IoT in Banking and Financial Services Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, By Component (Hardware, Software, Services), By Application (Security, Customer Experience Management, Monitoring, Data Management, Others), By End Use (Banking, Insurance, Others), By Region & Competition, 2020-2030F

Market Overview

The Global IoT in Banking and Financial Services Market was valued at USD 58.56 billion in 2024 and is expected to reach USD 110.40 billion by 2030 with a CAGR of 11.15% through 2030. The Global IoT in Banking and Financial Services Market refers to the application of interconnected smart devices, sensors, and communication technologies to transform financial institutions' operations, customer service, and security infrastructure. Through IoT, banks and financial organizations can gather real-time data from multiple sources including ATMs, mobile devices, wearables, and branch sensors to improve decision-making, streamline operations, and deliver better customer experiences. These systems help monitor transactional behavior, detect anomalies, automate routine tasks, and reduce risks associated with fraud and non-compliance. The integration of IoT into the financial sector is creating a new data-driven model where banks are no longer passive service providers but intelligent, proactive solution hubs.

The market growth is primarily fueled by the rising demand for digital banking services and the increasing adoption of smart technologies to enhance financial processes. Institutions are deploying IoT to track branch occupancy, ATM maintenance needs, and customer wait times in real-time, which improves operational efficiency and cost management. Moreover, IoT allows for greater personalization in financial services. For instance, wearable devices can be used to make contactless payments or notify users of unusual banking activity. These innovations are reshaping how financial services are delivered and accessed. Additionally, the growing focus on cybersecurity and regulatory compliance is pushing banks to adopt IoT solutions that provide end-to-end visibility and rapid threat detection across systems.

The market is expected to rise steadily as more financial institutions embrace digital transformation strategies. The expansion of 5G and edge computing will further accelerate IoT deployment in banking by ensuring faster data transmission and enhanced analytics capabilities. In emerging economies, increasing smartphone penetration and mobile banking adoption are also contributing to market growth. Furthermore, collaborations between fintech firms and traditional banks are fostering new use cases such as IoT-based loan underwriting, insurance tracking, and asset monitoring. As banks strive to stay competitive and meet evolving customer expectations, the demand for IoT solutions in the financial services landscape will continue to grow at a significant pace.

Key Market Drivers

Growing Expectations for Hyper-Personalized Banking Experiences

The rise of Internet of Things (IoT) devices has transformed consumer expectations across sectors—and banking is no exception. Today’s customers demand banking experiences that are not only convenient but deeply personalized. IoT-enabled devices such as smartwatches, connected voice assistants, and mobile payment wearables are continuously capturing behavioral data, such as spending patterns, geographic mobility, and even biometric indicators. Banks are harnessing this real-time data to anticipate customer needs, preemptively offer financial advice, and deliver location-aware promotions or alerts. This leads to significantly improved customer satisfaction and loyalty, which are critical in a sector that increasingly competes on experience rather than product alone.

Personalization driven by IoT goes beyond marketing. It reshapes how financial products are structured and delivered. For instance, dynamic insurance policies that adjust based on IoT-enabled health or driving data are becoming commonplace. Personalized loan offers based on lifestyle habits or transaction triggers are also emerging. By embedding analytics within these IoT interactions, banks can refine credit scoring models, reduce customer churn, and identify upsell opportunities with far more precision than traditional CRM tools allow. As consumers grow accustomed to intelligent service delivery from tech firms, financial institutions that fail to invest in IoT-led personalization risk falling behind. In a pilot across three digital-only banks, over 4,500 customer interactions initiated through IoT devices such as wearables and smart speakers resulted in 820 real-time responses, compared to 560 via standard app notifications—demonstrating higher responsiveness through IoT-based channels.

Transformation of Physical Banking Infrastructure into Smart Branches

IoT is playing a vital role in the reinvention of physical banking spaces. Although digital banking continues to rise, branches still serve as essential touchpoints—especially for high-value or complex services. IoT technology enables financial institutions to upgrade these locations into “smart branches.” Motion sensors, facial recognition systems, occupancy counters, and interactive kiosks allow banks to manage foot traffic, optimize energy usage, and allocate staff more effectively. For instance, a smart branch can redirect customers from a crowded counter to an available advisor using real-time occupancy data, improving service flow and reducing wait times.

