WoT-Enabled Banking Sector Modernization

Introduction

The banking sector, which is the core of financial services, is a necessity for the socio-economic growth of any country. The banking sector has existed in every country for ages, doing its work to boost the economy But in this era of digitization and internet, the banking sector is constantly challenged by the GAFAs (Google, Apple, Facebook and Amazon) and by the companies offer- ing/developing the various financial software applications [1].

As indicated by Capgemini's World Fintech Report of 2017,50.2% of clients state that they preferred digitization and automation and have thus started opting for the banks with more IT-enabled facilities [2]. Thus, for any bank, in order to keep itself alive in the financial market, there is a requirement to endorse the upcoming technologies so that it can be more client-driven and create more advanced facilities to its customers [3].

The fundamental task of any banking sector in an economy is to play its part in the growth of the financial service sector by transferring the money from the bodies with surplus capital to those bodies who need these funds. Most of the decisions about lending money by banking sector are based on the assumption that borrower will pay back the loan amount with interest. For the individuals who deposit their money in the banks, banks facilitate them with easy deposit policies, security in respect of their money, interest on the deposited money and easy access to the deposited money [4,5].

WoT or the Web of Things is no longer a matter of research only; it is now implementable. WoT is changing the manner in which we perform certain tasks and its availability is making businesses smart, cheaper and more and more customer friendly. WoT mainly works on the principle of using data analytics to automate the tasks which were initially tedious for humans to do efficiently [6]. For core banking requirements, such as Know Your Customers (KYC) norms fulfilment, credit lending, risk management, non-performing asset calculations, recovery, collateral management, finance trade and various types of insurance, WoT has smart solutions to deal with them. Combined with other developing advances, for example, digitization of the whole work, WoT can make new peer-to-peer (P2P) plans of action that can possibly improve banking in a couple of zones. WoT is the interconnection of remarkably recognizable inserted registering gadgets inside the current internet framework. WoT is relied upon to offer availability of gadgets, frameworks and administration that goes past machine-to-machine (M2M) interchanges and covers an assortment of conventions, areas and applications [7]. In the banking sector, the interconnection of these WoT-enabled services with digitization will introduce automation in many banking-related services.

WoT has the potential to completely modify the way the banking sectors are working. As the banking sector mainly deals with huge money transactions, these money transactions generate huge amounts of data, which is collected and analyzed for various banking sector-related operations. WoT has a strong grip on this data, which in turn can benefit both the banking sector and the customer [8]. WoT is the biggest technological evolution which is claiming the biggest ever digital revolution in future. WoT technology in the banking sector will help customers save time, investing smarter and planning a more appropriate lifestyle, and to the banking sector to increase its revenue by offering better customer services. WoT in the banking sector is still in its infancy, but there is huge scope for its growth and further innovation in the WoT-enabled banking sector.

This chapter is organized as follows: Benefits of WoT in the banking sector; examples of WoT in banking and financial services; challenges and design issues with WoT-enabled banking services; and growth rate of WoT-enabled banking services.

Benefits of WoT in the Banking Sector

The banking sector is moving toward the digitized world to avail of, as well as offer, numerous better approaches to serve its customers and to gather significant information of customers through various sensor-based gadgets. By adopting digitization through the means of WoT, the banking sector has effectively implemented M2M communications to users' screens and remote frameworks. Here, the remote framework implies CCTV, digital signage and ATMs. WoT innovation has also enabled the banking and funding industries to help their customers innovatively and help them accomplish superior business results [9]. Thus, WoT has turned out to be a significant advancement leading to banking innovation. Directly from upgrading client experience, streamlining activity to set up computerized banking machines to diminish line time, acquiring adaptability administration and increasing the efficiency of representatives, WoT has turned into a piece of "things to come in banking." The next section presents the benefits of WoT in the banking sector.

