8 ways IoT & AI are impacting financial services
Artificial intelligence has been around for quite a while now but both interest and development in the field have increased exponentially in the past decade. Computational costs have decreased allowing for more and more powerful computers being made. These machines do not lack the hardware and processing power to correctly perform intelligent decisions based on collected data.
Artificial intelligence is the future, revolutionizing our lifestyle and the way we do even the simplest of tasks. At the same time, IoT is gaining popularity rapidly and it will inevitably come to rely on artificial intelligence. The data collected through the interlinking of all computational devices around us is too vast for manipulation by humans but is easily comprehended and evaluated by a computer to make the best use of it. Both these phenomena are set to shape and change the future by impacting not only our lives but also every industry vertical. One in partcular that is likely to benefit massively is financial services.
The Internet of Things is no longer just a concept. Manufacturers have released products designed to work with each other and are also working on interoperability between devices from different vendors because only then will a smooth and useful experience be provided to the user. These intelligent devices will integrate seamlessly into our lifestyle and their interconnection with each other is what will make them have a huge impact on our financial lives. Insurance, healthcare, and banking will benefit the most from this and provide better and more options for using IoT with advanced financial products and services.
Automated financial advisors make use of AI to assist the user in handling and making decisions related to their financial issues. These roboadvisors monitor the user’s financial goals and stock prices to offer suggestions on which stocks or bonds to buy or sell. AI applications installed and working in user devices analyze huge amounts of data to offer relevant financial advice and forecasts.
Smart wallets use AI to learn user’s habits and needs and warn them about their expenditures so they can practice restraint.
Smart devices are in use today that monitor all aspects of a person’s health. With the evolution of IoT, these devices will only become more intelligent and able. Monitoring data from these devices will allow for monitoring the user’s health and act in situations where intervention may be necessary. This process will also allow health insurance companies to be better prepared in advance and prevent and cure diseases at an early stage before they become chronic. Not only will this lead to reduced costs for both patients and the healthcare companies it will also help dynamic pricing in insurance premiums based on the record of a person’s health and fitness.
Internet of Things will allow insurance companies to monitor drivers and their vehicles to record miles driven, driver habits, changes in speed and the time of the day they drive to calculate and assess risk levels. This will deliver better premium rates for users who drive well.
Even today home insurance companies are encouraging customers to install devices that monitor their property by providing incentives. Intelligent tracking devices can be used to warn of potential danger, track water leaks, carbon monoxide levels, and smoke to detect and warn in case of a fire. Analytics based on IoT data can be used to predict future events like weather patterns in a certain geographical area. Insurance companies are also employing drones to assess the amount of damage in the case of an incident. All this will allow for better pricing for both service providers and consumers.
Customers will be able to make transactions and inquiries using different devices. Banks will be able to collect information and monitor behavior patterns to provide better and sound financial advice and services.
