Reshaping Finance through Internet of Things (IoT)

The rapid development of fintech is reshaping the financial industry nowadays. One of the most significant fintech revolutions of this century is the internet of things (IoT) - a network of interconnected devices intended to automate processes and make better decisions in real-time data collection and exchange.

The market size of IoT in banking and financial services was about $800 mln in 2021 and is expected to reach $30,925 mln by 2030 growing at a CAGR of 50.1% from 2023 to 2030.

For successful IoT implementation, robust data management infrastructure and cybersecurity protocols are essential. The main advantages of using IoTs in financial sector are the followings:

1. Automation – Through IoT system certain tasks, such as processing requests, initiating bank account setups, and deactivating credit cards, can be carried out automatically. This reduces the reliance on human intervention, leading to a reduction in potential human errors.
2. Enhanced security – IoT facilitates the connection and remote management of surveillance tools like CCTV cameras and smart alarms. This guarantees 24/7 protection for properties, equipment and assets like offices, ATMs, CIT vehicles. If any suspicious activity occurs, alerts can be sent for a prompt response.
3. Fraud detection and prevention – With the help of AI-powered analytics, IoT easily detect fraud and hacking. In case of anything suspicious, the user will be notified immediately and their account will be temporarily blocked.
4. Smart payments – IoT in the context of smart payments creates a paradigm shift that promotes a more technologically advanced and interconnected payment ecosystem. Devices like smartphones, smartwatches, and other wearables equipped with NFC technology enable users to make contactless payments with ease.
5. Personalized and customer-centric services – The synergy of AI and IoT has transformed customer support by giving real-time updates, improving services through data-driven insights, creating a more responsive and personalized customer experience. Financial institutions can customize their services and offers to each customer's unique needs by using IoT sensors to track customer behavior and preferences.
6. Improved risk management – Through the utilization of IoT devices and sensors, companies can constantly observe and gather data on a range of risk factors such as market conditions, asset performance, and environmental factors. This information is then analyzed to identify potential risks, assess their impact, and identify strategies for risk mitigation.
7. Smart asset management – IoT aids in tracking and managing financial assets in real-time, minimizing losses and optimizing asset utilization by mitigating the risk of downtime and maintenance expenses.

Overall, the integration of IoT in the financial domain represents a pivotal shift towards enhanced efficiency, security, and customer-centricity. From real-time data analytics and personalized services to risk management and fraud prevention, IoT technologies offer a spectrum of advantages that redefine traditional financial practices. The continuous monitoring and collection of data across various factors, coupled with smart asset management capabilities, empower financial institutions to make well-informed decisions, reduce operational costs, and provide a seamless and secure experience for their clients. As the financial industry continues to embrace the potential of IoT, its transformative impact is set to reshape the future of finance, ushering in an era of innovation, adaptability, and unparalleled connectivity.

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