WoT-Enabled Product Planning and Customized Marketing

With the WoT innovation, banks can launch better services and help centers for its customers. With the help of information gathered by WoT, the banking sector can plan what service or offer can benefit both the customer as well as the banking sector. Furthermore, it will help the banking sector to choose the perfect time for launching new services [10]. Customized marketing is the most ideal approach to hold the client in an aggressive market. WoT innovation has made it feasible for the bank to monitor all customer exercises and offer items and administration according to their necessity.

WoT can assist the banking sector in understanding the present economic situation of the customer and accordingly the banks can plan to offer various services and investment schemes to its selected customers. This will guarantee keeping up a solid association with their client and a better client experience.

Today, the banking sector is investing more and more into reliable services, promoting its business, offering better services to its clients and automating various approvals and verifications for fast delivery of banking services. This vision of today's banking sector can be formalized by using cloud services. In cloud-based services, banks are required to store their clients' information on the cloud and can utilize this information to offer fast and better services. One such example of cloud-based banking is by using customer relationship management (CRM) programming, which is a client relationship with the board and CMS, which is a content administration framework. Using these two frameworks and some decision rules, the customer archives are stored on to the cloud in such a way such that they are secure and easily available to banking system. All this data and its implications can be used to improve business tasks and secure customers' recent financial transactions [11].

WoT-Enabled Proactive and Prediction-Based Banking

WoT-enabled banking services have made it feasible for the banking sector administration to identify any kind of administration or financial issue. Also WoT-enabled banking services bring notice of any discrepancy and forward it to the concerned in good time, such that the bank can easily resolve the issue. With WoT innovation, the bank can follow and check past data and client conduct before offering any banking-related service. This way, any unusual activity or action in the client's record can be identified and analyzed. This client-related information in WoT-enabled banking can be obtained from social media, e-commerce websites and through portable applications and advanced technology. Today, every bank has portable and sensor-based applications for banking like ATMs and pay-in slip generators that also give information about the client. This information can also help the banking sector analyze client conduct and prerequisites and helps in automating and reliable banking transactions [12].

WoT-Enabled Credit Credibility

The profit earned by banks is based on the credit-related services, such as loans like home loans, motor-vehicle loans, gold loans and personal loans, which it offers to its customers. For banks, these services need a guarantee that the borrower will not be a defaulter. Often banks take special measures to check the client's capability to repay the loan, but even then, many of the loans are not paid back and result in losses to the banks. The creditor data/ information assessment via social media, ecommerce websites and a wide range of sensor-based gadgets have a lot of effect on the reliable credit business of banks and will have to continue to aid the bank throughout the loan period for timely repayment of loan. The sensor-based gadgets which are the gadgets perceiving the present business status of customer, medical coverage and living style, the bank can approve the credits/loans to its customers in a hassle-free manner. With the help of these gadgets, the bank can also decide on the backup plans, in case of any default by creditors, and improve strategic approaches. This backup plan basically focuses on the customer's actual wealth, spending behavior and possible income increments to assess the customer's hazard [13].

WoT-Enabled Bank Data Management

Banks have to process a large set of data and investigations on a regular basis and they need to screen every one of the money exchanges to maintain a strategic prevention from any unethical services. With the help of WoT, data can be made accessible to the bank and can be utilized by various frameworks and systems of banking. For example, a customer who is using its banking app on mobile has an alternative to click a snapshot of the required document and upload it onto banks server by using mobile services. These user-friendly services will increase profit and productivity and improve the customer's trust and relationship with the bank.

From the bank's perspective, for example, the bank advances home loans to its customers after proper verification and documentation. On these home loans, the banks can also extend maintenance loans after a few years if required by borrower. However, for disbursing the maintenance loan, physical verification of the required maintenance has to be done by the bank. For automating this service, banks which are utilizing WoT innovation can give their borrowers a choice to install sensors in their new house. These sensors provide reports to the bank in advance about any required home improvement or maintenance. These installed sensors can also help in expediting the approval process and will reduce desk work and fieldwork [14].

