5 Ways IoT Changes Financial Tech
As of today, the possibilities are endless, when it comes to taking digital banking to a new level. And one of the ways to make this new level possible is through the use of IoT devices.
With more and more people wearing IoT devices that tell them more than just the weather and time, and with more advances on the way, banking and financial services may be next in line for the IoT-wearable treatment. Thus, the term “financial technology” (or “fintech” for short) applies here, and it can help people manage their money at their convenience, instead of setting aside time to go to a physical branch.
Here are five ways that fintech is improving accepting and making payments as well know it.
Wearable Payment Devices
“Wearable devices are already a thing in today’s world,” says Austin Behan, a business writer at Big assignments and Essay roo. “You’ll see people using devices like the Apple Watch to order food or pay bills. And the market for such wearable devices are expected to grow up to $11.21 billion by 2026.”
But what about banks? Are they taking advantage of this growing market?
“While currently, a few banks have considered being available to wearable IoT user, most of them have already started offering smartwatch apps that let these types of customers use their wearables as a primary payment device,” adds Behan. “As wearable IoT devices continue to expand, and more and more banks are making the move to embrace this change, it’ll soon be easier to make payments without having to stop at a bank or ATM.”
The truth is, banks are leading the charge when it comes to utilizing IoT devices. In many cases, banks are actually altering their strategies to give preference to customers who are using IoT devices like smartwatches, which has been backed up by rising technologies including Apple Pay, Google Pay, and other NFC payment platforms.
Protection from Fraud
Although there have been known security risks with IoT devices, they can still protect consumers from fraudulent activity. IoT devices are equipped with AI systems that gather data on financial transactions to create a better profile of customer spending habits.
If a cybercriminal tries stealing a customer’s financial information to make a purchase, but the device that customer makes more than half of their purchases from is completely elsewhere and not involved in a financial transaction, the bank can easily block the fraudulent purchase from going through. IoTs also have multifactor authentication, so that in this case, accessing a debit or credit card would be harder than just knowing one passcode.
This is becoming tenfold with the use of biometric technology, such as fingerprint scanners built directly into mobile devices. Some developers are even taking it as far as analyzing the heartbeat and pulse of their users as a sign of biometric authenticity. The developer leading this front is Nymi.
When you further add blockchain technology into this cocktail of tech, you’ll left with a very secure service that offers users a vast range of security options, to any degree they wish to protect themselves at, and a ton of opportunities for new ventures, such as smart signing (signatures) and smart contracts.
As of writing, around $1.7 billion is spent of developing, researching, and integrating this kind of technology, but it’s worth remembering that this is still an evolving kind of frontier, and it will be very exciting to see where it goes in the future.
Pay On The Go
When it comes to IoT wearables, it can be easy for people to make and accept payments virtually almost everywhere. Here are some examples of how IoTs can let you pay on the go:
- Cars will use their existing in-vehicle infotainment (IVI) systems incorporated into most modern vehicles to pay for things like tolls, parking spaces, and gas.
- Voice-activated household speaker devices like Amazon Alexa and Google Home already allow people to purchase items
- Soon, smart appliances will make it possible to make food ordering and delivery easier.
Just like with introduction of credit and debit cards, these advancements with payment platforms that make it easier and more secure than ever before to make transactions, increasingly of any size, means people are going to be spending more. At least, this is what many experts believe.
While this will be true in many cases, with the introduction of easier access to banking apps and services, as well as the rise of third-party fintech apps that help people manage their spending, will consumers be spending more, or taking more control of their financial situations?
Smart Banks and ATMs
Smart banks will soon be able to deliver convenient services to customers.
Say, for example, a customer goes into a branch location. Just then, their fintech device could alert them and tell them their account information for a more fast and personalized service.
Also, banks and institutions can use the demand for such services to strategically place their branches and ATMs for better convenience, and customers can either withdraw money and or make payments with ease.
With an ever-changing world, ATMs will be increasingly start to support cryptocurrency payouts and transactions, as well as making global payments across international borders. This is very important as the world becomes increasingly connected.
Seeing Your Spending Better
“While bank statements – paper and digital – have always made it possible for customers to track their spending,” says Cooper Mitford, a project manager at Paper fellows and Australian help, “those kinds of statements are starting to lose their helpfulness, which is something that most people don’t have time to struggle with nowadays. People want their information straight up.”
So, where do IoT devices come in?
“With IoT devices, customers are told of their spending habits – what their spending patterns look like over time and convince them to do away with certain spending habits,” adds Mitford. “A regular bank statement may not tell you how, when, and where they’re spending money.”
We spoke about this above, and it will be interesting to see how banks and fintech services will respond to this growing need to manage money properly. Sure, there are plenty of services out there that are offering financial money managing platforms, and there’s no denying that the majority of consumers understand the general debt situation of the world, as well as their own individual circumstances, but will banking institutes implement their own solutions?
Although banks and institution have yet to be 100% IoT-wearable-friendly, it seems that they’re still open to the idea of making life more convenient for their customers. IoT fintech will soon help customers to take more control over how they manage and use their money, thus transforming the way people do business with banks and financial institutions in the process.