Forecasts suggest that by 2030 around 50 billion internet of things (IoT) connected devices will be in use around the world spanning everything from smart watches to smart wallets. Covid-19 has further impacted this shift in consumer behavior and accelerated the need for digital transformation, particularly for banks.
Post pandemic, consumers are likely to continue to bank remotely with demand for better chat, mobile banking and digital payments far superseding says creating a better banking center.
Banking industry is responding to the shifting consumer behavior with more investment in IoT advancements and digital technologies to go beyond transactional offerings. For e.g. initiatives like digital account opening, fully remote customer onboarding and KYC (Know your Customer), smart banks, smart wallets, smart payments, automation in loans and insurance processes rank as hi-priorities for banking CIOs.
However, all disruptive technology, especially in the financial sector, comes with a grueling checklist. There is high element of risk with regards:
- Data Security and Cyber-attacks. As the number and range of connect devices multiply, so do the security risks
- Adhering to global privacy standards and compliance requirements. For e.g. all wearables also provide banks access to customer’s location data in real-time, which may lead of breach of privacy in several jurisdictions
- Legacy systems: The cumbersome systems of yesterday simply may not be able to support a true digital transformation
- Data and Analytics: Banks are poised to collect terabytes and terabytes of data about their consumers. But what do you do with this information? Effective use of data science and data analytics is what can give a critical competitive edge.
- Digital experiences are vastly different from brick and mortar setups. The need and design for banking products will be led by the consumer more than ever before.
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