Connected ATMs equipped with IoT modules now self-diagnose technical issues, predict cash shortages, and report operational inefficiencies. Instead of reacting to breakdowns or running inefficient cash cycles, banks can proactively service machines, leading to significant cost savings and improved uptime. Moreover, temperature and energy sensors help banks manage branch climate control systems based on occupancy levels, lowering power consumption. Smart infrastructure reduces long-term operational costs and enhances customer experience, delivering clear ROI for financial institutions transitioning into hybrid service models. Over a six-month period, 75 branches utilizing IoT-enabled sensors reported 12,000 fewer ATM service requests and saved approximately 8,500 kilowatt-hours of energy compared to similar-sized branches lacking IoT automation. This reduction highlights the efficiency and operational benefits of IoT integration in banking infrastructure, leading to lower maintenance demands and improved energy management across branch networks.

Strengthening of Multi-Layered Fraud Prevention and Cybersecurity

Cybersecurity is a top priority in banking, and IoT adds both new risks and powerful defenses. While IoT increases the digital surface area susceptible to attack, it also offers cutting-edge tools for fraud detection and response. Banks can leverage IoT-enabled biometric scanners, geofencing technologies, and behavioral monitoring tools to build sophisticated identity and access management systems. For example, if a transaction is initiated using a customer’s card, but their wearable device is detected thousands of miles away, the system can flag or automatically halt the transaction. These checks provide an additional security layer that deters fraud before it escalates.

IoT also supports real-time behavioral analytics. By establishing user-specific transaction patterns based on device usage, banks can quickly identify anomalies such as erratic login behavior, foreign device pairings, or unusual spending. Integration with smart home devices can allow users to authorize transactions via biometric voice or facial recognition, significantly reducing reliance on passwords or PINs. Ultimately, IoT not only enhances the integrity of transactions but also strengthens consumer trust in digital banking channels—a vital factor in a sector increasingly reliant on online and mobile engagement. In a controlled study conducted across two banks, IoT wearables connected to user accounts demonstrated significantly enhanced fraud prevention capabilities. Out of 4,800 flagged transaction attempts, these wearables successfully blocked over 1,300 unauthorized transactions, compared to just 780 blocked by traditional card-based verification methods. This highlights the potential of IoT-enabled authentication to provide more precise, real-time security, offering stronger protection against unauthorized access in financial systems.

Expansion of Embedded Finance through IoT Connectivity

IoT is a critical enabler of embedded finance, where financial services are seamlessly integrated into non-financial platforms. Connected devices such as cars, appliances, or wearables are creating new contexts for transactions. For example, in-car payment systems can trigger auto-loan offers based on mileage patterns, or smart refrigerators can prompt grocery budgeting insights linked to a digital wallet. This contextual relevance means that financial services become invisible yet indispensable to everyday life—offered exactly when and where the customer needs them.

Banks and fintech companies are using IoT data to create responsive credit, insurance, and investment products embedded within partner ecosystems. Instead of waiting for customers to approach them, financial institutions can now offer services proactively through everyday interactions with smart devices. These frictionless experiences not only boost adoption but also deepen brand engagement. As more consumers adopt voice-controlled and IoT-enabled commerce, banks that fail to adapt their platforms for this real-time, ambient finance model may lose relevance in tomorrow’s ecosystem-driven economy. In a trial with 1,200 connected vehicles, 320 drivers accepted instant car-loan offers delivered directly through their vehicle dashboards, significantly outperforming the fewer than 200 who accepted identical offers via mobile banking apps. This demonstrates the effectiveness of in-vehicle financial services in capturing user attention and enhancing convenience, suggesting a promising future for embedded IoT-driven banking experiences.

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Key Market Challenges

Ensuring Data Privacy and Regulatory Compliance

One of the most significant challenges facing the global IoT in Banking and Financial Services is the imperative to ensure data privacy and meet complex regulatory requirements. The integration of Internet of Things technologies introduces vast amounts of data collected from connected devices such as smart ATMs, biometric sensors, and mobile banking applications. This influx of sensitive customer information, including financial behavior, transaction histories, and even geolocation data, presents substantial risks if not adequately safeguarded. The financial industry is inherently data-sensitive and thus is required to comply with stringent data protection laws such as the General Data Protection Regulation in Europe and the California Consumer Privacy Act in the United States. These regulations demand that institutions implement robust mechanisms for data encryption, secure storage, and transparent data usage policies. However, the dynamic nature of Internet of Things ecosystems makes consistent compliance a complicated endeavor, particularly when third-party vendors and cross-border data flows are involved.

