The banking industry is considered as comparatively conservative and slow obviously it has relatively been slow in implementing technological innovations because it is not responding promptly to changes. On one side automobile, retail and other manufacturing sectors have started exploring betterment in various processes of the entire business cycle by proper utilization of IoT methodology; the industry as is still slow in implementing IoT( Internet of things) is the banking industry.

If we go in brief about IoT, it is a system of interrelated computing devices, objects, digital and mechanical machines, people or animal with unique identifiers and capacity to transfer information/data over a network without a human to the computer or human to human interaction. “IoT” is about extending the capacity/power of the internet beyond smartphones and computers to a whole range of other processes, environments, and things. Connecting things to the internet has many amazing benefits.  The Internet of Things actually means taking all the things in the world nearby or anywhere and connecting them to the internet.

To understand better we can take an example viz:-If the irrigation system is completely on IoT platform it will receive information about the weather from its internet connection, it can also access when it’s going to rain and decide whether to water the crops today or not because they’ll be watered by the rain. Information about the soil moisture, how much water is needed and how much the irrigation system is watering the crops, and how well the crops actually being grown, all such data can be collected and sent to supercomputers that run surprising algorithms that can make sense of all this gathered information. If other sensors viz light, temperature, and air quality, is added into the chain these algorithms can learn much more. With thousands and lakhs of farms all collecting this information, these algorithms can create amazing insights into how to grow best crops.

The Internet of things can, undoubtedly, drive the financial industry forward to the next level. While most of the IoT adoption scenarios in banking seem implausible and overly ambitious but, the speed of IoT development indicates that connected banking is within reach. When we think about prospects of IoT in the banking industry we can imagine some promising examples of IoT in the banking industry which may be waiting for us and maybe not too far away. Some of them are with the help of the Internet of Things, banks may get real-time financial data that facilitates and improves the quality of the decision-making process. The Internet of Things in financial services may increase the accuracy and speed of information collection and may broaden the range of available insights. Wealth management insights may be developed and IoT-enabled wealth management solutions may alert users in case their financial stability is under threat. Thus it may be helpful in the personalization of wealth management.

IoT in financial services may strengthen new forms and tools for payment – including cards related services, biometrical tokens. Devices which use smart card technology can easily surpass. ATM-based transactions.

IoT may empower wearable payment systems. Instead of compulsion to carry credit cards which can be easily lost or stolen, we may be able to pay using a simple gadget in form of even wristband. Some foreign banks have started doing such experiments for contactless payment. Such type of tools can even be used for checking balance, enquiry about payment details and credit history, so on and so forth. Thus by such way with use of IoT our payment security may increase.

IoT in future may be a regulator for safety and all payments may be controlled via a system of smart sensors and connected apps. Such use of IoT in the banking industry will allow each payment a really secured, properly monitored and technologically controlled payment transactions, it will lead to healthy & convenient Banking environment.

With the help of  IoT bank/loan providers may get detailed data on customers their credit, debt and history, asset details and their value, as well as the yield of commodities a customer produces (crucial for agriculture or allied agriculture-related companies relying on banks for loan & services).

As a result, Banks/financial institutions may have improved decision-making system for granting loans. IoT-induced transparency may offer banks some insurance as it reduces the risk of dealing with defaulters/unreliable debtors in the future.

The data, provided by IoT, may offer banks flexibility they usually struggle to provide. Loan providers/Banks may be able to customize the conditions based on customer behavioural statistics, objectives, and credit histories. Banks may also be able to estimate the value of commodities a debtor possesses with perfection and precision, which is not possible to achieve as of now.

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Capacity management in branches can also be effected and optimized with the help of the Internet of Things. It can easily help branch manager to track the number of footfall in branch premises because IoT collects, process and share data in real-time, It will be helpful in optimization of capacity management because IoT will guide how much personnel is needed to achieve peak efficiency during peak and lean hours, and what are the ways to optimize the counters.

IoT may allow Branches to predict the amount of cash that needs to be directed to cash dispensing machines at each location due to sudden increase, decrease in footfall or cash withdrawal.


IoT may help bank branches to process complex financial data using voice assistance. IoT may also help customers to access their financial accounts in real-time and check the balance of credit card too and also the status of current outstanding loans. There are some types of questions users may be able to ask a voice-assistant: What is the outstanding of my bank wallet? When my bills will become due for payment? How much is my next payment? How much I spent during a selected period of time? With the use of IoT, these questions may be replied.

IoT may even help customers/users through connected devices in cultivating positive financial habits and dealing with spending indulgence. As an example, a user has set a credit card limit; a wearable will track their spending throughout the day. As the user approaches the limit, the user will be alerted. In case a user ignores a notification, a wearable will send a shockwave to their wrist as a reminder to not spend anymore as the limit is about to exhaust.

Through the use of Internet of Things banking customer / a visitor might be able to schedule an appointment and check it with a smartphone. This way, a customer may know when it’s their turn at the counter or at the appropriate desk and may not have to wait in a queue.

On the other end, the bank may be able to store the customers visiting history, know the list of services they use as well as FAQ’S. Citibank has already enabled a Bluetooth-empowered system with IoT beacons that facilitates users to access ATMs 24/7.

The Internet of Things may help banks to become more consumer-centric expanding the range of services beyond the traditional ones. U.S Bank has started the IoT initiative that motivates its customers to stay fit. For completing achievements/set targets, users get the bonus and financial rewards.

IoT may be utilized in increasing the efficiency of branch banking. In future biometric sensors may be used to gather user data as soon as he enters the bank and alerts the main system. Smart branches will allow banks management to reduce the number of officials and maintenance costs, and create a connected communication system between branches in different locations. With the use of IoT Such a branch may be imagined where no human employees are present. A customer is being guided by connected technology and chat-bots. In the case of other need, they are able to contact a human consultant via video conference.

The Internet of Things can be used to transform the experience of ATM users by making them fully manageable via a smartphone with motion sensors; a user will be able to find the nearby ATM to their current location. In case a machine is not working, a connected sensor of bank ATM will transmit it in real-time to linked branch. This way via service provider message can easily be provided to an engineer as soon as possible and reduce machine downtime.

Thus we can say that IoT provides organisations and individuals better insight and control over most of the objects and environments that remain beyond the reach of the internet & by this way, it allows businesses and individuals to be more connected to the world around them and to do comparatively more meaningful & higher-level work. Thus someone has rightly said that IoT should stand for the “Intelligence of Things,” rather than the Internet of Things and for making banking system an intelligent system effective use of IoT is inevitable.


Written By:-

(Shakti Sinha)

Chief Manager (Training)

State Bank Institute of learning and development,


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