The Internet of Things (IoT) industry is expanding rapidly, offering individuals a wide range of digital devices and sensors. IoT refers to a network of internet-connected devices that collect and transmit information. In the banking industry, it is transforming the sector by personalizing rewards and offerings, managing capacity, debt collection, and detecting fraud. Businesses are leveraging IoT to introduce new services, change operational methods, and enhance the everyday client experience.
Effortless Implementation
The deployment of IoT applications is becoming simpler as governments upgrade their current cellular networking infrastructure to enhance communication speed and overall connectivity. Modern communication technologies like 5G networks are enabling real-time monitoring and communication, leading to the provision of real-time payment settlement systems in banks and financial institutions.
The global IoT in the banking market is expected to experience significant growth due to the rising demand for IoT applications and the increasing penetration of IoT-enabled wearables and smartphones. The evolution of IoT and cloud technology is anticipated to offer ample opportunities for market growth. Various vendors are contributing to the increasing penetration of connected devices in the business environment.
Impact of IoT in the Banking Industry
Banks are using IoT-based intelligence to attract customers by offering relevant redeemable choices based on their shopping demographics and activity. Key market players such as Infosys Limited, Cisco Systems, Inc., and IBM Corporation are actively incorporating strategies to enhance their market position. For example, India-based Bajaj Allianz General Insurance provides personal accident insurance based on IoT, offering real-time location tracking for school buses and children through GPS and beacons embedded in identity cards.
M&A Activity…
In the financial services sector, Capgemini acquired Chappuis Halder & Cie, strengthening its knowledge of the industry and offering comprehensive advice to its clients. Additionally, Infosys acquired digital marketing firm Oddity, enhancing its branding, creative, and experience design capabilities, and expanding its service portfolio.
Advantages of IoT in Banking
- Enhanced banking experience
- Efficient branch banking
- Improved consumer financial habits
- Expanded range of services beyond banking
- Enhanced credit card experience
Leading financial institutions are prioritizing fraud prevention and implementing AI-based anti-fraud systems. IoT-enabled surveillance systems at points of use, such as ATMs, are being used to prevent credit/debit card fraud. Additionally, banks are using IoT networks and sensors to track debtor businesses’ supply chain operations and activities to determine their willingness to pay without incurring high overhead costs.
Revolutionizing Banking Experience
IoT-enabled monitoring is being used to calculate average queue times at branches and optimize employee and counter numbers based on customer unit data. This technology is also utilized to determine optimal new branch locations and the number and location of cash dispensers based on usage data.
The Future of IoT and Banking
The Internet of Things has significant potential and numerous applications in the banking industry. It allows for a seamless transition from traditional processes to modernized ones by providing valuable data. This trend is evident in acquisitions such as Software AG’s acquisition of Stream Sets and SAP SE’s acquisition of Taulia, which aim to enhance their offerings and expand market presence.
The IoT in the banking market is anticipated to grow significantly, driven by the increasing demand for digital banking services and the need for advanced security measures. It has the potential to provide customers with a more personalized and convenient experience, improve efficiency, and reduce costs, while also enabling real-time tracking of customer behavior and fraud prevention.
