IoT for Smart Banking and Finance: Use Cases, Benefits and Challenges

In this article, we’ll cover several examples of intelligent automation in banking and the benefits that intelligent automation brings to the table. Financial institutions that develop their own models to automate decisions, such as loan applications, will have to take particular care. This is not to suggest that as computers become more intelligent, they may not able to perform the more abstract tasks that still require humans. In my view, we will ultimately get to that world, although probably at a slower pace than most people expect.

However, experts interviewed for this article said that the ‘intelligence’ incorporated into intelligent automation is usually provided by packaged software or cloud services from third parties. Maintaining the security of the underlying ML models is unlikely to be the direct responsibility of all but the most sophisticated IA users, for the time being at least. This makes it critical to adjust the data that the automation system is trained on. Historically biased or discriminatory data must be recognized before adding it to the system so it doesn’t reinforce it. This is why diversity in the workplace, specifically within banking and finance, is so important. Having people from a variety of different backgrounds helps recognize those biases in the data, thus training the AI so it gives more balanced decisions based on fair data.

What might the AI-bank of the future look like?

However, throwing AI at an individual problem or experimenting with automation on the side is no longer sufficient. A big bonus here is that transformed customer experience translates to transformed employee experience. While this may sound counterintuitive, automation is a powerful way to build stronger human connections. Automation reduces the need for your employees to perform rote, repetitive tasks. Instead, it frees them up to solve customers’ problems in their moment of need. Once you’ve automated portions of your processes, it’s important to be able to piece them together across business functions and from the second a customer makes a request until the task or issue is resolved entirely.

• IoT devices produce a lot of

  data that banks can use for smart decision-making.

• You want to offer faster service but must also complete due diligence processes to stay compliant.
• There are clear success stories (see sidebar “Automation in financial services”), but many banks face sobering challenges.
• What is more, several trends in digital engagement have accelerated during the COVID-19 pandemic, and big-tech companies are looking to enter financial services as the next adjacency.
• As banks grow and evolve, they need to ensure that their RPA solutions are scalable to accommodate increased volumes and complexity.

For instance, incorporating

IoT in real estate

enables lenders to access valuable data on property conditions and market

trends, enhancing mortgage lending decisions. This process enables more

flexible lending processes that better reflect a customer’s financial status. IoT strengthens security in banking by combining biometric technology with IoT

devices, ensuring secure access to banking apps and transactions. Real-time data

from IoT devices offers detailed information about a customer’s lifestyle and

financial habits. Yet, with the integration of IoT, this process can be

significantly streamlined.

Your Core Bank System and Efficiency

Additionally, IoT-connected video surveillance systems in [newline]bank branches improve physical security by monitoring suspicious activities. Examples include context-aware payment

options, remote mobile check deposits, and insurance premiums based on

real-time data like driving habits. IoT can also lead to the creation of [newline]digital-only banks, shaking up traditional banking and making the financial

sector more accessible to everyone. IoT devices produce a lot of [newline]data that banks can use for smart decision-making.

By 2030, research projects the AI market could reach a two-trillion-dollar valuation. Across the world, companies are pouring billions of dollars into advancing artificial intelligence while packaging it into enterprise-ready solutions. Consequently, back-office solutions like automated data extraction will continue to become even more intuitive and commercially available. Our company has worked alongside banks, such as NatWest, the Royal Bank of Scotland and DF Capital, to implement intelligent automation in the form of automated data extraction from financial documents. The EDM Council, a trade association that advises financial organisations on data management, has created a cloud data management capabilities framework that includes guidance on ‘model operationalisation’.

True Artificial Intelligence in automation will not only highlight a pattern, but explain why it exists, and why it matters. This is crucial to organizational decision making for current and projected trends. Ultimately, automation should be one piece of your overall toolkit to serve customers. Automation applied in banking through the core banking platform and beyond should primarily augment and support existing employees and workflows. As banking’s ability to automate tasks improves, so will the ability to serve customers and employees. Typically, some form of automation already exists in a platform or solution when a bank adopts it, streamlining processes for the institution on day one.

Their previous process for processing legal documents was manual and error-prone due to complexities surrounding various state and jurisdiction-based decisions and actions. What this means is that while continuing on your digital transformation journey, your teams should have an eye toward more composable architecture types such as those offered by microservices. Composable architectures grant you the ability to make updates to existing systems on the fly with little to no downtime and also allow for the rapid launch of new initiatives. Once you’ve successfully implemented a new automation service, it’s essential to evaluate the entire implementation.

Unleashing efficiency using intelligent automation in banking and financial services

Read more about Automation in Considerations About Technology here.