Maintaining privacy in a globally interconnected Internet of Things environment requires consistent governance structures, which are often lacking. Financial institutions must invest significantly in privacy-by-design frameworks and adopt adaptive regulatory strategies to cope with the evolving landscape. The heterogeneity of regulatory regimes across countries further complicates this landscape, as what is deemed compliant in one jurisdiction may not suffice in another. Additionally, customer trust hinges on the financial institutions' ability to protect data proactively. Any data breach, especially in a system as interconnected as the Internet of Things, could compromise not only an individual's data but also the operational integrity of entire banking networks. Therefore, while Internet of Things innovations present opportunities for personalization and efficiency, the imperative to uphold data privacy and compliance presents a formidable challenge that institutions must navigate with utmost diligence.

Managing Interoperability and Infrastructure Complexity

The global IoT in banking and financial services is characterized by a diverse array of devices, platforms, and communication protocols, which results in significant challenges related to interoperability and infrastructure management. As banks and financial institutions increasingly adopt connected devices to streamline operations and enhance customer experiences, ensuring seamless integration across varied systems becomes critically important. Many legacy systems used in financial institutions are not designed to support the dynamic, real-time data exchanges required by modern Internet of Things applications. This lack of compatibility can hinder the full realization of Internet of Things capabilities, limiting the efficiency and effectiveness of the solutions deployed. The complexity is further amplified by the need to maintain uninterrupted service delivery, secure transactions, and operational continuity while overhauling or integrating new Internet of Things infrastructure.

To overcome this challenge, institutions must adopt standardized protocols and invest in scalable and flexible technology architectures that support diverse Internet of Things configurations. However, establishing a harmonized infrastructure across global operations is often cost-intensive and requires significant technical expertise. Financial institutions must collaborate with technology vendors, industry consortia, and regulatory bodies to establish interoperability standards that can facilitate broader Internet of Things adoption. Additionally, the constant evolution of technology necessitates a proactive approach to infrastructure upgrades and risk assessments. Institutions must anticipate not only current integration challenges but also future demands, such as increased data volume, edge computing needs, and AI-driven analytics. Thus, managing interoperability and infrastructure in a global Internet of Things context demands strategic foresight, continuous investment, and an agile operational mindset.

Addressing Security Vulnerabilities and Cyber Threats

The exponential growth of Internet of Things devices within the banking and financial services sector has expanded the attack surface for cybercriminals, introducing a new dimension of security vulnerabilities. Unlike traditional systems, Internet of Things devices often have limited computational resources, which makes it challenging to implement robust security protocols. Furthermore, many of these devices are deployed in unsecured or remote environments, increasing their susceptibility to unauthorized access and tampering. As a result, financial institutions are increasingly exposed to threats such as distributed denial-of-service attacks, data interception, and malware infiltration. The consequences of such breaches are particularly severe in the financial domain, where compromised data and services can lead to massive financial losses, reputational damage, and regulatory penalties. Securing each point of entry in an interconnected Internet of Things ecosystem requires a layered defense approach, including device authentication, secure firmware updates, and anomaly detection systems.

Compounding this issue is the rapid proliferation of devices, which often outpaces the ability of security frameworks to adapt. Many Internet of Things devices are manufactured without uniform security standards, resulting in inconsistent levels of protection across the ecosystem. Financial institutions must contend with this fragmented landscape by establishing comprehensive security governance models that encompass device lifecycle management, real-time threat intelligence, and incident response capabilities. Moreover, the integration of Internet of Things solutions with other digital banking innovations, such as cloud computing and blockchain, introduces additional security considerations that must be holistically managed. In light of these complexities, addressing security vulnerabilities in a globally distributed Internet of Things infrastructure is not just a technical necessity but a strategic imperative for the financial sector. Institutions that prioritize proactive cybersecurity measures will be better positioned to mitigate risks and maintain customer trust in the increasingly digital financial ecosystem.

Key Market Trends

Rise of Smart Branches and Connected Banking Interfaces

The evolution of smart branches is a prominent trend in the global IoT in banking and financial services market, where financial institutions are leveraging connected devices to transform the traditional customer service model. Smart branches utilize technologies such as sensors, biometric scanners, and interactive kiosks to create a seamless and personalized customer experience. These interfaces enable real-time customer recognition, service customization, and intelligent queue management, significantly reducing wait times and operational inefficiencies.

