The Internet of Things (IoT) has transformed business and marketing as we know it. The finance industry is no exception. In fact, IoT in banking and financial services is expected to grow at a CAGR of 55.3% between 2019 and 2027.
But IoT is already having an impact on the industry. Here’s how:
With More Data, Consumers Can Make Better Decisions
With many consumers having multiple bank accounts, credit cards and investments, managing personal finances can be challenging. It’s difficult to keep track of accounts with multiple institutions.
Personal finance apps can help consumers keep track of their finances in one central location and with the touch of a button.
Modern personal finance apps can take care of all our financial dealings with a single click. The results are displayed in a beautiful easy-to-understand format.
But even these apps are limited. IoT may change that.
Today, we’re surrounded by devices that contain sensors which collect massive amounts of objective data about our daily lives. The data collected from IoT devices can be combined with other technologies, like deep learning, machine learning and artificial intelligence. When combined, it may lead to data-driven decision-making.
Sensors in vehicles and even smartphone apps can provide insurance companies with information on the vehicle’s driving history, which gives insight into the driver’s performance.
Better Loan Risk Management
Data can help banks provide better personal loans that meet the needs of borrowers. IoT applications can offer improve credit underwriting, particularly in underserved areas such as those lacking credit.
The data provided through IoT technology could help banks offer more tailored solutions to their customers. For example, lenders could partner with certain manufacturers to offer loans to consumers with appliances or devices that are malfunctioning. The right data can help lenders and banks anticipate the needs of their customers.
The right data sets can predict a consumer’s creditworthiness, and it can also help lenders avoid high-risk borrowers.
Improved Customer Experience
IoT allows banks and other financial institutions to offer a better customer experience. Personalization is the future of marketing, and IoT provides the data the finance world needs to offer friendly greetings as well as product offers based on past purchases and activities.
Customers expect companies to know and understand them. IoT data coupled with machine learning and artificial intelligence can help lenders and banks provide a more personalized, improved customer experience.
As mentioned previously, IoT data can also help banks and lenders anticipate the needs of their customers. Offering personalized offers and products tailored to their needs shows that lenders value their customers and their needs.
IoT will continue to transform many industries, including the finance industry. Data allows banks and lenders to better serve their customers, and customers also enjoy better product offerings. With more data, customers can make smarter decisions. Banks can provide a better customer experience, and they can also improve their loan risk management.