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As the accumulation of devices capable of internet activity expands across all areas of life, so does the infrastructure for FinTech services. Therefore, in the coming years, we can expect to see significant streamlining of existing financial services. More importantly, separating the wheat from the chaff will be more prominent than ever across all industries.
In a blink of an eye, as far as the great expanse of history is concerned, we’ve gone from the inefficiency of the grueling manual labor to the automation of both physical and mental labor. In a span of a mere 255 years, we are on the brink of the Fourth Industrial Revolution. We regard the milestones of the previous three as follows:
Although not as monumental as the previous three, the Fourth Industrial Revolution (4IR) is still significant enough to alter our daily lives. Revolving around computing and internet connectivity, 4IR operates on three levels:
These three ingredients create the foundation for the IoT – Internet of Things – the staple of the Fourth Industrial Revolution.
According to a Fortune Business Insights report, the global market for IoT–powered services is estimated to increase from a mere $190 billion in 2018 to $1.11 trillion by 2026. Likewise, the increase of connected devices is expected to rise from 14.2 billion in 2019 to 25 billion by 2021. Smartphones will be the main pathway and access point for IoT-based services, as Ericsson estimated in the June 2018 mobility report, with 3.5 billion cellular IoT links by 2023. This would make for an estimated annual growth rate of 30%.
Of course, all of these estimates did not account for the severe coronavirus disruption. Still, given the current trend of a massive rise in internet traffic, and potential for these newly-formed habits to linger, we may be looking at underestimation. It all depends on the rate of economic recovery.
It is then understandable that investors across the globe are in a frenzy to pick FinTech companies and startups with the greatest potential and talent. They will be charged to improve the FinTech sector across the board:
Here is a brief overview of just some of the applications of IoT in the FinTech sector.
Always-on authentication. As simple and lightweight as a wristwatch, the Nymi smart wristband registers the user’s heart rate and then uses it as part of a multi-factored biometric authentication. Expect to see more of such always-on wearable authentication in use. This technology is anticipated to see integration with wireless payment settlements.
Individualized customer service. In 2017, Microsoft conducted an extensive customer service survey. Among the findings, one was especially notable – almost unanimously, 96% of customers place importance on the quality of customer service as a major factor for brand loyalty. Combining context-enabled gadgets with machine learning (AI), customer service will become more individualized.
Smart and effortless self-checkout. If coronavirus has revealed anything, it is that store employees are essential personnel. However, instead of risking their health, a solution in the form of wireless self-checkouts will become more common. Amazon is already implementing one with its self-checkout stores.
Mental and physical automation. Finance and accounting have always been a fertile field for automated procedures. With the increasingly competent AIs, or expert systems as they were called previously, a financial institution can greatly increase their output and lower the cost of operation. Other kinds of automation will take place as well. For instance, the Citibank app allows users to open branch doors to access ATMs off hours.
Device interaction. Imagine getting a credit line but one of the stipulations is that the bank is directly entangled with your ability to make regular payouts. By linking the banking tool, a customer can set a limit to their spending or even block the account.
As you can see, the 4IR is just launching off the ground. No doubt, once it covers the obvious, we will be surprised by the variety and originality of solutions applied to the ‘typical’ activities of today.
When you think of IoT, are you anxious about potential intrusions into your privacy, or are you relieved that countless tasks will be done automatically? We’d like to know what you think in the comments section below.
Image courtesy of MarTechToday.