The ubiquity of today’s high performance Internet makes banking more accessible than ever before. With tech-savvy clients demanding more convenient and individually tuned services, the financial industry is moving increasingly toward IoT technologies to meet these high expectations.
Even though banking and IoT might not be making the headlines, the banking industry is quietly leveraging IoT more and more. Driven by both growing customer expectations and rising levels of online fraud, financial services companies have started prioritizing product and customer monitoring. A key tool in this effort is IoT, which is enabling banks to not only monitor and collect data on its customers’ banking and purchasing transactions, but to also leverage IoT-powered sensors to track assets and better assess the value of collateral.
Banking on IoT
According to TATA Consultancy Services’ report on banking and financial services, 64.5% of global banking executives are monitoring their customers through mobile apps on smartphones, tablets and other digital devices, and 31.6% of banking organizations are using IoT to monitor retail locations such as bank branches and ATMs. In addition, 21.1% of those organizations are using digital sensors to gather product performance data and 15.8% are using IoT-powered wearables to track customers’ product usage.
The TATA report found that financial institutions reported an average IoT budget of $117.4 million, which is 0.4% of the revenue. Its study revealed that companies are planning to spend $153.5 million by 2018, with a large amount of their IoT budget (32% in 2015 and 29% by 2020) going toward monitoring financial products and services. They noted that companies also planned to allocate 30% of their IoT budget to monitor customers, an allocation expected to increase to 34% by 2020.
Thanks to IoT advancements, financial service companies are expanding their customers’ payment options beyond credit and debit cards, smart phones and other existing POS devices to a broader, more diverse ecosystem of Internet-connected devices.
So, how can you help them do this?
Building an IoT ecosystem can be challenging—constantly evolving business environments within the digital and transitioning-to-digital world require complex solution architectures. Fortunately, having an IoT-knowledgeable partner can make it a lot easier.
Intel has a long history of engaging with software providers, cloud service providers and the members of the technology ecosystem that deliver solutions to the financial services industry. These players, included FIS, Infosys, Misys, TCS and Temenos, all take advantage of Intel technologies for compute, memory, storage and networking, for strong computing performance, scalability and reliability as well as distributed computing environments.
Intel® Solid State Drives (Intel SSD) for embedded provide for complex and real-time analytics operation, while Intel networking products support cloud-ready, open standards environments that support fast, connected business and innovation.
Cloud Services Providers (CSPs) such as Azure, Amazon Web Services, Google and HP Helion are all based on Intel. Intel works closely with CSPs to enable the deployment of the latest Intel® technology for processing, memory and networking fabric within their service offerings. It also supports advanced Big Data management and analytics on Hadoop through its collaboration with Cloudera.
Banking solutions based on Intel can take advantage of that technology, whether on-premise in the bank’s data center, off-premise in a cloud or in a hybrid cloud model. And, by running on Intel, the migration from on-premise to off-premise becomes a more seamless and secure operation.
The Intel® IoT Platform includes an end-to-end reference architecture model and family of products from Intel and its ecosystem that work with third-party solutions to provide banks with a solid foundation for seamlessly and securely connecting devices, delivering trusted data to the cloud and delivering value through analytics.
Now is the Time to Act
Banks are under pressure to continue to innovate when it comes to their payment systems, with that pressure largely coming from:
- Demand from customers for instant gratification and secure service at the speed of light
- The need to support eCommerce models that can’t work without instant payment
- A goods supply chain that is accelerating, something the finance supply chain has to catch up to
- Competitive threats from other banks and disintermediators
Banks have to act—and soon. If they don’t have IoT transformation projects underway already, now is the time to start these conversations with them.