Hello, welcome to our blog post on Wearables and IoT technology in fintech.
Since the invention of the IoT, there has been rapid growth in different industries and this includes the fintech industry.
There are so many benefits to the adoption and integration of IoT technology in business. it revolutionises a lot of processes and improves customer experience and productivity.
Discover the IOT IN BANKING AND FINTECH: BENEFITS, EXAMPLES, AND CASES
Wearables and IoT technology in fintech take everything a step forward, among other amazing things, they help businesses in understanding user preferences.
IoT also helps fintech businesses in the general delivery of their services as well as providing a wonderful user experience.
Understanding How IoT and Wearables Work for Fintech
When it comes to wearables and IoT devices, there is so much that businesses can achieve. We already discussed IoT for smart homes and cities in one of our previous blogs.
Looking at how IoT transforms cities, processes, warehousing, transportation and many other industries, one will agree that the technology is worth investing in.
Wearables and IoT technology in fintech help improve employee inputs and enhance the offering of user-centric services. Also, the technologies are very useful in overcoming business challenges that are critical for success.
Opportunities Created by Wearables and IoT Technology in Fintech
Wearable devices and IoT technologies are trending in the tech industry. These popular innovations offer transformative capabilities in the fintech industry. For example, in the banking sector, IoT and wearables are boosting employee input and competence.
This allows employees to deliver valuable services. Also, the technologies have proven to be very useful in serving as solutions to important business challenges.
Let us look at the opportunities that wearables and IoT technology in fintech are creating.
Wearables and IoT for Data Gathering
Wearables and IoT technology in fintech are making data accessible as well as making them useful.
Over time, they have proven to offer great insights to businesses including fintechs. With wearables and IoT, Fintechs have reliable tools that offer insights into customer data and behaviours which they can use in offering customer-centric services that are both smooth and safe.
Wearables and IoT for Personalised Services
Wearables and IoT technology in fintech play important roles in designing and offering effective personalised services. This means that fintechs can benefit from the technologies by using the tools to understand and meet their user expectations.
Also, banking institutions can adopt these tools for optimising their banking interactions and accurately predicting different important user-focused behaviours and other data in real time.
Wearables for wearable Payments
The role of IoT devices in financial technology extends to offering innovative solutions for easy interactions, including the possibility of wearable payments. Inverita says that the technologies are opening up many opportunities for FinTech companies to offer wearable payments.
This can be, most commonly, through debit/credit cards. The tech contributors further claim that we should expect some exciting developments because of “wearable technology and Fintech operations in the coming years.”
They also point out the role of wearables and IoT technology in fintech for enhancing contactless payments. This is of course in tandem with customers and fintech companies needing contactless payment options.
With Wearables and IoT technology, fintech companies are exploring ways of using simple gestures to make payments. This may be just tapping their smart bands or watches to make transactions.
Here is what Inverita says about wearable payments; “In many parts of the world, wearable payment has become a popular mobile payment method. Examples of Fintech companies testing out this type of payment include the Netherlands’s ABN AMRO Bank and Australia’s Bankwest”
Wearables and IoT for Business Breakthroughs
You already read it from here, that fintech wearables for customer engagement are just amazing. They transform the customer experience. This means that the technologies help fintechs in staying competitive and transcend business boundaries.
Also, wearables and IoT technology in fintech enable the creation of useful services that offer seamless customer experience. Typical examples in this case are smartwatch ATM withdrawals, biometric authentication and others.
Wearables and IoT Technology in Fintech for Risk Assessments
There is no easier way to say this; the role of IoT devices in financial technology involves the enhancement of risk assessment. In the IoT landscape, millions of devices are created and pushed into the market on a daily basis.
All these devices deal with millions, if not, billions of data. All of these help the technologies and fintechs to do effective risk assessments. For example, in the areas of loans, they play crucial roles in the verification and validation of data. Also in KYC verification, they play leading roles.
Wearables and IoT Technology in Fintech for Financial and Insurance Services
Fintech wearables and IoT do not only work for KYC and risk assessments, they are also useful insurance.
