During the last few years, technologies made their impact not just on the global understanding of finances but on our daily life, too. For example, we all feel how convenient became our transactions with the rise of mobile banking. And new exciting ideas continue to become a reality with the help of professional technical teams. In the foreseeable future, we can wait for a lot of new improvement, and a huge number of them will appear with the help of IoT. So, how exactly the Internet of Things can improve your financial business? IoT connects devices, cars, buildings, and even people to the Internet and each other. With a help of small sensors in home appliances, clothing, and a lot of other things we can manage them through our smartphones. IoT has already changed our homes, offices, manufactures, now it’s time for the financial industry. 
Read more: Offices of the future, or how IoT will change our workplaces
 It is predicted, that the global market of IoT will grow up to $25 billion by 2020. The most significant contribution of IoT in FinTech will come to customer experience, security, infrastructure, transactions, and payments.

Security & compliance

Of course, security is the first priority for every financial company. Your clients want to be sure their money is safe when they are using your service. Researches say, almost 70% of companies are ready to implement IoT and Artificial Intelligence technologies to improve security level and detect fraud. On the one hand, using IoT in the financial services is rising the number of entry points for cybercriminals. On the other hand, it is one of the best ways to deal with the fraud by faster identification of weaknesses and a quick reaction to them. With IoT technology, a bank can check if the device a consumer is using to make a payment is within close proximity to other known smart devices connected with that client. Tracking the geolocation of a customer’s assets can recognize a potential risk. Authentication Driven Authentication from Callsign, which recently raised $35 million, is already combining this method with biometrics. Another important way of fraud prevention is new methods of authentication. Wearable devices can gather new biometric data. Enterprise-grade security solution from Nymi is a good example of this approach. Combining biometrics and strong cryptography, they secure all information produced on the manufacturing. A lot of banks now are studying IoT technology. U.S. Bank, for example, is going to secure payment management and information exchange. This is not the only IoT project of U.S. Bank, but they are also working on different links between financial programs and different objects. 

Customer experience

From better security — to better services. The network of microsensors can gather extra data to make financial procedures more personalized. Smartphones can play the role of beacons to notify managers when a customer is visiting the branch. Inside banks buildings, IoT technology will reduce queues and help customers to find their way around the branch and get to the right representative. Wearables or our gadgets are already used as a kind of electronic ticket to enter a branch. Citibank (New York, USA) had a pilot program for customers. Using IoT technology, they’re providing a more secure way to open ATM doors for over 60,000 users. The new bank’s application allowed customers to enter ATM lobbies without any kind of card. How does it work? Customer’s device detects microsensors which instead sends to the application a message asking if they would like to enter. Then customer just selects ‘unlock’ on their gadget and enter the lobby. The reports from Proximity.Directory and Unacast gives a lot of ideas on how exactly banks can use IoT, and Location Intelligence is main of them. For banks, placement of IoT sensors is the best tool for branch optimization. Using location data with proximity-sensing technology, you can reveal which branches should be closed, which of them are more popular and can be expanded, and more. Also, foot traffic can help to understand the optimal number of ATMs for the specific places. 

Transactions & payments

This area offers a lot of benefits not only to banks and financial institutions. Any business can make a huge step forward in a race of competitors using payment through the air. IoT enables payments not just without cash or credit cards but without smartphones, too. The conduct of financial procedures can be approved by biometrics such as voice or facial recognition. Imagine the level of convenience when to make a payment you don’t have to look for your card or unlock the device but just smile to the camera. A smile itself is using by Chinese Alipay for facial recognition technology in fast-food restaurants. Register in the system — have dinner — smile to the terminal for payment. 
Read more: Three trends that are changing the nature of digital payments
 Bankers say that Smart Homes and Smart Devices are the great way to get into the lives of customers. Why do not pay attention to how exactly a customer connects their refrigerator to the Internet? A smart refrigerator senses the household has run out of some kind of food and orders it from the local grocery store. Sometimes built-in payment system is not convenient enough, so why do not offer a clear and trustful application for that? Through this kind of apps, a bank also can gather information for marketing and customer services.

Before deploying IoT

Before implementing any new technology, you should consider a lot of important factors. We have already talked about security which should be the first priority for any financial company. IoT is the network of numerous devices, and each of them should be protected. Also, it is important to not forget about privacy and make sure your systems are meet the GDPR (General Data Protection Regulation). 
Read more: 7 things developer need to know about GDPR
 IoT equipment is produced by different companies and there are no common standards for it. Even if we have some command standards, technical issues will still remain. This problem can lead to failures in the functionality of IoT devices. Also, IoT is a huge system where each link plays an important role in proper connection. And that statement is true for hardware and software as well. That is why you need high-quality development companies, and Ralabs is one of them. We are ready to offer you our experience and aspiration to bring any of your outstanding ideas in life. Here you can find some examples of our work with IoT and FinTech.