WoT-Enabled Credit Card Facilities

A reliable network connectivity can give important client data and information to banking-related administrations. After analyzing customer data like shopping choices, love of gadgets and travel choices, the banking administration can then inform its selected customers about new offers in a shopping mall, travel locations, credit quantification, things to buy from nearby places, places to visit nearby, and so on, by using the client's current location. Generally, low- range communication, such as Bluetooth or Wi-Fi technology, is preferred for sending notifications to these selected customers. This is a very innovative way to advertise for people who are really interested in a particular product [15].

Because of the advent of WoT-enabled services in banking sector, it offers customized, solid and fast services to their clients. This has been possible due to the data which has been collected and analyzed when it is required.

WoT has the capacity to accelerate the setting of the interface between the banking sector and its clients and enables them to address the client's issues in a fast and reliable manner.

WoT-Enabled Banking-Related Information Dissemination to Customers

WoT can help banks in educating its customers about various customer- related banking practices. For instance, when people need a loan for a vehicle or house, utilizing WoT, they can check the up-to-date information regarding the procedure to be followed for obtaining the loan and loan repayment schedule. If their loan is approved, the customer can check their credit balance, premium paid, principal paid, prepayment if done, current interest rates from any point without physically visiting the bank. This example is only one facility which can be linked with WoT-enabled banking services [16].

WoT-Enabled Personalized Customer Services

Taking into account that inclinations and choices of the client are dynamic in nature, banking organizations focusing on development in different financial solutions and banking innovation cannot disregard new advanced digital developments and hence are required to participate in the improvement of the new digitized world. With the advancement of technology, clients today keep contact with their bank by using mobile phones, a tablets or personal computer. This accessibility of banking services to the client through digital technology, through which banks are collecting information about clients, their conduct and inclinations aids the banks to observe and propose further improvements required in WoT applications. The association of banking services with WoT has enabled the gathering of large amounts of information on the client's conduct as well as their future financial interests. This information about clients enables banks to serve its clients in a more professional way and offer them more specific and customized services thereby developing a fruitful bond for both. Hence, it enhances a new level of understanding and connection between bank and its customers, which further leads to business enhancement and further innovation. For example, imagine a client enters a bank branch from the main entrance gate. The bank's WoT-enabled system can utilize various biometric sensors and programming to validate the client's identity with the help of face recognition. Similarly, a client may usually withdraw money from the ATMs of your bank. In this case, WoT-enabled services can guide the ATM to get the cash ready for the client and also guide the customer in its preferred way of withdrawal like denominations and amount. Furthermore, banks can offer various face-recognition-based security services to its customers [17].

WoT-Enabled Customer Smart Interaction

For now, capacities of the WoT in the banking sector are not being fully explored. WoT has initialized its first step into the financial sector. However, it is evident that WoT will play a significant role in banking methodologies. Specialists have foreseen the added specialties of WoT- enabled banking services where clients will have access to the option to link their bank-related services to its personalized gadgets. For instance, smart devices like watches can raise an alert to its owners, when they spend more than an amount predefined by the customer. Today, apps developed for the banking sector send an SMS/alert to the customer, whenever the customer spends money on a service or product. However, with the advent of WoT, these banking applications will also suggest a better alternative spending plan.

Banks throughout the world are attempting to utilize WoT abilities in their industry to include more clients. Beginning from portable banking applications that are utilized today by almost every bank in the world, since applications help in monitoring the interest of clients, to the scope of sensors that make it workable for banking sector to assemble data from their branches and sensors in wearables that can monitor how clients use banking items [18].

Example: With the different types of sensors and programming techniques, cashless payments can be by customers without contacting client's mobile phone or any banking card. For instance, clients may simply enter into the sales section of a store, and sensors implemented there will automatically identify the type and quantity of items in the basket. Based on the type of items, the total cost of the items is calculated and payment is made through a customer mobile wallet. This mobile wallet may use face-recognition sensors to verify the client's identity.