The Internet of Things (IoT) has made a significant impact on the global economy in 2016. The growing number of connected digital devices – wearables, smartphones, appliances and computing devices which can communicate with each other besides outside entities at any given time have changed the lives of people.
According to a forecast by Gartner (technology advisory firm based in the US), there would be around 25 billion such connected devices globally by 2020. The impact of IoT would be greater than any previous digital revolution in corporate, banking and financial services.
Spearheaded by the availability of an extraordinary level of data, these sectors can create data-driven customer insight, connect information and act on it, in a way that was not possible before.
At present, the connected customers are fuelling IoT innovation in corporate, banking and financial services.
The use of IoT-enabled technology enables banks to deliver an exceptional customer experience, which is the driving force behind the current progress in new payment technologies.
However, there are concurrent concerns that the huge quantity of data related with IoT would increase issues around confidentiality, identity authentication and security, especially around data management and data security.
Several users are using technologies like Apple Pay through an iPhone or Apple Watch, while some market players like Google, Samsung and different OEMs are deploying secure online payment strategies and installing payment functionalities in wearables.
Banks and vendors using real-time geolocation technologies to detect where and when they might be able to provide incentives to their clients must also be considered. Biometric data (fingerprints, iris scans among others) is providing banks new methods to validate clients.
Providing this kind of data needs a certain level of trust from users. Without this, IoT would not be able to reach its complete potential and users would not feel comfortable linking devices with bank accounts.
If handled properly, IoT has the potential to become a game changer for financial services firms. They could offer instinctive services to customers, across the devices and places. However, they must tackle the security challenge and increase customer trust, while improving overall network infrastructure.
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