Financial services slowly swings towards connected things
The tale of the rabbit and tortoise is known to everyone because it has been told many a time. If we draw an analogy in the business world, financial services (FS) would be the tortoise when it comes to adopting digital technology when compared to other industries.
As with most digital technologies, FS has been slow to embrace the Internet of Things (IoT) whereas other industries have taken to it as a duck takes to water and appropriated a space for themselves in the IoT world.
IoT is simply real-time communication and sharing of information between devices connected to the Internet. Though the definition is simple, the impact that it carries is profound because the information thus collected would be used to predict needs, solve problems, and boost efficiency with the use of big data, analytics, predictive modeling, and artificial intelligence (AI). Some examples are Apple Watch, Google glass, and Nike+.
Though the FS industry has been slow to move towards IoT, the emergence of technologies such as wearable and sensors have the industry's interest piqued. So much so, that FS is one of the top ten industries investing in sensors for devices.
Apple Pay is one of the most quoted examples of IoT in FS. Another example is telematics, which is used to communicate information about the location of a vehicle, crash notification, and such other vital information to the driver, insurer, and the concerned authorities.
The entire ecosystem, which is being created by these objects with sensors, is bringing in a fundamental change in the way financial institutions interact with customers. With the use of technologies such as big data, artificial intelligence, and analytics, these institutions are beginning to get more personalized data about their customers, which in turn, help them tailor and offer their products and services in a more personalized form to the customer.
Ads, webpages, and product recommendation based on customer data bring convenience, which in turn create better customer experiences. With smooth transactions and continuous customer engagements at many touch-points, the business model and revenues are likely to see a more positive impact. That said, the moment one hops on to an inter-connected digital world, the hounds from hell come chasing to target security and privacy loopholes. This gives cybersecurity a whole new dimension for all the stakeholders involved in this world of IoT. With digital vulnerabilities expanding exponentially, the challenge of keeping the space safe is going to keep all concerned on their toes. The financial industry, already under severe attack would have to be doubly cautious and more prepared to ward off this challenge.
So should the rabbit of our story win? Perhaps continuing slowly and surviving is a better option than getting into a mindless race where survival itself becomes doubtful. Out running is not a choice for our slow friend, he can use the tracks left by his faster partner to be more prepared of the possible way-lays that may lie to hunt him. So slow and steady may not win the race but certainly, survive for another race.