Banks and fintech businesses are now building up a reputation of digital leaders and want to differentiate from their competitors harnessing the benefits of IoT and wearable technology. McKinsey estimates that the economic impact of IoT will be around $11 trillion dollars by 2025. So, how to use wearable technology to boost your business?
IoT and wearable technology can help businesses streamline their operations and reach a better level of security. Wearable market is getting fueled with new all-in-one intuitive devices from Google, Cisco, IBM, Amazon – companies dominating the IoT development in the world. Let’s have a look at some examples of widely popular IoT technology devices:
- Google home voice controller to adjust lights, TV, music and alarms to your preferences
- Intelligent door locks
- August Doorbell Cam allows you to answer door calls from where you are located. It has motion alerts and notifies owners if something is happening in front of their home.
- Amazon smart thermostats
The list of IoT devices can be extended with temperature regulation systems, other types of smart doorbells or air conditioning controllers. Basically, IoT devices are designed for convenience at homes and enhancing security. Home automation is great, but IoT technology does not stop here and offers its benefits for Fintech businesses. Wearables in banking can be used for sending notifications to users if they are near a branch or ATM. People with wearables can also receive alerts, sale offers or any kind of recommendations depending on their balance and location.
Wearables in financial services are useful as they:
- Accelerate business processes
- Leverage customer satisfaction
- Boost security measures
- Collect valuable data
- Provide instant reaction to any risks, movements, changes
Wearables in banking brings a lot of data about customers and their preferences, frequency of transactions. Banks and fintech companies can collect this data to provide more intuitive and secure solutions to customers.
Empower contactless payment
To pay for the things on the go has never been easier than today with wearable technology in banking. Imagine conducting payment for things you buy at the supermarket with a flick of your wrist or with some words said to a connected device.
Near field communication technology for payments works via mobile wallets like Apple Pay, Android Pay or Samsung pay. NFC is similar to radio-frequency identification (RFID) technology, but NFC chips transfer relatively small portions of data to other devices. That’s why we need to put wearable devices very close to each other to conduct payment.
Apple pay is the first wearable payment technology through the wrist
NFC chips can be inserted into contactless cards or smart watches like Fitbit. Nowadays 6 in 10 users of smartphones believe that chips under skin will be used to interact with objects. Lately some companies started to sell chips to attach on women’s nails. Such a weird innovation enables women to perform payments without pulling out their credit card.
Examples of fintech companies and banks that are launching separate pay systems:
- bpay contactless system in Australia
- wristband by Caixabank
- Westpac PayWear wearable accessories with a chip connected to a bank account
Wearable Internet is already a reality and it can be anything which a person can actually wear – smart coat, smart shirt, smart watch or jewelry. Wearable market is getting replenished with new innovations turning usual things into smart solutions. Number of people with wearable devices is growing, and a quarter of smartphone users enjoy wearables like Apple watch or Fitbit. However, a boom of wearables in fintech is still to expect. Among factors that can influence the spike of wearables’ popularity is also 5G technology.
Wearable payments will reach 500$ billion by the end of 2020
5G connection can help wireless devices consume more data at faster speed making them super sci-fi. People’s actions will be completely followed by applications. Imagine your raincoat will predict the weather forecast and your shoes will count the number of steps. Vibration of smart devices will tell you when to go ahead or when to turn left to find the location you need.
It’s already today that we can use smart earbuds – wireless in-ear devices that can communicate with Siri or Alexa, stream calls and music, customize the volume of music and turn off surrounding noise at all. The device will use biometrics to measure your heartbeat, blood pressure or calories burned. Such earbuds, or hearables, have their data storages and react to gestures, so you can answer a call with just a nodding “yes” with your head.
Shift to smart credit cards
Internet of Things connected credit cards allow two-way communication between a client and a bank. Dynamics is the company that creates battery-powered interactive credit cards. If put simply, it is the first computer inserted into a credit card that allows information, cost control and convenient usage of your finance at your fingertips. Such Iot financial service is changing the way people access banks, purchase things and manage multiple accounts via a single credit card.
