Table of Contents
Introduction
In the past few years, the banking sector has been subjected to multiple marketing changes that have shaped the modern and sophisticated industry that customers enjoy today. However, the most powerful way the banking sector can change itself is through digital transformation, as consumers nowadays are more tech-savvy and demand fast service. Thus, financial institutions have taken advantage of digital models, one of which is the Internet of Things (IoT). This infrastructure allows banks and other financial institutions to obtain valuable information about clients, their preferences, habits, behaviors, and needs.
The Bank of Things (BoT) is a similar infrastructure based on the Internet of Things (IoT) that enables banking sectors to have a frictionless, rich, and personalized interaction with their existing and new customers to contribute to modern financial technology. In this article, we will understand the opportunities, use cases, and application areas of BoT in the banking sector.
1. What is the Bank of Things (BoT)?
Remember how in the 1970s Citibank changed the banking sector by introducing automatic teller machines (ATMs) that gave 24×7 cash access to its customers? This example shows the importance of technology and its role in bringing essential changes to the banking sector; however, in the modern world, we call it IoT in the banking sector, or BoT.
2. Key Opportunities of BoT in Banking Services
The BoT creates a wide spectrum of opportunities for banking sectors as it has become a powerful facilitator of increasing customer loyalty and bringing in more business. Let’s see a few key opportunities for BOT in banking services:
2.1. Real-time Visibility
BoT not only allows an increase in information about clients but also speeds up the information received, adding customer knowledge and interaction with financial entities in real-time.
2.2. Better and Faster Customer Insight
With a customer-centric approach, banks are following the modern age, which provides personalized experiences for their customers. This experience enables creating loyalty toward current customers while managing the influx of new ones
2.3. Biometric Technology
The advances in biometric technology have been significant in the banking sector for the last few years, as sensors, cameras, and other devices have allowed us to identify clients and understand their interactions with the bank. This allows a better design of branches, appropriate positioning of ATMs and other services, and personalized interactions.
3. IoT Applications for Smarter Banking
IoT plays an important role in banking services that eliminates the traditional business processes in banking like KYC, lending, payments, PFM, and insurance, which were done traditionally. After digital transformation, banking was given a new shape that made the services smoother for its employees and customers. Listed below are the top three application areas for smarter banking:
3.1. Smart Branch
BoT solutions for smart branches improve the customer experience by alerting, tracking lines, and pointing them to the correct counter, which helps streamline operations and requires fewer human interventions.
3.2. Trade Finance
BoT allows banks to get engaged in trading and make financial decisions based on real-time data, which ensures visibility of the physical flow of finance. Through this, banks become more effective in managing funds, upscaling strategies, and assessing risks throughout the trading life cycle.
3.3. Accounting and Audit
BoT enables clients’ payment systems and CPA’s software, which ensure quick and secure exchange of data and facilitate an automated routine bookkeeping process. With BoT, finance professionals can track transactions and other financial data in real-time and get accurate knowledge about the bank’s operations.
Conclusion
While introducing customers with attractive options, banks are having a good time taking full advantage of what IoT can offer and eliminating the persisting security concerns. However, this potential will be realized if the system is maintained properly by service providers, device manufacturers, financial institutions, and regulators. In the upcoming articles, we will learn more about the use cases and major applications of the Banking of Things (BoT) in the real world.
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