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Business owners and consumers use Fintech in managing their financial operations and overall process by utilizing specialized software and algorithms. Wearables (Wear OS) are prevalent across sports enthusiasts in general, to keep up with their general well-being. It reminds you to pay your bills, never miss premium, check your account balance, transfer instant amounts and never baffle with your daily-essential needs.
Terms: What is IoT, wearable, Fintech?
- IoT – The Internet of things connects everything: people, devices, clothes and much more.
- Fintech – Fintech is an abbreviation for financial technology.
- Wearables – The mobile gadgets that improve productivity in daily processes.
Offerings: Leveraging the Internet of Things and Wearables
Differentiated Offerings
- Enhanced branch experience (i.e. location-based digital concierge)
- Wearable Payments and Identity
- Authentication (i.e. Disney Magic Band)
Contextualized Finance
- Loan approval push message upon entering a retail location
- Overspending alerts upon entering a shopping mall
Risk Assessment and Profiling
- Vehicle risk profiling based on driving behaviour (Auto Insurance)
- Personal health monitoring using fitness data and risk profiling (Health Insurance)
Product Monitoring
- Inventory monitoring for invoice financing
- Equipment health monitoring and pro-active alerts
Key Enablers: How IoT and Wearables in Fintech help?
Financial institutions need to prepare more wallet share as this network of things will create new transactions, data sources and revenue streams. IoT helps:
- To increase efficiency
- Handle information
- Reduce cost
- Improve accuracy
- For efficient customer service
- To decrease the cost of hardware/sensors
- For ubiquitous wireless coverage and big data
- To assist in smartphone penetration
- For shifting consumer lifestyle
- To secure customer data
- To enable the evolution of data storage and processing frameworks
Cause and Effect: How does Fintech affect the banking industry?
IoT offers smart-solutions for homes and offices –
smart-watches, smart speakers, smart TVs, smart ovens, smart-pressure cookers, smart-alarm systems. Crawling towards Fintech IoT improves customer service, safety and security, smart-repayments, smart-internal procedures and other facilities.
The finance industry deals with the transfer, gathering and analyzing enormous data for credit risk assessment. Advanced technologies drive IoT like D2D (device-to-device) communication protocols and sensor implementation. Let’s find out where it affects more:
Swift Customer Service:
Customers seek swift customer service while dealing with banking transactions. Any signs of delay can be a total turn off which might divert the customers towards their competitors.
It Makes Customers Navigate Indoors:
IoT-enabled sensors like proximity-based systems, WiFi-based systems, ultra wide-band systems, acoustic systems, infrared systems. Users browse and navigate their way through the destination within the building premises. It is easy to use, cost-effective, highly secure, easily scaled, easily deployed and saves a lot of time. Types of indoor positioning systems include Proximity-based Systems, WiFi-based Systems, Ultra Wide-Band (UWB) Systems, Acoustic Systems and Infrared (IR) Systems.
IoT for Customer Data:
IoT helps collect data from the customer network, uses advanced analytics to uncover business insights and opportunities, reduces operational cost. It involves selecting a sample of data about your top customers and the processes that support those customers.
Online Ticketing/Line management:
It helps avoid queues as appropriate IoT devices installed within banking premises guide customers to input their problems into original equipment. The banking system issues a ticket with agent information that they must see and their number in the line. The device notifies them when it’s their turn.
Secure and Quick Payments:
Increasing usage of smartphones and wearable devices to initiate P2P cashless payments are replacing traditional credit cards and cash withdrawals. This tech is proving to be safe in making cordless settlements.
Boosting Business Efficiency via Automation:
Finance firms use procedure automation to enhance customer service and streamline day-to-day features. It involves making use of smartphones to open doors of ATMs during off-hours instead of using vital cards.
Self-Checkout Services:
IoT Fintech startups can use smart-gadgets to enable wireless self-checkout services. Amazon Go chain of superstores allows users to come-shop-go without having to wait in queues to make payments. Payments auto-deduct from Amazon pay wallets/bank accounts linked with Amazon.
IoT in FinTech Business Applications: IoT in business Use Cases
Biometrics – voice or touch:
To access accounts through digital channels
Wet-Ink technology: It involves signing in through touch screen devices. It eliminates the barriers associated with in-person, paper-based transactions.
Leasing Finance Automation:
New daily leasing models involve metrics like real-time monitoring, asset usage, idle time, pricing of leased assets. Digital assets turn traditional products into services. However, these terms are subject to change basis the bank’s control of leased assets.
Smart Collaterals:
IoT in finance is potent enough to control a customer’s mortgaged assets. In such cases, a retail or SME customer could raise short-term finance by offering manufacturing machines like cars or expensive home appliances as collateral. The request for financing and transfer of ownership could be automatic and completely digital. Banks immediately issue loans and monitor collateral status in real-time.
Automated Payment:
Integrating IoT and payment functionality lead to several payment endpoints.
Risk Mitigation in Trade Finance:
It involves tracking high-value goods delivery using RFID. IoT accelerates this to include fine-grained tracking of assets, monitoring temperature for shipments involving temperature-sensitive goods such as pharmaceuticals. IoT-enabled systems trigger alerts in the chance of spoilage during the shipment process. It results in risk mitigation and making informed decisions.
Wallet of Things:
It is an extension of automated payments through things when more devices become digital and “smart” (Possibility to have wallets for every device)
Contextualized PFM:
PFM tools offer specific notifications by accessing IoT data from the customer’s owned devices.
Tailor-Made Auto Insurance:
Insurance Companies backed with finance from bank offer plug into the on-board diagnostic port of cars and send driving behaviour data back to it.
Real-time Life Insurance:
Connected programmable products and services can generate customer-specific data to create a digital counterpart.
IoT enabled Smart Payment Contracts: Smart contracts, digital identity coupled with IoT to make partial payments, fully self-executing and self-enforcing to enforce the negotiation or performance.
P2P Finance on Tangible Assets:
IoT extends the P2P model to new areas, impacting traditional financial services products such as leasing.
Conclusive:
The IoT device manufacturers have overlaid your worst fears and converted them into everyday convenience. It might cost a bit, but it bumps off that itch and gets you straight with your transactions. Alright, we hope it helps. Contact with fintech app development company if you want to create a Fintech web app/android app/iOS app to boost your Fintech business!