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The Internet of Things (IoT) is taking over our world. In a previous post, our very own Vemula Chandana writes in her article about how IoT can save world from hunger and defined IoT as physical devices around the globe that are now connected to the internet. These devices constantly send and receive data, which can then be used to create meaningful insights and help make our world a better place.
Due to the sheer amount of IoT devices, companies across all industries will benefit one way or another from data generated by these devices. The finance industry is not exempt from this. The IoT is transforming financial services from the ground up and essentially changing how individuals manage their personal finances.
In this post, we take a look at the different ways that IoT has affected personal finance.
More Data Generated Means More Insights
As more and more financial products are launched each day, it can be difficult to figure out which ones fit your lifestyle and preferences the most. Financial advisors can only do so much, and even they are prone to recommending the wrong financial products. But as IoT devices become more prevalent and integrated into our lives, we can now gain deeper access to data and insights about our day-to-day activities.
Combined with other technologies like machine learning and artificial intelligence, the data and insights produced by IoT devices can help us make better financial decisions in the future. For example, a Deloitte report highlights how in the near future, IoT sensors in vehicles and smartphone apps can provide insurance carriers data on a driver’s driving history and performance. This data can then be used to recommend drivers with auto insurance that suits a driver’s needs the best.
Accurate Credit Risk Management
A post on solving the new credit problem by Petal Card, points out that despite being a critical financial tool in this day and age, credit card ownership among those aged 18-25 continues to decline. What’s more, the average credit score among those below the age of 35 is well below the national average. True enough, credit underwriting is a prevalent problem today in the world of personal finance, and this has dissuaded many people from accessing beneficial financial products such as credit cards and loans. IoT can help solve this problem by assisting banks in offering more tailored solutions to their customers. Through data generated by IoT devices and applications, banks can precisely predict a consumer’s creditworthiness and better serve those that have yet to build credit a decent credit score.
Tailored Customer Service
The Financial Brand notes that customer satisfaction is what drives loyalty to a certain financial institution. A customer is more likely to do business with an organization if they feel happy with the products and services provided to them. For this reason, banks and other financial institutions actively look for ways to offer a better customer experience. One way they can do this is by personalizing their approach through utilizing IoT data. Using data collected from applications and other IoT devices, banks can better understand and know their customers, as well as offer products and services based on customer activity and past purchases. This then personalizes the customer experience and can encourage customers to support and remain loyal to an organization and their products.
Without a doubt, IoT will soon revolutionize and improve the world of personal finance. As IoT makes it easier to access and provide financial products, exciting times are ahead for both individual customers and financial institutions.
NEXT READ: How to use credit card wisely
Software Engineer. I like to help people with my articles. I hope you like them.
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