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Finance, Banking and The Internet of Things

How Banks Can Leverage The Internet of Things To Improve Security & Better Serve Their Customers

The concept of modern banking has remained relatively unchanged since the Renaissance Era of the 15^th century. In simple terms, banking relies on individuals or organizations to deposit money with the bank; in return, the bank pays interest on these deposits. The bank then loans these deposited funds out to other individuals or corporations. Debtors than repay the banks with interest. Although the concept of banking has not changed much, bank operations have changed significantly. Banks are now increasingly trying to connect their systems to the internet to improve bank operations. Thanks to the Internet of Things technology, bank operations related to security and customer experience will continue to change for the better.

1. Security

By leveraging Internet of Things technology, banks will be able to better protect and secure their assets. Particularly, IoT technology will make remote asset monitoring and customer identification easier for the bank.

Remote Asset Monitoring

Internet of Things (IoT) technology will enable banks to better monitor remote assets such as Automatic Teller Machines (ATM). This can be particularly useful with ATM’s placed in remote areas or in areas with high incidents of crime. For example, banks can use CCTV cameras that are connected to the internet to monitor their ATM’s in real-time. Banks can also install various sensors that are connected to the internet to monitor various parameters on the ATM such as movement around the ATM, changes in incline, changes in temperature, or power fluctuations. If any of these monitored parameters were to leave accepted standards, the ATM can be programmed to trigger a response such as a full lockdown or the sounding of an alarm.

Customer Identification

Advanced forms of customer identification beyond a simple identification card can be implemented at banks by leveraging the Internet of Things technology. Banks can implement a system of biometric scanners such as retina and fingerprint scanners that are connected to the internet to better verify a customer’s identity and prevent fraud. Biometric identification is always a better way to identify an individual as biological identifiers are more difficult for fraudsters to acquire let alone, replicate.

2. Customer Experience

Banks can also leverage Internet of Things (IoT) technology to improve customer experience. Specifically banks will be able to better connect with customers and provide better customer service by utilizing IoT technology.

Connecting With Customers

Internet of Things (IoT) technology will enable banks to better connect with their customers. Banks can also leverage a customer’s connected devices such as smartphones and smart connected cars to provide real-time discounts and offers according to geographic location instead of offering generic blanket offers to all of the bank’s customers. Banks would also be able to go a step further by monitoring a customer’s spending by taking data from a customer’s smart devices and appliances such as smart electric and gas meters. By combining the data from a customer’s smart connected appliances and devices with data from a customer’s bank statements, the bank will be able to better analyze a customer’s spending habits and create personal budgets.

Improved Customer Service

Banks that leverage Internet of Things (IoT) technology, will be better able to serve their customers. For example, banks can connect their ATM’s to the internet and analyze the frequency of their usage. By analyzing the frequency of usage of their ATM’s, banks can install or remove ATM’s in areas according to usage. Banks can also identify a customer’s visit trends to a branch by utilizing IoT technology. For example, sensors can be installed in the doorways that can identify a customer based on an electronic device such as their mobile phone. These sensors are integrated into bank systems via IoT technology. By using the data from the sensors and bank systems, a bank can analyze a customer’s time spent in the branch for a specific service. Based on this data, banks can arrange staff shifts for these services accordingly.

Conclusion

It is likely that the concept of modern banking will remain unchanged for the foreseeable future. However, bank operations will continue to change as new technology becomes more feasible, chiefly Internet of Things technology. Banks will be able to leverage IoT technology to improve security and customer experience. With other sectors such as transportation, healthcare, and energy embracing IoT technology to improve performance and satisfy customers, banks too will have to embrace this technology to further improve performance and satisfy customers