IOT –  Mobile financial services based on the Internet of things. This IoT industry has a solution to a problem which is not understood fully to date. IoT is playing a key technology role to shape FinTech and MFS along with other technologies like artificial intelligence, machine learning, big data, data science, cloud and many more. How this solution present help and support to “mobile financial services”? MFS is a kind of a bundle for financial services solutions. This bundle includes mobile payments, money, banking, commerce and many more. We will discuss the growth of the Internet of Things (IoT) and the ways it poses risk/opportunities to the financial services industry.

This post was originally published on 26-April-2015 on Linkedin. This blog post is an attempt to explores the different scenarios for the Internet of Thing – IoT under MFS segment. The idea of this blog post is to understand how IoT based MFS will impact and change normal people lives.


What Change IOT-MFS will Bring

As more and more consumer devices connect to networks and to other people, new opportunities and challenges will arise. Can we call this a mobile Revolution? To understand the contribution of emerging technologies tightly packed with artificial intelligence, machine learning, data analytics etc is not easy for the normal consumer. These technologies are becoming critical factors to the formation of our day-to-day activities, work and life. At least my day that is usually long began to contribute almost 80% of time towards Internet or on Internet & Mobile.

Mobile Financial Services - IoT As A Key Technology

The arrival of a new era, IoT in the coming period will spread so much that it will enter into every area of our lives, we will become units in the internet world. Which eventually will become life as usual when we will enter into the world of quantum computers, 5G & beyond network and artificial intelligence etc.

We will no longer sit on our computer or browse on a mobile phone. Internet will become an essential component of our life like Air, Water and Food. This would get into our lives so much that separation would not be possible. As of now its difficult to say, will that be a good or a bad thing.


What is the Internet of Things?

Internet of Things or IoT the way its known is a network/mesh of physical objects embedded with software, sensors and connectivity. Anything which can go online is part of IoT. The “things” within this network, can sense, process and share data with each other. Current examples of this technology include shoes with GPS tracker, IoT-2smartwatch and wearable glasses etc.

From collective research, market inputs and studies the estimated size of the IoT market vary with a huge gap, For instance, Gartner expects it to include nearly 26 billion devices, with a “global economic value-add” of $1.9 trillion by 2020. Others optimistic are; The International Data Corporation (IDC), for one, estimates that the universe of things connected to the Internet will generate nearly $9 trillion in annual sales by 2020.

Just to reconfirm, the IoT is not really a new concept. We had and have machines like the point of sales (POS) at retail stores since long etc. The technology transformation lies ahead in ways humans and machines will interact with each other. The internet of things includes anything and everything that is connected or can be modified to go online, able to communicate and share information with other devices.

These devices in this list include home appliances, fitness and health monitor devices, all internet enabled electronic gadgets, home security systems, mobile phones, tablets, cars, water taps, plugs etc. Even banking and financial portfolio details holding machines (mobile phones etc). We can control our home/office lights, fans, audio systems, temperature control equipment, smart cooking pots, toothbrushes, GPS tracked shoes, and wearable technologies like watches  & clothing etc. But end what else we are generating here on these devices? It’s the data which kills our privacy.


Internet of Things Framework for MFS

As on date, there are no framework or controls on the fact that we are putting everything online. After the device goes online:

  • What data it generates?
  • Who owns that data?
  • How that data can be used?

Most of the people as on date are still confused and not sure and wonder whether all this is just hype or an inevitable evolution. How people, devices, a financial system with electronic form value data, financial portfolios and networks will interact in the near future. What wonders or blunders could happen to anyone’s life and personal data. Only a few aliens (IT or Financial Technologists) knows where we are moving and how we are going to achieve it.

ideas-1Imagine a scenario where personal connected-health planner device is connected to the banking system. On the sign of any health issue like high blood sugar, heart attack or stork etc. It makes the decision to add more liquidity to the mobile payment instrument in order for paying off expenses later on. In the second scenario, where personal health planner will be able to make a decision to add more liquidity by asking investment bank portfolio manager to sell off stock or long term cash stones without owners intervention for adjusting medical bills. I guess it’s too much to imagine and also too much risk for money. But this all is coming to our financial services system will have IoT connection to support us in our need time.

Financial services institutions, who have already completed or near completion of their digital transformation goals will benefit the most out of this beautiful relationship between IoT and MFS. FinTech’s are far ahead of banks and banking system so without a doubt these new IoT technologies will support quickly. Increasing investments in wearable, machine learning, big data analytics and sensor technologies indicate there’s a major shift towards this betterment i.e. development.


Digital Transformation i.e Machines based Financial Services

The year 2015 can be called as the IoT movement. IoT industry is coming up, taking shape and attention as a separate industry. This is becoming a new revenue stream for many IT companies, professionals and experts. Many consumers and business users are now upgrading and updating their older technology and CVs. Experts in the domain of solution designing and architecture are now shaping the technology and making it cheap enough to put to anyone and everyone.

  • There will be nearly 30 billion devices wirelessly connected to the internet by 2020 (Gartner research). 
  • PwC’s 6th Annual digital IQ survey, a financial service is one of the top ten industries investing in sensors for devices like beacons in store for coupon etc.

If we go with projections as above then IOT will of $3 trillion dollar industry with the assumption of average cost with 100 dollars each device. This is only device manufacturing market projection. We can now do another projection our self for software, services and support markets.

Insurance companies becoming InsureTech by investing heavily in technologies like sensors i.e. telematics, which allows devices installed in cars (car tracking devices) to transmit location data to owners and insurers. Insurance companies can decide the premium or change the premium for each trip a vehicle make. Can track a stolen vehicle and help in recovery, automatic crash notification, and vehicle data recording force full actions by the controller over telematics infra. Telematics also extends to tracking ships, car and trucks for fleet management and route optimisation.

