Finance Monthly November 2019 Edition

49 www.finance-monthly.com FINANCIAL INNOVATION & FINTECH - IOT to help build detailed customer profiles and enable fraud detection. The same data could also enable banking institutions to build partnerships with brands that can push relevant deals through to banking customers in the area, enabling even closer relationships with customers and providing more useful perks. The benefits of IoT services within the financial sector aren’t just limited to retail banks. Insurers can use IoT capabilities to aid interactions with customers and to accelerate and simplify underwriting and claims processing, as well as default prediction. It can also help insurance companies to determine risk more precisely. Automotive insurers, for example, have historically relied on indirect indicators, such as age, address, and creditworthiness of a driver when setting premiums. Now, data on driver behaviour and the use of a vehicle, such as how fast the vehicle is driven and how often it is driven at night, are available. These new data sets can help insurers provide premiums that more accurately reflect their consumers. Another application of IoT within the financial sector that has the potential for huge implications is in trade finance. International trade flows are currently expensive and predominantly paper-based due to the inefficiency of the supply chain in moving goods. IoT within trade finance can be used to make these processes quicker by tracking movement, supply and demand. This can significantly improve the efficiency of the process by reducing the cost and risk for the enterprise. However, in order to have any meaningful impact on trade finance, there would need to be a large scale, global adoption of IoT - allowing every part of the ecosystem to be accounted for and creating a seamless process. If key issues around cybersecurity can be overcome, the IoT presents a huge opportunity for the banking sector. And there will certainly be disruptors willing to provide that access - so the time is now for banks to start thinking about technology development that will take advantage of this before a competitor gets there first. www.publicissapient.com