IoT offers a range of digitalization benefits to BFSI (Banking, financial services and insurance): from 360-degree customer view to enhanced financial security, fraud detection, advanced insurance strategies, and more. Moreover, IoT-enabled advancements help banking and finance companies meet their clients’ expectations and offer a better customer experience.
If you want to expand the capabilities of your business with IoT, reach out to us: our experienced team knows how to make IoT work for you.
IoT in Banking and Finance Operations
We’re living in an era where everyday objects, from ATM machines to wearable devices, can collect and share data in real time. And, that is the power of the Internet of Things (IoT). IoT is transforming banking, financial services, and insurance in various ways, including:
- Automating routine tasks
- Strengthening security
- Delivering personalized experiences
- Detecting fraud faster
- Enabling seamless, cardless payments
Below, we’ll walk you through the key benefits, fresh examples using today’s top IoT and edge‑computing platforms, and practical ways you can start leveraging IoT for your business.
Why You Should Care About IoT in Finance
Get to Know Your Customers Better
- Smart sensors and connected apps gather data on how and where customers spend, what devices they use, and even their driving habits.
- A neobank like Monzo uses 5G‑enabled geolocation data from your smartphone to automatically categorize your expenses as you move from cafés to supermarkets. It then sends you nudges if you’re nearing your monthly budget.
Automate and Streamline Key Processes
- Edge devices (e.g., AWS IoT Greengrass or Azure IoT Edge) process data locally: opening accounts, updating credit limits, or triggering alerts, without manual steps.
ING deploys IoT‑driven kiosks that verify your identity via live facial recognition and onboard you for new accounts in under two minutes. This helps cutting back‑office work by 40%.
Enhance Physical and Cyber Security
- How it works: Networked cameras, smart locks, and vehicle telematics protect your branches, ATMs, and cash‑in‑transit fleets. Wearables with biometric scanners secure your mobile and in‑branch transactions.
Mastercard’s contactless payment ring embeds an NFC chip in a durable, waterproof form factor. This allows you to authenticate transactions with a tap, combined with on‑device fingerprint recognition for two‑factor security.
Spot and Stop Fraud in Real Time
- How it works: IoT devices feed continuous data streams into AI engines (built on platforms like Google Cloud IoT Core & Vertex AI), spotting anomalies, unusual locations, rapid transaction spikes. And instantly freezing accounts.
IoT feeds continuous transaction data into AI engines, built on platforms like Google Cloud IoT Core and Vertex AI, to spot anomalies (unusual locations, rapid spending spikes). This immediately blocks suspect activity.
For example: Mastercard’s generative‑AI fraud engine scans millions of transactions per second to detect compromised cards and scam patterns, doubling detection speed and cutting false positives by up to 200 percent. When a suspicious payment is flagged, your customers get instant push notifications, and you can automatically freeze the account until they confirm via the mobile app.
Enable Effortless, Card-less Payments
Today’s most widespread wearable payment method is Apple Pay on Apple Watch:
- How it works: Your customers simply double‑click the side button and hold their Watch near any NFC‑enabled POS terminal. Authentication happens via on‑device Face ID or Passcode, so the card number is never shared with merchants.
- Mainstream adoption: Apple Pay is supported by over 11,000 banks and tens of millions of merchants worldwide, with hundreds of millions of users in 78 markets. This accounts for a 5.6 percent share of U.S. retail sales volume and 58 percent of in‑store mobile wallet transactions.
This approach eliminates physical cards entirely for those who choose, while maintaining the same security guarantees you’ve come to expect from EMV‑level encryption.
IoT Solutions in Banking & Finance To Adopt Today
Smart Branch
- What you get: Real‑time queue monitoring via overhead cameras and motion sensors; digital signage updates customers on wait times; voice assistants powered by Amazon Alexa or Google Assistant answer common queries (“What’s today’s exchange rate?”).
- Partner with an IoT integrator to deploy off‑the‑shelf modules (like Azure Kinect for motion tracking) and voice‑bot frameworks.
Intelligent ATMs
- What you get: Sensors log foot traffic, ambient conditions, and cash‑level metrics. You can dynamically adjust lighting and HVAC to save energy, and get instant alerts if a skimming device is detected.
- Connect your ATM fleet to a central dashboard via AWS IoT Core; use Lambda functions to automate restocking and maintenance scheduling.
Trade‑Finance Visibility
- What you get: GPS and RFID sensors on shipping containers feed live location and condition data into your trade‑finance platform, so you can assess risk, release payments on confirmed arrivals, and scale financing based on real‑time inventory.
- Deploy LoRaWAN trackers for long‑range asset monitoring; integrate with smart‑contract workflows on a blockchain network (e.g., Hyperledger Fabric) for automated fund release.
Usage‑Based Insurance (UBI)
- What you get: Telematics dongles or smartphone apps measure your driving behavior like speed patterns, hard braking, time of day, and tailor your premiums accordingly. You save money by driving safely.
- Integrate an IoT telematics SDK (like Verisk’s IoT Drive platform) into your insurance app; use real‑time MQTT feeds to calculate risk scores on the fly.
Cargo‑Condition Monitoring
- What you get: Temperature, humidity, and shock sensors in perishable‑goods shipments stream data to an analytics engine. If conditions drift outside safe thresholds, you, or your customer, get an immediate alert to take corrective action.
- Use cellular‑connected NB‑IoT sensors for global coverage; pair them with time‑series databases like InfluxDB for rapid anomaly detection.
Automated Accounting and Audit Trails
- What you get: IoT‑linked payment terminals and ERP connectors automatically feed transactional data into your accounting software, eliminating manual entry and speeding up close‑of‑month. Audit‑grade logs track every change for regulators.
- Combine webhooks from your point‑of‑sale network with RPA bots to push entries into systems like QuickBooks Online or Xero in real time.
How to Get Started with IoT
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Assess Your Use Cases:
Identify high‑impact areas like fraud prevention, customer engagement, or branch efficiency. This is where real‑time data would move the needle.
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Choose Your Platform:
Compare AWS IoT, Azure IoT Central, and Google Cloud IoT Edge for device management, data ingestion, and built‑in AI services.
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Pilot with Off‑the‑Shelf Hardware:
Start small with development kits (Raspberry Pi with 5G hat, Bosch or TI sensor modules) before scaling up.
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Secure Everything:
Implement zero‑trust architecture, device identity via X.509 certificates, and end‑to‑end encryption. Consider blockchain‑based device registries for tamper‑proof auditing.
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Scale and Iterate:
Use containerized edge‑compute nodes to process data locally, reducing latency and bandwidth costs as you grow.
By embracing the latest IoT and edge‑computing tools, you’ll not only tighten security and cut costs but also deliver the kind of real‑time, personalized services today’s customers demand.
Ready to explore what IoT can do for your financial services? Reach out to our IoT specialists, and let’s turn your data into your next competitive advantage.