They have a way of enhancing the decision-making process of insurance services. They are effective because they can offer detailed information about a user and financial records. This may include different spending behaviours and other banking activities including risky behaviours.
While there are so many things that wearables and IoT technology in fintech can do, it is important to keep up with different approaches for the best results. The fact that fintechs can use these technologies to create personalised services, as well as study user behaviours is amazing. It is also amazing that technologies are transforming payment systems and insurance.
There is a massive market already in IoT, and that of wearables is fast growing. The adoption of these two technologies in the fintech industry can drive transformative change for good.
What are the Benefits of Wearables and IoT in Fintech?
Generally, there are several benefits of wearables and IoT in fintech. They play huge roles in data collection from different sources which helps in the following ways; better decision-making, enhanced communication, and automation.
Let us explore some benefits of using wearables and IoT in fintechs.
Wearables and IoT Technology in Fintech for Faster Decision-Making
When it comes to decision-making, many businesses are better off using quality data for informed decisions.
These include making decisions in areas of investments, user behaviours and even in conducting market research. Wearables and IoT technology in fintech can lead these processes and produce the best results.
According to highradius, “Businesses can use IoT devices to collect and analyse clients’ data to gain valuable insights into their needs and ensure faster decision-making. IoT becomes even more powerful when combined with advanced technologies.” These advanced technologies may include AI and wearables with several use cases in finance. The combination of these technologies can drive faster and better decision-making.
Wearables and IoT technology in fintech for better communication
Another important benefit of wearables and IoT in fintech is in streamlining and enhancing communication.
This also includes improving collaborations among teams. For example, fintech businesses adopt and implement fintech wearables and IoT technologies for improving communication and collaboration among different departments in a company.
Both technologies, when combined can perform wonders through automation. They can be used to collect useful information and update them to the cloud in real-time. Other benefits of wearables and IoT in fintech include time-saving and resource management.
Automation in Wearables and IoT technology in fintech
The combination of both technologies in the fintech industry and how they perform has a lot to do with automation. In fact, it is automation that activates certain features and functions which makes the technologies more enticing and promising for the fintech industry.
For example, IoT and wearables can automatically monitor different operation processes and productivity processes too. They can automatically collect and analyse important data from users and use them to generate useful insights.
Also, automation allows wearables and IoT technology in fintech to track employee and business performances in real-time.
Fintech Wearables for Customer Engagement
There is an important need in the banking and finance industry and this need borders on customer engagement and satisfaction. Currently, many traditional banking systems are finding it hard to meet customer rising demands.
According to Centric Digital, the inability to meet customer needs is making “one-third of younger customers consider leaving their current financial service providers.” The blog proposes a viable solution to this problem, saying; “to maintain customer satisfaction and loyalty, firms will have to integrate wearable technology into their standard services.
How Does Adopting Fintech Wearables for Customer Engagement Play Out?
Wearables and IoT technology in fintech play essential roles in driving customer engagement for customer satisfaction. These technologies, through their roles in collecting and leveraging big data in more effective ways, have the power to revolutionise customer engagements in many ways.
For example, one of the roles of wearables and IoT technology in fintech includes collecting user location in real-time. The technologies also collect useful data on their activities as well as their biometrics for authentication and security reasons.
All these data, when properly analysed, offer useful insights for fintech companies in designing and implementing customer-engaging offerings to customers. In the voice of Centric Digital, “These can take the form of highly relevant account alerts and offers, as well as contextual services.” A good example to explain this is the importance of wearables. Fintech wearables are useful for measuring different behaviours. These may include, but are not limited to, “time of day customers tend to spend money and where they spend it.”
What Else Can Be Achieved with Fintech Wearables for Customer Engagement?
Also in driving customer engagement, organisations in the fintech industry can do more. For example, they can integrate wearables and IoT to form critical parts of their marketing strategies.
In fact, these tools can be pivotal in implementing their marketing plans, serving as leading marketing tools. This is a wise thing to do because the tools deal with millions of user data and can offer very useful, well-analysed insight.