The integration of Internet of Things with artificial intelligence allows branches to gather data insights from customer behavior, enabling banks to offer tailored financial products and proactive assistance. Through the deployment of ambient sensors and Internet of Things-enabled surveillance systems, institutions also enhance branch security and environmental efficiency. This transformation not only drives operational cost savings but also aligns with evolving customer expectations for frictionless, omnichannel banking experiences. The adoption of smart branches is becoming a strategic imperative for institutions aiming to stay competitive in a digitally-driven financial landscape.

Enhanced Fraud Detection and Risk Management via Real-Time Analytics

Financial institutions are increasingly deploying Internet of Things technologies in conjunction with real-time analytics to enhance fraud detection and overall risk management. Connected devices generate continuous data streams that allow banks to monitor transactions, account access, and behavioral patterns with unprecedented precision. For example, wearable devices or mobile banking platforms equipped with geolocation tracking can trigger alerts when a transaction occurs outside the customer’s usual region or time zone, signaling potential fraud.

Internet of Things-enabled systems can cross-reference device identity, biometric input, and network access patterns to detect anomalies in real-time. This proactive approach significantly reduces the response time to fraudulent activity, enabling institutions to mitigate risks before they escalate. Furthermore, integrating Internet of Things data with machine learning models improves the predictive accuracy of risk assessment tools. As cyber threats grow more sophisticated, the use of real-time Internet of Things analytics is becoming an essential pillar of a robust fraud prevention and risk management framework.

Deployment of Predictive Maintenance in Internet of Things-Enabled Banking Infrastructure

Predictive maintenance is emerging as a vital trend in the global IoT in banking and financial services market, allowing institutions to preemptively address equipment failures and reduce service disruptions. Internet of Things sensors embedded in banking hardware such as automated teller machines, cash deposit systems, and biometric verification terminals continuously monitor equipment health and performance metrics. By analyzing this real-time data, financial institutions can detect anomalies that signal wear and tear or impending malfunctions, thereby scheduling maintenance before a breakdown occurs. This approach not only minimizes downtime but also optimizes maintenance costs by replacing reactive service calls with data-driven intervention.

Predictive maintenance enhances the customer experience by ensuring that essential banking services remain consistently operational. Banks can also use the data to improve procurement strategies and allocate resources more efficiently. As the reliance on complex, interconnected Internet of Things systems continues to grow, predictive maintenance will play an increasingly critical role in operational resilience and cost efficiency.

Segmental Insights

Component Insights

In the Global IoT in Banking and Financial Services Market, the Hardware component comprising sensors, smart devices, network gateways, and connectivity modules, emerged as the dominant segment in 2024 and is projected to maintain its leadership throughout the forecast period. The critical role of hardware in establishing the foundation for end‑to‑end IoT ecosystems in financial institutions cannot be overstated. Banks and financial services firms continue to invest heavily in smart ATMs, biometric authentication terminals, asset-tracking devices, contactless payment readers, and IoT‑enabled infrastructure within branch networks. These hardware deployments create the essential “digital nervous system” that captures, communicates, and enables real‑time decision‑making—making hardware not merely a cost center, but rather the strategic enabler of broader digital transformation.

Several market dynamics reinforce hardware’s primary position. Emerging regulatory frameworks in numerous jurisdictions mandate robust physical security and tamper-resistant technologies, driving demand for certified IoT devices. The acceleration of contactless and biometric payments—fueled by consumer preference and public health considerations has required widespread hardware roll‑outs in user‑facing environments. Financial institutions with branches, ATMs, and payment terminals face continual upgrade cycles to support new connectivity standards such as LTE‑M and NB‑IoT, ensuring that hardware refreshes remain at the heart of investment plans.

While software and services are essential for analytics, cybersecurity, and platform orchestration, these layers ride on top of a physical layer whose scale, complexity, and regulatory importance make hardware the largest, most resilient, and most visible market segment. Consequently, the hardware component is set to retain its dominant share of market revenue and strategic focus in the Global IoT in Banking and Financial Services Market through the coming years.

Application Insights

In 2024, the Security segment emerged as the dominant application in the Global IoT in Banking and Financial Services Market and is expected to maintain its leading position throughout the forecast period. The growing complexity of cyber threats, financial fraud, and identity theft has compelled banks and financial institutions to prioritize IoT-enabled security solutions. These include biometric authentication systems, real-time surveillance, fraud detection algorithms integrated with IoT sensors, and smart access control devices.

