is widely recognized that the Internet of Things (IOT) will have a huge impact on nearly every industry, and financial services is no exception. Gartner believes that the connected device installed base will reach 25 billion units by 2020, with an annual compound growth rate of 35.2 percent from 2013-2020.

The insurers are already exploring how IoT will transform the insurance industry by improving the dialogue with customers, more accurate models of prices and fast calculations. This is achieved through real-time monitoring, data collection and analysis of the behavior of both the P & C and life insurance. This creates many opportunities for holding, and the threat from new entrants, such as Google.

Although the impact of IoT insurance is inevitable and more obvious, the analysis of Deloitte predicts that the IoT has the potential in both retail banking and capital markets as well. While the use cases may seem somewhat less obvious ultimately banks rely on data access to credit and risk management analysis. Deploying M2M communication and sensors represent a new array of data sources that can be used in the context of a bank.

In addition to adding new data sources, credit score, sensor technology could revolutionize the monitoring of collateral and loan balance statements for small and medium enterprises as well as corporate clients. Imagine the ability to monitor in real-time inventory or livestock production and agriculture segments. This potentially allow banks to perform automated and almost real-time reporting of balance.

In tandem with the promise of smart contracts, banks may be able to deliver loans at a much lower price, as well as to the existing loan officers effective tools when considering loan portfolios. Access to customer data in real time also allows new business models as dynamic installments on the basis of real-time analysis of available capital and operating cash flow. Much like iZettle and area that offer pre-approved loans based Billing payments fraction of future sales through its terminals.

with great potential comes great complexity and uncertainty.

When driving on payments, we are beginning to see the beginning of the use of connected devices and wearable. In addition to Apple, although Pay Apple Watch, Visa is working with Pizza Hut and Accenture on a proof of concept for online purchases related vehicles and MasterCard payments through a supportive group fitness Jawbone.

The banks are also starting to work with different companies to reward customer loyalty for their purchases in real-time by identifying and offer deals through geo-location. While IoT raises security issues, personal biometric although Articles of apparel and connected devices can potentially increase security, if done correctly.

However, these solutions are still working on the premise that a person tied to a person. IoT to achieve their true potential benefits, the concept of identity must also include the things. It is also a challenge to the concept of connecting a person’s bank account, as well as the existing scheme of the card as a means of transmitting values.

When the machine can perform operations with the machines in real time based on the marginal cost, the concept of payments obsolete in many cases to use as transactions become automated and integrated into other services. How to pay for the uber now hidden for the end-customer car future may make payments in the charging station on your behalf.

While the IoT and M2M communications will provide payments invisible as utilities in some cases, banks are also exploring the use of connected devices to improve customer engagement through automated branches and contextual services based on consumer behavior and geographic location.

IoT is projected to change the global economy, and we just scratched the surface of some of the potential uses of banking and financial services. Looking back, using big data in the banking sector, few could have predicted it was possible to prove the link between the correct use of the capitalization when writing your name on the website and your credit 20 years ago.

Just imagine the possibilities that lie in the use of data in real time from billions of connected devices in the future. However, with great potential comes great complexity and uncertainty and, as Machiavelli said, “There’s nothing more difficult to take in hand, more dangerous behavior, or more uncertain in its success, than to take the initiative to introduce a new order of things “.

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