We believe so because when you implement fintech wearables for customer engagement, you will be harnessing data insights from user activities, user preferences, different marketing options and trends.
Furthermore, wearable devices in fintech are important and very effective for collecting data on user buying behaviours; especially how they shop when in stores. The devices may also gather insights into users’ most preferred payment methods and checkout systems.
All this information can be used to design and implement customer-engaging services for more satisfaction.
Wearables and IoT Technology in Fintech for Developing Better Policies and Services
Discussing how fintech wearables for customer engagement can (re)shape the design and implementation of policies and services, Centric Digital claims; “There are even specific benefits for different sectors within the financial industry. Insurance companies, for instance, can collect accurate data about a customer’s activity level, weight, blood pressure, location and other health- and lifestyle-related information, allowing them to develop more personalized, comprehensive policies and services”.
Therefore, in terms of personalising services to meet customer demands, wearables and IoT technology in fintech play critical roles. They offer optimal insights on how different services can be improved as well as help in designing and implementing policies for customer satisfaction.
Security In Fintech with Wearable and IoT: What are the Challenges?
Everything we have so far been discussing in this blog can pass as how wonderful these technologies can be. However, let us be quick to tell you that, in several cases, they bring up issues of security.
This is most common with (financial) data. Imagine the aspect of wearable devices for facilitating contactless payments. The technology allows users to just wave their wrists and payment is made. This can lead to easy compromises as anyone can get hold of your wearables and use them in the same manner.
Wearables and IoT technology in fintech can be lost or stolen at any time. If the user is unfortunate, the technology can fall into the hands of hackers who will steal their data and money. They may also lead to identity theft from the compromise of personal data.
But there is good news for the security of these growing technologies. The issue of security in fintech with wearable and IoT technologies is witnessing strong and effective improvement in different dimensions.
The use of Advanced Security in Wearables and IoT Technology in Fintech
Many innovations are coming up to close the gaps that make them vulnerable to attacks and theft. For example, the use of GPS technology and biometrics have proven useful in tight in up some security gaps.
We can also talk about the use of two-factor authentication for advanced security.
These security innovations and many more are making it more difficult for hackers and malicious people to gain access to wearables and IoT technologies. For example, biometrics security has improved with the use of personal-based identifiers like the customers’ fingerprint, voice, heart rate and other individual signatures. These tighten up security on authorised access.
Therefore, they make it very difficult for just any random person to get hold of the devices and make unauthorised payments. The improvement of security in wearables and IoT technology in fintech offers customers the option of having strong passwords, PINS and signatures. Without this, no one can gain access.
The use of Data Encryption for Security in Fintech with Wearable and IoT
Recently, there have been a lot of changes in the methods of data encryption in IoT and wearable technologies in the fintech industry. For example, crypto companies like FIDO Alliance are doing a great job.
The company develops and offers advanced authentication processes. The processes include the use of security options like voice and fingerprint verification methods. They also design these password-less security options in a way that the users are protected from hackers or phishing activities.
Third-Party Authentication Tools for Security in Fintech with Wearable and IoT
Let us wrap this section up with how wearables and IoT in fintech are boosting security by integrating third-party authentication methods. The most common of these is the Google Authenticator app.
With this app, users of the devices use a third-party app to generate login security keys. These apps are set up with wearable and IoT devices to enable the third-party app to generate different security codes every now and then. This means the codes expire and one code cannot be used twice or more.
Our Conclusion
The innovation of wearables and IoT technology in fintech is still evolving and more and more developments will kick in. But importantly, financial organisations need to start considering keying into these innovations to meet the needs of their customers. They also need to keep up with different trends so as to stay relevant and competitive in the financial industry.
As experts in the software development industry and having worked with numerous fintech companies around the world, we are very certain that; wearables and IoT technologies will play huge roles in transforming the financial industry and the fintech branch has a lot to gain from this innovation.
It is important to know that, there is a bright future for fintech companies who properly invest and harness the full potential of wearables and IoT technology in fintech.
