IoT is all about the exchange of information among devices via the internet. The catch here is that there is no human intervention. It may seem a bit scary, but these devices have widespread application today.
For instance, the only reason you can monitor your home via a security camera while sitting in your office chair is IoT. If you can turn the AC ON at your home before even entering it, thank IoT.
The advent of IoT devices has disrupted almost every industry sector. IoT in Fintech has seen some of the best advancements. As the usage of smart devices like phones, tablets, wearables have exponentially increased, firms are investing hefty amounts in IoT devices. This is the reason the market of IoT in Banking and Financial services is expected to rise up to $2,030 million by 2023.
Here is how IoT is affecting and will affect the Fintech App development and related sectors.
Contactless Payments
If we talk about one key aspect that has led more people to be a part of the Fintech industry via financial inclusion is payments. The way people make payments today has revolutionized the Fintech sector to a great extent. As per MordorIntelligence, the mobile payments market is expected to grow to $5399.6 billion by 2026.
Mobile payments are good, but wearable payments are better as they do not require any app. All you need to do is hover your device over the payment system, and you are done. This potential of wearable payments not only makes them lightning fast but also secure.
Plus, you don’t have to take your phone out every time you have to pay. A great example of wearable payments is Google Wear, an operating system designed by Google specifically for smart wearables.
With this, you can carry out transactions with your smart wearables in a limited number of countries till now. You can use it in the US, UK, Canada, Australia, Poland, Russia, and Spain.
Instant Fraud Detection
The sector that has been the worst hit by cyber-attacks is the finance sector. As per stats, the cyberattacks on banks and financial institutions surged by 238% worldwide between February and April 2020. This indicates only one thing that the security factor needs to be upgraded by Fintech App development providers.
If we look at the applications of IoT, it can seriously strengthen the security of financial transactions. How?
For instance, if any fraudster tries to make a payment, the IoT system can track the transaction and analyze it. Passing it through the cloud, the system can compare patterns and user behavior like the locations from which most of the payments are made, and the device used to make the payments. Based on this, if any unusual activity is detected, the account can be disabled, and the user can be notified.
Some of the financial institutions that are working on trailblazing IoT-based cybersecurity solutions are Citi bank and British Standard Chartered.
Improved Customer Service
Customer service is the core of every industry sector. Whether you are the Fintech App Development Services provider or communication services provider, you need to keep your customers at ease while using your services.
As far as IoT is concerned, it can brilliantly streamline the customer experience in the financial sector. Here is how!
With smart-beacon technology, banks and financial institutions can help their customers find the nearest bank branch anywhere in the world.
Like scanning QR codes, banks can use beacons to scan user devices to see if they have entered the bank branch and greet them with friendly messages. Moreover, this facility can be used to inform if any counter is free for use.
Maybe this goes way ahead, but IoT has the capability of providing users with automated banking services with no human intervention. This will surely boost the need for Fintech App development services.
Real-time Data Analysis
This is a bit tricky point as it may barge into someone’s privacy, but it can be leveraged by both banks and the users in a positive way.
For instance, with real-time access to data, a user can check if the bank has queues of customers or not. Based on that, a user can reschedule his or her appointment or complete the transaction from a nearby ATM.
With IoT-connected ATMs, banks can monitor and analyze their usage from time to time. Based on this, they can cater to user needs in specific areas.
Moreover, to reduce downtime of ATMs, banks can collect and analyze performance information too.
Detailed Customer Insights
IoT in Fintech provides various customer insights that you can gather and leverage to elevate the customer experience. For instance, gathering information about how users use the app may help you understand their pain points. Based on the gathered information, you can develop solutions for making a win-win scenario.
Spending Insights and Capital Management
Another great benefit of IoT in Fintech is the ability to monitor your spending. Unlike before, where you could see how much you have spent, with IoT, you can even know how much you have spent on which asset. For example, an IoT device with a Fintech app can track your spending patterns like spending on fuel, groceries, traveling, etc. Based on these insights, you can manage your money well.
This aspect can also be leveraged in trading by merchants. By getting real-time market information, they can make better decisions related to their investments.
Final Words
The internet of things has penetrated deep into our daily lives, which is the reason it has widespread application. Fintech App Development Services providers are finding the maximum application of IoT in Fintech App development. This is the reason we can make all of our financial transactions easily and within seconds. But, this is not it. It is just the tip of the iceberg.