Use beacons in financial services
How time-consuming it has become for a majority of young people to visit a banking branch physically! Let’s accept the fact that people today prefer to solve things online via a banking app rather than spend time commuting to the branch and waiting in a queue. This is where IoT financial services come beneficial – smart devices automate, accelerate and personalize the way you receive services.
Let’s take beacons as an example. These are small wireless Bluetooth devices that identify devices in close proximity and enable them to perform some actions. Beacons are widely used in stores for marketing purposes and improving customer experience.
This technology has found its application in Fintech as well. Beacons can help clients at banks receive upgraded personalized service. Mobile wallet users can perform fast payments or transactions, place money on deposit via beacons. Banks can manage queues and as soon as clients enter the branch their smart wearable devices connected to beacon will notify them of available consultants to approach, list of services, offers, sales and other valuable information. Beacons in fintech can help with:
- Cash flows monitoring
- Managing and processing balance inquiry
- Alerts
- Offers depending on geographical location
Gather data for better solutions in fintech
Nymi startup develops wearables and interesting to note they used heartbeat for biometric authentication. Wearables can be a source of large amounts of customer data which allows to extract useful insights, like performance and peak points of customers in a branch.
Iot wearable devices like smart watches can react to users’ balance, overdraft, spendings, and attempts to withdraw money. Wearables also offer easier access to rewards points offered by banks. The US Bank has launched the IoT project to encourage clients to stay fit. They introduced smart scales connected to the financial system. Everytime you succeed at weight loss IoT technology offers a reward from the bank.
- IoT in banking will help people find branches within their geographical location at certain moments
- Consultants could provide faster services as they will have real-time customer data at hands
- IoT wearable devices used in finance operations improve brand recognition
- IoT technology can help reduce operational risks and trigger automatic payment contracts
Enhance security
AI and Iot cybersecurity solutions gather special data, analyze activities, detect movements and images via special sensors. British Standard Chartered invest a lot into developing IoT for Finance. Together with Huawei they have developed IoT applications that can track movement of goods and trigger automatic payments.
IoT in financial services uses biometric sensors to identify people present in a branch and send alerts to the bank system in case of suspicious activity. Such sensors provide instant reaction to robbers invading. Because wearables in banking transfer biometric data and sensitive information like credentials, devices can appear vulnerable. So it’s necessary to think of appropriate security. All the data filled in by a client to access his bank account via device should be decoded. Clients should also have an opportunity to erase data and block their access to it when the device is lost. A great deal are strong passwords, PIN numbers and double authentication.
Combine AR with IoT
AR can unlock the full potential of IoT. 85% of respondents manage IoT and AR together. Wearable IoT devices capture data from the physical world, while AR devices take external data, process it and provide new better solutions from its side to the physical world. Companies which combine IoT and AR solutions have drastically increased in number since 2017.
In Fintech application of AR and IoT can help with the next things:
- Data collection, visualization and navigation at place via digital means which reduces time of operations. Facial recognition systems, smart doorbells, smart locks can navigate people in an office or branch and become new intuitive assistant
- Expanding human capabilities and resolving complex problems
- Reduce costs and bring more profit to businesses. AR-IoT apps can predict and send alerts in case of risks which usually leads to additional expenses to recover from consequences. Software and wearable payment devices reduce the amount of manual work and automate everything to a level when a client interacts only with machinery to get services and stay completely satisfied.
Final recommendation
Think about software applications to develop and the target audience. If you are going to develop something like a voice autonomous payment system integrated with Google Voice Assistant, talk with experts about integrations. Conduct discovery phase and learn what data you have to use and where privacy rules go. Think of security measures and what data has to be decoded so that make the system fully compliant with privacy and security regulations.
