The BoT brings together data and relationships to offer more personalised service at key customer milestones, but this comes with potential risk.
As the payments market continues to digitise, consumers are demanding streamlined real-time interactions with banks to remove friction whilst delivering personalised experiences anytime, anywhere and through any device.
The Banking of Things (BoT) is an infrastructure generated from billions of existing connected devices, known as the Internet of Things (IoT). Data from these connected devices, from fridges to lightbulbs, can offer improved financial services between people and businesses, enabling rich, frictionless, and personalised interactions with customers, contributing to the modernisation of retail banking.
BoT provides fintech’s with the ability to capture and leverage customer data to affect actionable insights. According to Jeremy Baber, CEO of Lanistar, it will be critical to delivering better banking customer experiences, and there are a range of drivers that will lead to the expansion of BoT as its importance grows.
Baber said: “BoT will become much more accessible and scalable for the fintech industry thanks to the development of cloud computing, Web3 and blockchain, the broad adoption of mobile technologies by Millennials and Gen Z, the digitisation of payments and the increasing number of smart devices consumers have access to.
“With the IoT boom comes the potential of BoT, and this infrastructure has the potential to create new products, services, and business models, ushering in a new era where products are designed not by banks but led by customers. This can strengthen partnerships between banks and industry players inside and outside the financial services ecosystems.”
There are some challenges to the wider adoption of IoT and therefore the potential of BoT. Some IoT devices are manufactured and sold with poor security, potentially exposing people to data and financial security, privacy, and physical security problems.
Baber continued: “It is no secret that wireless networks present multiple vulnerabilities and can be used to access smart devices, including sensors and cameras. This also includes other devices on the network, the infrastructure of the IoT provider or the financial institution. Another prominent issue is the visibility of connected devices as people cannot protect what they cannot see.
“However, BoT has great potential to create a range of possibilities for consumers and banks alike if teething problems are tackled. It’s therefore crucial that if fintech is to benefit from BoT, device manufacturers and leading tech developers work together to standardise and improve IoT practices to pave the way for a bright future for BoT” Baber concluded.