The Mindset and Insights IoT Needs From the Financial Services Industry

The world of finance has been here for centuries, and the Internet of Things (IoT) sector can learn from it.

The financial service industry has been dramatically changed by technological advances just in the same way that other sectors have been revolutionized by technology. As a result, traditional financial methods have been little by little left aside by Financial Technology or "FinTech" for short. Fintech, which is a relatively new concept, tries to transform the financial services industry by including online solutions to several financial processes.

How Technology Is Changing Banking

The use of smartphones for mobile banking, investing services and cryptocurrency are all examples of different technologies that aim to facilitate financial tasks. PwC’s 2018 Digital Banking Consumer Survey clearly shows how consumer banking habits are continuously evolving hand in hand with technological advances. This is why, as the report indicates, smartphone baking is on the rise in comparison to the same survey in 2017 as a direct result of consumers’ preference to interact with their financial institutions digitally.

Online transactions, banking apps and internet baking are just some of the ways in which technology has impacted the financial sector go far beyond these. The other part of these technological innovations stems from the data generated by the Internet of Things, which is often referred to as Big Data. Laptops, smartphones and even home appliances process and store information about our preferences and habits that can be employed by the financial sector to offer improved services.

The implementation of technology in the financial service industry creates some risks at which financial institutions are exposed to frauds and information thefts. In order to minimize these risks, another type of advanced technology is also necessary: Artificial Intelligence. The rise of platforms and applications that use consumers’ data require smarter and more sophisticated security products, which make use of AI to safeguard consumers’ transactions and information.

IoT Should Learn from FinTech's Security Solutions

Now, how can IoT benefit from the insights that the financial services industry provides? It is clear that IoT influences the financial technology industry, but it's not simply a one-directional relationship. IoT can gain some valuable insights from the security protocols that FinTech companies use to safeguard information.

As Christian Ranella, CEO & Co-founder of ElMejorTrato, explains “The Internet of Things has opened new avenues of attack, which become the target of cybercriminals, putting consumers’ information security on center stage.”

What is certain is that FinTech excels at protecting consumers’ personal information. IoT security technology can profit from the same advanced technology that FinTech employs to reduce the risks of cyber-attacks.

The impact that technological advances have had on the financial sector is huge. FinTech aims to deliver online solutions to different financial processes as well as sophisticated security protocols. As has been noted, the relationship between FinTech and IoT is two-way: one can gain new insights from the other and vice versa.