The bundle of IoT, AI and high-speed mobile data and mobile financial services ensure the users to get cashless fuel at a fuel station and tracking company can monitor fuel consumption as well as any fuel leakage or a steal. The driver is able to pay the parking fee, renew car registration, insurance premium etc. On the other hand, the owner is able to authorise/control every transaction from a smartphone or any normal phone by SMS or USSD etc.


Apple Pay – A re-invention of the Wheel

Apple introduced, Apple pay in 2014 which was not new or any innovation but it was all about re-inventing the wheel with different measures. Mobile payments industry was shocked and happy at the same time. Apple Pay users started sending secure IoTmobile payments without compromising their personal data (at-least expected and claimed). More seamless transactions made big difference in creating a better experience for their consumers. Apple iBeacon technology allowed retail customers to access location-specific coupons, product info or recommendations while browsing in stores.

Imagine a scenario where you walk in to store to buy some clothes with your friends but the store manager himself comes to greets you. How joyful is that? After greetings and welcoming the next thing is he take you to the section of your specific choice, taste and pocket size. You complete your shopping and pay with apple and save time, money and energy. You walk out as a happy consumer.

Remember that small beacon thing; that will notify the store manager about the entry of consumer and opens up a limited CV on his handheld device. So it’s not magic but a logic. This digital ecosystem of physical objects will change the way financial institutions, systems, banks or even mobile wallets interact with each other and us at a basic level. Bringing “things” (IoT) online will eventually make payment transactions implicit rather than explicit as explained in the previous example.


IOT-as-a-Service – Technology and Operations Management

IoT as a service – In my view, IoT as service is nothing but either exchanging the user’s data with business or giving them access to the data lake where all data is being dumped. The seller will have easier access to users financial and personal data for better interactions with buyers that weren’t otherwise available (Off course only of your choice and after permission/authorisation) because of the lack of infra it needed. The annexation of so-called big data will revolutionise the way the customer interacts with different platforms and how information is presented.

Example 1 – You are trying to buy stuff online with a value of $100 dollars but at the same time your balance is only $80 dollars. What would happen in a normal scenario is simple i.e. transaction will fail. But now imagine this scenario with IoT data collection lake along with financial data, machine learning algorithms and superb connectivity etc. The machines will rethink before rejecting the transaction. The machine will take a second look before any decision on whether you should be allowed to continue the purchase based upon historical records i.e. monthly expenditure, salary data, spending habits etc.

In the example above machine might create $20 credit for the transaction to go through and notify about the calculation and recovery options. If this happens user experience will go beyond wow factor. At the backend machine will recover $8 dollars per month for the next 3 months, I am pretty sure consumer will never mind or even notice.

Example 2 –  A consumer enters into a shopping mall and based upon cell phone location mobile network service provider throw a personalised advert via SMS. In the SMS recommendation comes out to buy a specific choice of cloth from the shop 3rd floor in the same building. This advert has almost 300% more chances to get conversions compared to the SMS where the consumer is at home with no money and far off from the location. So tracking user data with IoT will change the user’s experience by changing business models a bit.


Summing up MFS with Data, IoT, & AI  Equals to Fantastic MFS

With so much of data availability, the potential benefits are exciting and plenty. The seamless transactions and more personalised customer experience are just a few examples of benefits that MFS equipped with Data, AI and IoT can bring. As long as there is transparency and honestly then data can enhance customer satisfaction. trust, and complete change in marketers job.

IOT-3Machine learning techniques can learn and detect behaviour or transaction behaviour of the consumer to provide the best and secured experience. Any anomaly detection at  ATM (with camera) while consumer interaction or online usage of credit/debit cards can be raised an alarm for the next action.

Another big potential may be the connection between financial instruments i.e. wallets, credit card, or investment accounts etc. to some of the common household or health monitor devices could automatically rebalance. It can reduce or increase the exposure, or transfer holdings to liquid securities, in anticipation of future cash needs.

This may sound a bit far-fetched now but days are not far when this would become business as usual for everyone. It is predicted that eCommerce sales in 2015 will reach $276 billion.  That is a lot of sales it does not seem to be slowing down. And 90% of this payment will come through mobile payment method with a combination of IoT and Mobile Payments.


Books + Other readings Referred

  • Research through Open Internet – NewsPortals, Economic development report papers and conferences.
  • Personal experience of  @AILabPage members.


Sign-tConclusion: Innovations also come with new risks. The deluge of new data is likely to complicate data management for financial services firm. So these emerging technologies are boosting MFS and entire financial services business. For sure industry is using AI and machine learning to increase returns, lower costs and improve customer experience. The companies which are still not open to welcome and adopt changes brought through new electricity called Artificial Intelligence will slowly die because of no power. The questions that remain are how far will the Internet of Things go in MFS and banking? How other sectors such as banking and investment banking can leverage IoT technology? Of course, cybersecurity will become the biggest and a greater challenge of all times.


#payments , #mobilepayments , #mobilemoney , #IoT , #internetofthings


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Posted by V Sharma

Technology specialist in Financial Technology(FinTech), Photography, Artificial Intelligence. Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Mobile Payments), Data Science, IT Service Management, Machine Learning, Neural Networks and Deep Learning techniques. Mobile Data and Billing & Prepaid Charging Services (IN, OCS & CVBS) with over 15 years experience. Led start ups & new business units successfully at local and international levels with Hands-on Engineering & Business Strategy.


  1. Interested in digital banking.



  2. Thanks for sharing this huge informative knowledge with us.



  3. Thanks for posting with us.



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