As financial services continue their digital transformation, ensuring secure transactions and safeguarding customer data across connected devices has become mission-critical. Regulatory compliance requirements such as Know Your Customer and Anti-Money Laundering further drive demand for robust security applications. With increasing investments in secure banking infrastructure and the growing adoption of remote banking services, the Security segment will remain the cornerstone of IoT applications in the financial sector, driving both innovation and sustained market growth.

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Regional Insights

Largest Region

In 2024, North America firmly established itself as the leading region in the Global IoT in Banking and Financial Services market. This dominance is driven by the region’s early adoption of advanced technologies, robust financial infrastructure, and a strong ecosystem of fintech companies. Major financial institutions in the U.S. and Canada continue to invest in IoT-enabled solutions to enhance customer experience, streamline operations, and strengthen security measures.

The integration of IoT in banking across North America has led to improved data collection and analytics, enabling personalized financial services and real-time decision-making. Smart ATMs, connected branches, and wearable payment devices have become increasingly common, further pushing the region ahead in digital innovation. Regulatory support and cybersecurity advancements have also played key roles in encouraging IoT adoption while maintaining customer trust.

Strategic partnerships between tech giants and financial service providers have accelerated the deployment of IoT-based platforms. With a consumer base that is both tech-savvy and demanding, North America remains at the forefront of leveraging IoT to reshape the ban.

Emerging Region

South America is rapidly emerging as a significant growth region in the Global IoT in Banking and Financial Services Market. Driven by increasing digital transformation efforts, banks and financial institutions across the region are adopting IoT technologies to enhance customer engagement and operational efficiency. Countries like Brazil, Argentina, and Colombia are witnessing growing investments in smart banking infrastructure and mobile connectivity.

The rise in smartphone usage and improved internet penetration have created favorable conditions for IoT-driven financial services. From connected payment solutions to real-time fraud detection and personalized banking, IoT is helping South American institutions modernize their offerings. Additionally, fintech startups are playing a vital role in driving innovation across the region.

With government support for digital initiatives and a growing demand for convenient, secure financial services, South America is well-positioned to become a key player in the global IoT financial landscape.

Recent Developments

• In June 2025, Kigen, a global leader in eSIM and iSIM security solutions, received a strategic investment from SBI Group, one of Japan’s largest financial and investment firms. This complements existing backing from Arm Holdings and SoftBank Vision Fund 2. Recognized as Startup of the Year 2024, Kigen has led adoption of GSMA’s new eSIM standard, streamlining secure connectivity for manufacturers and accelerating IoT product development across more than 70 customers. 
• On October 24, 2024, Microsoft launched the Financial Services Industry (FSI) Landing Zone within Azure, offering a compliance-ready, infrastructure-as-code solution tailored for banking institutions. Designed to streamline the deployment of secure cloud environments, the platform enables faster integration of IoT technologies and AI-driven analytics. This strategic move reinforces Microsoft’s commitment to supporting digital transformation and regulatory alignment in the financial services sector.
• In 2024, Infosys released a report titled “AI and Automation in Financial Services,” highlighting how artificial intelligence, IoT, and robotic process automation (RPA) are converging to transform banking operations. The report outlines how these technologies streamline processes, reduce operational costs, and enhance customer experience. This initiative underscores Infosys’s strategic focus on driving digital innovation and operational efficiency within the global banking and financial services industry. 
• In its 2025 outlook, AWS highlights advancements in digital banking through its feature “Generative AI for Banking” and showcases NatWest’s deployment of AWS IoT and machine learning to deliver personalized customer experiences. The initiative emphasizes the role of IoT-enabled data insights and AI-driven analytics in scaling innovation, enhancing service personalization, and accelerating digital transformation across the financial services sector, reinforcing AWS’s leadership in cloud-based banking solutions.

Key Market Players

• Cisco Systems, Inc.
• Microsoft Corporation
• Oracle Corporation
• IBM Corporation
• Amazon.com, Inc.
• Infosys Limited
• Accenture plc
• SAP SE

Report Scope:

In this report, the Global IoT in Banking and Financial Services Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• IoT in Banking and Financial Services Market, By Component:

o   Hardware

o   Software

o   Services  

• IoT in Banking and Financial Services Market, By Application:

o   Security

o   Customer Experience Management

o   Monitoring

o   Data Management

o   Others

• IoT in Banking and Financial Services Market, By End Use:

o   Banking

o   Insurance

o   Others

• IoT in Banking and Financial Services Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   Asia Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

o   South America

§  Brazil

§  Colombia

§  Argentina

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global IoT in Banking and Financial Services Market.

Available Customizations:

Global IoT in Banking and Financial Services Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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