Brian Schaeffer, a certified information systems auditor and certified information systems security professional, recently said that the trend towards the Internet of Things will create new ways for customers to interact with banks.
IoT is based on the premise that all devices, which have unique identifiers, are connected to the internet and are able to communicate without human interaction. For example, fitness bands have emerged that track and record activity throughout the day that is then uploaded automatically and put into a chart combined with dietary data to show fitness level.
Schaeffer said one international consulting firm estimates that as many as one trillion devices will be connected to the internet by 2020.
“In the end, the IoT way of thinking will continue to evolve and present new and better ways to improve the customer experience,” Schaeffer said in the Pennsylvania Association of Community Bankers’ “Transactions” publication. “[N]early all consumer-based technology is moving in the IoT direction, if not already there.”
Schaeffer said, however, that leveraging the trend towards IoT will be a challenge for banks because they raise the institutions’ risk profiles and present new security issues.
“Imagine the very same IoT devices being used to attack a financial institution or masquerade as a legitimate customer to steal funds,” Schaeffer said. “Additionally, if you consider the risks introduced by cloud-based services usually tied to these devices, your IT risk management departments will be running for the hills. Clearly, new ways to address these risks will be needed before any widespread implementation can succeed.”
Schaeffer said banks will need to determine how the trend will impact their institutions.
“By working with their providers or internal IT departments, banks will be able to effectively establish a strategy that addresses the associated risks while providing the most opportunity for service and growth,” Schaeffer said.