IoT for FinTech – Applications in Banking and Insurance
IoT for FinTech – Applications in Banking and Insurance
The Internet of Things has left no stones unturned, and the latest to feel the impact of the emerging technology is the Finance industry.
So far, the faster-growing sector has been investing in many futuristic technologies, and they believe investing in IoT can dramatically transform the lives of their workforce, vendors, and customers.
IoT is growing at a breakneck pace, and there is no wonder that almost all industries widely leverage this advanced technology. IoT is an excellent addition to the Finance sector with fantastic use cases across every industry.
Growth of IoT in the Finance industry
The global IoT in BFSI market is expected to grow from USD 249.4 million in 2018 to USD 2,030 million by 2023, at a CAGR of 52.1% during the forecast period. (Source: MarketsandMarkets)
Especially banking and insurance are the two sectors that are hugely benefited by the IoT implementations. Let’s discuss the impact of IoT in the Banking and Insurance sectors in the sections below.
Why IoT for banking
Banks involve lots of data collection, analysis, and decision-making to improve their customer service constantly. Customer retention is a huge challenge for this sector, and the manual processes and partially automated software are not helping the companies to study their customer’s behaviors and serve them better, owing to inaccurate data and analysis.
Growth of IoT in banking
The global internet of things in banking is market size valued at $12.7 billion in 2021, and is projected to reach $237.4 billion by 2031, growing at a CAGR of 33.9% from 2022 to 2031. (Source: Allied Market Research)
So, it is apparent that the applications of IoT in Banking will grow significantly in the future.
With the help of IoT, banking can completely transform the way it works and can offer unparalleled customer service to customers.
IoT applications in banking
1. Data analytics
Since IoT is known for dealing with a huge volume of data, it is a potential add-on for any finance-related industry. As banks deal with many customers, collecting a huge chunk of customer data quickly and efficiently is hassle-free with the help of IoT.
The data is then processed and analyzed using AI to make impactful decisions contributing to rendering personalized services to every customer.
2. Automatic teller machines
The best application of IoT in banking is the Automatic Teller Machine, shortly termed ATM. With the younger generation widely preferring ATMs rather than visiting the branches, the implementation of IoT in ATMs helps banks to offer incredible customer service.
Also, the devices help banks to reduce the number of resources inside the bank and cut down costs significantly.
3. Security enhancements
Think of CCTV cameras and smart alarms; they amass massive customer data. Assessing and collecting such data manually consumes much time. With the help of IoT, garnering the complete data set is seamless.
All the bank staff has to do is connect the security systems with IoT devices. In this way, improving the security infrastructure is never a challenge.
Now it’s time to move to the impact of IoT in the Insurance industry.
4. Why Iot for Insurance
Another industry that deals with a massive volume of customer data is Insurance. The customer-centric industry always looks for advanced technology like IoT to transform operations.
With the IoT implementation, the company can experience hassle-free data collection from multiple sources quickly and efficiently. This helps accelerate the data analysis and processing stages to make quick and impactful decisions.
5. Growth of IoT in Insurance
The global IoT insurance market is expected to be worth USD 42.76 billion by 2022, growing at a CAGR of 65.89% during the forecast period. In this report, 2015 has been considered as the base year and the period between 2016 and 2022 has been considered as the forecast period for the study of the IoT insurance market. (Source: Markets and Markets)
IoT applications in insurance industry
1. Claims processing and management
A huge challenge for most insurers today is claims processing. The process is backbreaking and involves a lot of manual work for the customers and staff. With the implementation of IoT, you can simplify the process remarkably.
By notifying the staff about the accident or casualty instantly and automatically, using IoT will help the users to initiate the claim processing quickly, and the team can inform the process stage soon to the customers. This helps in improving customer service and leads to happy customers.
2. Understanding customer behaviors
Understanding their behavior is a must to offer sensible services to the customers. Without too much data, it is hard for the insurance staff to understand their customers.
But, thanks to IoT, with the help of it, collecting the information is absolutely easy, and combing the technology with AI can make the data processing and analysis part simple as well. With such an approach, studying customer behavior is effortless and leads to better and personalized customer service.
3. Improved cost management
IoT helps insurers optimize risk prediction well in advance to avoid claims, saving a lot of time and money for the company. Also, the IoT devices are available at lower costs, and the insurance company and general users can save quite some money if they implement the smart device for their unique needs.
If your insurance staff have accurate customers’ and behavioral data, it is easy to improve the customer service. Studying the data and providing customized and personalized offers will help insurance companies attract customers and deliver unparalleled customer service.
Yet to join the digital revolution? It’s now or never
From the above discussion, it is evident that IoT has a wide range of applications and uses cases for the Insurance industry. However, many banking and insurance companies still have not leveraged IoT’s power yet.
With every company relying more on smart technologies and tools to improve customer service, it is up to you to decide whether you should adapt to digital solutions.
It’s all about delivering a fantastic service to your customers, and without the help of advanced technologies, it is highly impossible today. Ensure that you make the right choice that helps your business grow faster and beat the competition.
If you are thinking of adding IoT to your banking or insurance company, it’s high time you should partner with a reliable IoT app development service.
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We can help.