individuals and entities, looking for establishing a highly integrated banking systems led by either of the ones mentioned above. IoT technologies help to improve security by detecting and preventing fraud even before they occur. Higher unemployment rate IoT helps automate working processes that required human brain before, and it means that some employees would simply lose their work positions, especially if these are young and not so skilled workers yet. Some of the early examples come from the auto insurance industry. Banks might use IoT technologies to create more engaging and context-aware customer rewards, or to generate more intelligent and personalised customer cross sell opportunities, for example. At the most basic level, someone could take over a security camera and use it to spy on their target’s movements and habits. 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