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Alexa, What Does The Internet of Things Mean For Financials?

Alexa, What Does The Internet of Things Mean For Financials?

Alexa, What Does The Internet of Things Mean For Financials?

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What Is It?

The Internet of Things (IoT) is the whole ecosystem of internet-enabled devices. It doesn’t only include computers and smartphones, but smart everything: smart fridges, smart homes, smart cars (driverless or otherwise), and even smart kitchen sinks. If something has a small computer that can share data with or take commands from another computer over a network, it’s in the IoT. Given how many things have recently become internet-enabled, it’s a pretty vast category.

We’re also seeing the emergence of devices that harmonize all these other smart devices. In theory, a computer or phone could serve this purpose, but voice assistants in particular have begun to fill this niche. Amazon Alexa and Google Home are two prominent examples of these voice-controlled computers that can connect to all your other smart devices and offer an easy, accessible way to control them and learn from them.

It’s a natural development. First laptops untethered the internet from desks, then phones untethered it from keyboards, and now voice assistants are untethering it from screens. As smart devices make more and more data and actions available to us through the internet, the number and variety of things we can do (and can expect) from our homes is skyrocketing.

New Opportunities For Financials

For financial institutions, this means a world of new opportunities. As it currently stands, only 9% of Americans still prefer to bank at physical branches, while 71% of them prefer to manage their finances through a mobile app or website (Source: American Bankers Association). By closing the service gap between digital and traditional banking, financial institutions can not only provide a better experience to their customers, but also gather insights they can use to their advantage.

More data means more products and services to offer. There’s a vast expanse of unclaimed ideas out there – after all, this is uncharted territory. Use your imagination. Even if it seems like science fiction, it might soon be the norm!

Financials have endless opportunities when it comes to the IoT. Consider a green mortgage which comes with a special rate for homebuyers willing to green-ify their home. All you need to do is select a smart home management hardware (like Nest), combine it with green technology (like solar panels, wind turbines, batteries, and more), and have your mortgage app interact with the green devices to ensure they’re working as they should, and you’ll have an environmentally friendly, money-saving, government-subsidized product that generates interest and appeals to millennials and zoomers.

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Or what about a smart bank account? You could offer a hybrid chequing/savings account that analyses customers’ cash flow habits and optimizes a distribution between chequing and savings, allowing them to save more without losing access to what they need.

Or even a teller-at-home? Create a voice interface app that lets users check balances, view reports (on their smart TV), deposit cheques (via camera), make transfers, and get savings recommendations, all with just a few words!

Insurers are in a particularly good position to create win-win situations for themselves and their clients with IoT devices. Home insurers can offer smart home insurance: home insurance bundled with water sensors, security systems, smoke and carbon monoxide detectors, dehumidifiers, and more, all connected to a central program. Properly installed, this suite could reduce claims by detecting leaks, fires, and other problems before they cause damage, offering both a more secure home and a chance for better pricing for claimants (and insurers).

Auto insurers can encourage better driving habits, suggest safer routes, monitor vehicle wear and tear, and reward safe driving with an in-car IoT app. Similarly, health insurers can offer better assessments and encourage healthier lifestyles with fitness trackers, smart fridges, heart rate monitors, blood sugar monitors, and more. Smart monitoring and dynamic premiums can protect customers with prevention and protect insurers with better data.

This is just the tip of the iceberg. There’s a quote, generally attributed to Galileo, claiming that the goal of science is to “measure what is measurable, and make measurable what is not so.” With IoT, almost everything is now measurable, and if you can harness its potential by collecting information and making sense of it, the world is yours.

Get In On The Ground Floor

The Internet of Things is an idea that’s been waiting for the technology to arrive – and it finally has. There’s a ton of momentum for smart devices in general, and voice interfaces in particular. Those who get there earliest, with the best product, stand the best chance of commanding the lion’s share of the audience. So get smart!

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