Using IoT Data To Drive Personalized Financial Services
According to a recent report by Zion Market Research, the total value of the data that originates from the Internet of Things (IoT) in financial services will be worth over US $2,547M by 2024, with a CAGR of 48.6 percent between 2018 and 2024. With this explosion of data availability, financial services providers—including both traditional banks and FinTech startups—are recognizing the potential to use data-driven insights to better understand customers so FinTech startups can provide more targeted and accurate financial solutions. Sensors from IoT, for example, can be contextualized and used to provide tremendous analytics and operational—and ultimately customer—value.
The growth of multiple interactive interfaces has meant that customers expect to do their banking instantly and anywhere using multiple platforms. But for banks to be able to provide a seamless customer experience, not only do they need access to data, they also need to know what data needs leveraging.
Connecting to devices, ingesting, and storing sensor data is not easy, and is only the tip of the iceberg when it comes to collecting insights. The ultimate goal of gathering this vast amount of data is to extract actionable insights to allow the customer and the financial services provider to achieve results.
Improved quality and cost saving
Higher quality insights can lead to identification of superior design features in new products and services. It can also allow financial services providers to quickly and accurately rectify any design flaws early on. Using IoT data, Commerzbank has recently developed a prototype for an innovative business lending model, 'pay-per-use' loan, to adjust repayment terms according to the actual usage of the products on which the loan was taken out.
Improved banking experience
The advantage of gaining insights from IoT data in financial services is significant—insights are almost always delivered in real-time. This gives banks an excellent opportunity to respond more quickly to issues, and help customers optimize usage of products and services. Standard Chartered is working with Huawei to develop IoT sensors that would automatically send payments to customers upon receipt of real-time data.
Extracting insights from IoT data is essentially a big data analytics challenge for financial services—especially for traditional banks with legacy systems and compliance issues. The challenge is having quick access to cutting-edge technology and expert human resources that can help to analyze large amounts of complex data from different sources and in different formats.
Banks looking to successfully implement an IoT data-driven solution need to visualize and analyze data once it has been collected and stored. But how can banks, along with the wider financial sector, quickly turn that complex data into information that is simple-to-understand and use?
Take a look at our whitepaper to learn more, “True Personalization through Data-Driven Insights.”