Natalie Monko Lead Project Manager

    IoT in Financial Services: How it Works to Maximum Effect

    The swift development of the fintech industry is particularly noticeable in how the use of IoT in financial services has expanded recently. By 2025, the number of connected items, from household appliances to wearables, is expected to reach 75 billion. The Internet of Things offers financial enterprises comprehensive insights and new possibilities in the fields of personalization, automation, and cybersecurity. In the article, we’ll explore the capabilities of IoT and its notable practical appliances in finance.

    Surf has 12 years of experience in banking and fintech development

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    Benefits of using IoT in finance

    Financial services always strive to be at the forefront of technological advancements and the emergence of IoT has opened up many new opportunities. It affects such aspects of financial enterprises as personalization of customer experience, data gathering, and analysis, as well as decision-making speed and accuracy.

    Improved & personalized customer experience

    Today, any marketing effort is likely to be in vain without a sufficient level of personalization. It is a key priority to provide customers with financial products and services tailored to their needs and preferences. This can be done by enabling payment patterns that fit an individual’s lifestyle in the best way possible. Also, the data gathered by IoT solutions covers an extensive spectrum of activities, which helps with the development of targeted offers and maintaining high demand.

    An award-winning banking app development project by Surf is an example of such personalization. The app monitors users’ spending on certain categories and, after a certain threshold, provides an increased cashback rate and the ability to choose an additional category to earn it from.

    family banking app

    Automation and efficient processing

    IoT-powered systems are capable of conducting multiple processes, such as data analysis and information exchange, automatically. It allows complete exclusion of human involvement from repetitive procedures or those that require simultaneous processing of multiple data streams. Consequently, such automation ensures the absence of human errors and lets employees focus on solving complex tasks instead of routine ones.

    Enhanced security

    The importance of cybersecurity for the sector of finance is obvious. Here, IoT opens entirely new possibilities in protecting the physical assets of banks and institutions. At the same time, the technology has enabled numerous novel ways of user identification, such as voice and retinal scans, that grant users access to financial services conveniently, while detecting and preventing cyber fraud and security breaches.

    Better decision-making

    Many choices of financial enterprises, such as marketing activity, provided services, and investment advice, are based on extensive and accurate data. With IoT, banks and financial institutions can collect real-time data and analyze it to make informed decisions. An example of such usage is the analysis of the patterns of ATM usage, which helps banks to determine locations for placing new machines. In general, Internet of Things solutions provide valuable insights into every stage of the customer journey, which helps to make decisions aimed at increasing profitability, fulfilling customer demands, and enhancing satisfaction rate.

    Applications for finance organizations by Surf

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    IoT in banking and retail: use cases

    Let’s take a look at some of the most prominent practical appliances of the Internet of Things technology in finance. 

    One-touch contactless payments

    Payments through contactless methods have seen rapid development, especially as wearable and other IoT banking solutions made it possible to make cashless payments without the need to carry around plastic cards. A wide range of wearable devices, including watches, fitness trackers, wristbands, and jewelry, now support payment functions, speeding up checkout and reducing queues. 

    QR code payments, such as the one implemented by Surf in a mobile banking solution, are gaining more traction. The feature allows users to pay for utilities, share a dinner bill with friends or do grocery shopping faster and securely.

    multibanking app

    Even more extraordinary are solutions that allow shopping via home appliances. For example,  voice banking software by NatWest allows users to inquire about recent transactions, balance, and so on via any Google Assistant smart speaker. Also, Amazon has been reported working on a smart fridge solution that tracks what’s inside and, when a user runs low on a particular grocery item, orders them automatically via Amazon Fresh platform.


    With IoT services, finance organizations can effectively log all incoming and outcoming transactions in real time. This helps account departments to monitor personnel and audit trails, which, among other things, is essential for detecting any unusual patterns and preventing fraud. Such tracking solutions simplify the accounting process, reduce manual labor, and minimize the risks of errors.

    Increased ATM efficiency

    Embracing IoT technologies allows banks to enhance their ATM operation by analyzing usage patterns, preventing fraud attempts, and making data-driven choices about installing new machines. Real-time monitoring of operations, cash shortages, light levels and motion makes customer experience more pleasant, as well as enhances the protection against skimming devices and other manipulations. Also, the usage of Bluetooth beacons on smartphones to use ATMs has appeared as a new way to interact with machines.

    Insurance calculation

    Another application of the Internet of Things in financial services is the usage of car and smartphone sensors to monitor driving patterns and mileage. This helps to offer optimized and personalized car insurance policies. For example, a UK-based company By Miles provides per-mile insurance plans based on a client’s driving behavior. Additionally, the company streamlines the claiming process by allowing claim submission via a mobile app.

    miles app

    Summing things up

    The integration of IoT in financial services revolutionizes the way companies conduct their business, streamlining daily operations, gaining new perspectives on users’ behavior, and enhancing customer experience. Ultimately, by delivering higher client satisfaction rates and cutting unnecessary expenses, innovative solutions, such as contactless payments, smart insurance, ATM maintenance, and others, make businesses more sustainable and profitable.