IoT in business is primarily concerned with the creation of value through a more connected world – whether that is connecting people, places or things – to build new business models by leveraging data analytics, platforms and ecosystems, transforming customer experiences, and expanding upon insights and efficiencies.
What can IoT offer Banking, Financial Services and Insurance (BFSI)?
IoT feeds data models and enables data-driven insights and decision-making. Great insights are harnessed from overlaying millions of data points, such as overlaying location-based data, transactional data, biometrics and credit card data to enable fraud prevention.
The finance industry regularly embraces new technologies and services to better serve their client base, and a huge boon in recent years has been the omnipresent Internet of Things. A vast network of web-connected devices that collect and share data, the IoT plays a variety of roles throughout finance, banking, and insurance. It simplifies debt collection by monitoring supply chain activity via sensors and networks; it improves fraud protection by employing on-site security systems that sense every network connection and potential connection; it optimises what’s called ‘capacity management’ to enhance customer service in branches. It can even help with indoor navigation and security at bank branches or other institutions. Further to that utility monitoring in buildings has implications for increasing revenue as well as managing insurance risk.
IoT’s effect on BFSI
With IoT-enabled solutions such as the below, BFSI companies can optimise their services and operations, enhance the security of transactions, and offer cutting-edge customer experience.
Improved data security and fraud detection
Most financial companies invest heavily in IoT and big data analytics to improve security and prevent potential fraud. The data gathered from various scenarios are analysed to devise a risk mitigation strategy that secures each customer account. The accounts can then be secured through biometrics to ease payments with additional security. It helps improve the safeguarding process of data and build customer trust. IoT also prevents fraud by detecting unusual behaviour in real time.
IoT technologies can prevent access to customer accounts by hackers and notify customers about a fake login attempt. IoT is able to expand on cybersecurity threat detection by using machine and human data to help with early detection and the prediction of potential threats. This data in turn enables the various institutes to act immediately in case of any suspicious activity and prevent fraudulent transactions before it is too late.
Enhancing security through wearables
IoT is also driven by the need for enhanced cybersecurity: wearable devices enable user authentication via fingerprints, retinal scan, and face ID when customers make payments via mobile apps. Thanks to the integration of banking IoT solutions and wearables, users can make payments without using their credit or debit cards directly. NFC-powered devices, such as smartphones and smartwatches, enable contactless payments for seamless financial transactions.
Wearables are also transforming the health insurance industry in that healthy behaviours can be monitored and rewarded, and bad behaviour and risk can be minimised – think of the financial benefits of driver behaviour watching on vehicle insurance business models.
Real-time data gathering
IoT technology has enabled data collection in real-time, allowing banks to offer their customers additional services and update them with the necessary information, thus helping their intended audience quickly make critical financial decisions. For instance, alerting customers when an unexpectedly high amount of money is spent on a transaction is possible because of IoT. Smart devices installed across a branch can monitor queues, allowing customers to schedule their visits. Inside the bank branch, the data can be used to notify customers about their wait time or redirect them to a free counter.
Intelligent asset monitoring
Banks and financial institutions use IoT-enabled devices to monitor their equipment. They ensure the assets at a branch are used optimally to improve its efficiency and reduce operational overheads (i.e. switching off aircon or lights at night). They can use the data gathered by IoT devices for capacity management. For instance, the data will be helpful to identify a favourable site with maximum footfall for their ATM or branch. Through IoT, financial institutes can record the performance of digital assets and offer information necessary to reduce operating costs and downtime of the branch. In the insurance industry, more visibility of people and things implies decreased risk. Think of the consequential cost of geyser failures, for example, and what impact it can have to monitor geysers and prevent bursts.
Improved customer view and personalised customer experience
IoT solutions collect and process customer data (regular payment locations, consumer preferences, driving behaviour, etc.) that help BFSI businesses learn more about their clients and identify their needs and risks. With detailed and up-to-date customer profiles, BFSI companies can personalise customer interaction, offer targeted services, and provide relevant financial assistance. IoT-powered systems can automatically perform certain operations: process requests, open bank accounts, disable credit cards, etc., thus minimising human intervention and, therefore, human errors.
Partnering with the right provider
The past two decades have seen increased technological innovation across the IoT industry, with more robust and power-efficient hardware being used to create safer IoT networks.
IoT can assist businesses with addressing the ever-growing needs of modern consumers by making their lives easier. IoT applications allow industry leaders to reimagine processes, leading to a transformation of the finance sector. Though the industry deals majorly with intangible assets, IoT involves prominent hardware components.
Businesses leveraging connected devices and IoT networks will have enough data to redesign their operational models. Implementation of IoT technology across the banking network is projected to demonstrate considerable growth for banks and financial institutions.
With co-created and bespoke solutions to suit your needs, Vodacom Business can help you embrace the potential of connected devices to tackle any challenge and bring your organisation into an IoT-led future. From employee engagement platforms to digital buildings and utility monitoring, IoT can unlock significant value for BFSI companies. Vodacom Business has organic inhouse skills, access to extensive Vodafone expertise, enabling partnerships and a proven track record that speaks to deep-rooted skills and competencies. Let’s go further together.
Pavesh Govender is the Managing Executive of Internet of Things (IoT) for Africa at Vodacom Business, the B2B division in Vodacom Group’s portfolio. He has a wealth of experience in the ICT industry that spans 18 years, having previously worked for organisations such as Telkom and BT Global Services. Prior to joining Vodacom in 2016, he served as the Executive Head of the Unified Communications Sales division in Africa for Vodafone Global Enterprise. Pavesh holds an MBA from the Gordon Institute of Business Science and a BCom degree specialising in Informatics from UNISA.
