The role of the Internet of Things (IoT) in FinTech promises to shake things up for the banking industry, how we bank, pay for things and handle our money. Before we explore how all these things will happen, let’s take a quick look at what we mean but IoT and FinTech.


  • IoT IoT is the network of physical devices, commonly called “things,” equipped with sensors, software, and other technologies. These elements enable these objects to connect and share data with other devices and systems through the internet.


  • FinTechFinancial technology or FinTech uses innovative technologies designed to enhance and automate the provision and utilisation of financial services. FinTech aims to assist companies, business owners, and consumers to more effectively manage their financial operations, processes, and overall lifestyles. FinTech incorporates specialised software and algorithms that operate on both computers and smartphones.


The partnership between IoT and Fintech means we have entered a new era of digital currency, simplifying money transfers and sidelining the need for physical cash. This technological synergy is accelerating operations, refining service delivery, and enhancing our overall customer experiences in the finance sector.




Any IoT ecosystem has these four key components


  • Devices – IoT devices can collect data or perform specific actions based on the received data.
  • Connectivity – IoT relies on Wi-Fi, Bluetooth, or cellular networks, to transmit and receive data efficiently.
  • Data – IoT devices capture data using sensors which is then transmitted to cloud storage for processing and analysis.
  • Applications – Data analytics applications and machine learning algorithms process and interpret the collected data.


Any integration of IoT in Fintech typically optimises the use of these components to improve services and products. FinTech startups, SMEs and corporate banks alike have to establish comprehensive security protocols to safeguard IoT devices, networks, and data against cybercrime. They also have to comply with privacy regulations and incorporate measures such as encryption, authentication, and access control for enhanced protection.




Here we look at for ways that IoT has been integrated into FinTech:


Cashless payments – Traditional cash transactions are a thing of the past, and even credit/debit cards are on the verge of obsolescence. The widespread adoption of IoT wearable payment systems means we can make direct payments through wristbands, watches, smart clothing, jewellery, and other connected devices. The key players in the IoT payments market are Apple Pay, Mastercard, Visa, PayPal, Stripe and Google Pay.

Informed financial decisions – Wearable IoT devices, like smartwatches, are equipped to respond to users’ financial metrics, including balances, overdrafts, spending patterns, and potential fraudulent withdrawal attempts. Leveraging data analytics, these smartwatches offer real-time insights into spending behaviour, such as monthly expenditure summaries, spending trends, and alerts for surpassing predefined limits. This functionality empowers users to keep a close eye on their spending habits, enabling them to make informed financial decisions based on timely and accurate information.

Enhanced security – In the banking sector, the fusion of IoT and biometrics has significantly strengthened security and authentication models. Clients can now effortlessly access their IoT-enabled mobile apps, conduct transactions, and more, all with the simplicity of using their fingerprint or a selfie. An exemplary illustration of IoT wearable technology is the Nymi smart wristband. This innovative product employs the analysis and recording of users’ heartbeats as a biometric authentication method.

AR and IoT – IoT devices capture data from the physical world, and Augmented Reality (AR) devices process external data and offer better solutions to enhance the physical environment. In FinTech, the integration of AR and IoT can revolutionise data collection, visualisation, and navigation. The combination of software and wearable payment devices plays a pivotal role in automating processes and minimising manual input. This not only streamlines payment procedures but also enhances customer satisfaction by providing efficient services. Clients can interact seamlessly with machinery, ensuring a level of satisfaction that contributes to loyalty and repeat business. In essence, the implementation of AR and IoT technologies in FinTech results in cost reduction, increased profitability, and an elevated customer experience.




Not to flog a dead horse, but the benefits of using IoT for FinTech hold their own. Here are a few to take note of:


  • data-driven insights
  • improved customer experience and financial habits
  • improved credit card experience
  • improved risk management
  • personalised marketing
  • fraud prevention and security


IoT technologies also mean that FinTech companies can offer an expanded range of services beyond banking.




Nothing is perfect, even in a perfect world. IoT also comes with some serious challenges for the FinTech industry and here are the big three:


Data storage and analytics – Banks and FinTech companies need to cultivate robust data storage and processing capabilities to effectively manage the substantial volumes of data generated by IoT devices.

Scalability and infrastructure – Financial institutions must make substantial investments in robust network infrastructure, cloud computing capabilities, and data centres to accommodate the expanding IoT ecosystem. Scaling up the infrastructure while ensuring optimal performance, security, and reliability poses a challenge, needing careful planning and strategic investment.

Cybercrime – The expansive network of devices and software of IoT brings with it an increased risk of hacking. The issues of safety and confidentiality are critical to ensure security.




Forging ahead with IoT is one thing, but the financial services industry at times has come under fire for being greedy and not being socially responsible or failing to implement sustainability programmes that support environmental preservation. Typically, being socially responsible encompasses sustainable programmes, social value, corporate social responsibility (CSR), privacy, identity and data protection, circular economy, diversity, unconscious bias and equality, and much more. Despite negative perceptions, UK-based FinTechs are having a considerable positive impact by providing more accessible financial services, such as innovative lending products and youth banking services. In addition, over a third (36%) of UK FinTechs are offering products and services that support peace, justice, and accountability, for example, data security and compliance platforms. Many startups are also using IoT which is in line with current sustainability strategies. On 10 January, Zhero’s Head of R&D, and Professor of Security Engineering, City, University of London, Raj Muttukrishnan, put the question of socially responsible FinTech out there. Raj was a keynote at the 5th National Symposium on Developing Socially Responsible Professionals and introduced the debate “Could the FinTech sector deliver Social Value in the UK?” Interesting and persuasive arguments from both sides.




IoT in the FinTech world is poised for substantial growth in the foreseeable future, driven by the increasing demand for digital banking services and advanced security measures. Embracing IoT technology enables service providers to offer customers a more personalised and convenient experience, granting them access to their accounts and facilitating transactions from anywhere at any time.



Whatever the future holds for IoT and FinTech, there are some things that will always remain unchanged – cybersecurity, data protection and consumer privacy, and legislative compliance. Izak Oosthuizen has been in the cybersecurity business since 2006 and is known to many leaders as the “cybersecurity and IT sage.” If you are thirsty to find out more about IoT and cybersecurity, an excellent place to start is Izak’s brand-new international bestseller. You Don’t Need a £1 Million Cybersecurity Budget is out now on Amazon. Any questions for Izak or Prof Raj? They’re both in easy reach here and now.

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