The Internet of Things has been increasingly growing, influencing many industries including Fintech. It’s potential is limitless and has the opportunity to change the way we live and the way we work.
The Internet of Things (IoT)
The Internet of Things is the concept of connecting any device to the Internet and to each other. IoT is not limited to machines – it includes simple devices such as headphones, lamps, coffee makers, etc. It’s the relationship between “people-people, people-things, and things-things.” IoT is a big trend right now, but some think it’s even bigger than expected. It provides a mobile, virutal an instant connection that alters the way we live. It can eve spread as far as sensors that can detect faults in a bridge or communicate traffic conditions to drivers. Companies such as Amazon, German-based Bosch and Siemens, Microsoft, Dell, Samsung, Google, IBM, and GE have all taken initiatives in the Internet of Things industry, creating and connecting devices while also building next level software. Startups from all over the world have also taken their part in creating IoT and driving the trend forward.
The Impact on Fintech and Banking
The statistics are there: the IoT will contribute to nearly $2 trillion in global economic benefit. One of the main impacts of this gigantic trend will be on Fintech. Whether it is to make a customer’s ATM experience easier through usage of smart devices, facilitate risk management in auto insurance or help manage households and their home insurance, IoT has a definite impact on Fintech’s development. It makes the process of data collection, management and sharing much more accessible for Fintech companies. On the other side stand banks; IoT can help with secure payment management and the exchange of information to make the banking industry more efficient than ever. International trade finance decisions and customer authentication can also be influenced by the Internet of Things to make transactions more legitimate.
The Future of IoT
While the Internet of Things has become a widely-known trend, it has a great possibility to grow in the future. IoT platforms and a change in the design of operating systems and device architecture are some of the predicted IoT trends that will take the industry to the next level. One of the biggest possibilities, however, remains security. With the growth of Fintech, comes a growth in security risks and challenges for the industry. The Internet of Things can be utilized to make systems interconnected and protect against information attacks, tampering and fraud. Another huge opportunity is the generating of data – IoT will help manage data streams with a very large number of data entries. Distributed stream computing platforms have emerged as the future of IoT by helping with real-time analytics and pattern identification.