Banking operations are susceptible and need to be done prudently. There are a lot of banks around the world that have made up the banking tone there. The global retail banking market size was USD 2.08 trillion in 2023, accounted for USD 2.21 trillion in 2024, and is expected to reach around USD 3.97 trillion by 2034, expanding at a CAGR of 6% from 2024 to 2034. You can say that most businesses, industries, and sectors are dependent upon the bank for taking loans, investments, or any other finance-related operations.
Banking operations are not as much as only bank-specific economic activities that entail providing specialized financial services to recipients (bank clients or other third parties) in exchange for payment and accordance with a client agreement. As operations are totally for financial transactions, a small mistake can cost a lot. Many frauds are happening around the world to the banking sectors that cannot be detected in the initial stage. IT Solutions Revolutionizing Banking Operations are crucial in addressing these challenges. Card-related issues, unsatisfied customer support, slow processing of transactions, etc., are issues that banks are facing regularly.
How IoT Solutions are Transforming Banking Operations
To solve these banking operation-related issues, many technologies have been integrated into the banking sector. Internet of Things solution is one among them. IoT technology has established a well-reputed market size overall in the globe as the global Internet of Things (IoT) Market size reached US$ 64.8 Billion in 2024. Looking forward, expect the market to reach US$ 153.2 Billion by 2029, exhibiting a growth rate (CAGR) of 18.8% during 2024-2029. This is the total domination of IoT technology in many industries. So for banking operations, there is an option for customized IoT solutions. Custom IoT solutions generally refer to a specific operation related to IoT solutions. Many banks have integrated customized IoT solutions and are getting a lot of benefits.
Based on industry statistics, IoT in the banking and finance market is projected to undergo a significant compound annual growth rate (CAGR) of 50.1% between the years 2023 and 2030. This transformation has empowered the BFSI industry to leverage IoT-enabled devices and networks that reshaped traditional banking practices. The software can be used to manage time-consuming and repetitive procedures like data entry, payment processing, account opening, and more when using a tailored IoT solution for banking operations.
In this article, we will see the role of customized IoT solutions for streamlining banking operations. We will see other additional details like benefits, challenges, etc and in the end, give our conclusion on this topic.
What are Customized IoT Solutions for Banking Operations?
IoT solutions generally refer to the software applications that utilize data obtained from the Internet of Things (IoT). Many organizations develop their IoT-based software or solutions for specific tasks, this type of IoT solutions is said to be customized IoT solutions. Sensors, cameras, and other Internet of Things (IoT)-based devices enable banks to monitor and maintain the security of their ATMs. To enhance customer experience, banks also utilize IoT technologies to monitor how clients use their services in branches. IoT also makes it possible for intelligent ATMs and other gadgets to communicate real-time data to banks, allowing them to effectively monitor maintenance requirements and cash flow.
Also Read: Benefits of Financial Automation Software For Banking
Benefits of Customized IoT Solutions to Streamline Banking Operations
There are a lot of benefits of customized IoT solutions for streamlining banking operations as here are a few key benefits mentioned below.
Real-Time Data Analysis
Real-time data analysis is a very beneficial aspect of IoT for the banking industry. It can be very crucial for customer accounts and transactions. This enables banks to dynamically evaluate the needs of their clients at any time or place. For example, banks could determine how long a consumer will have to wait in line or even notify customers when their account balance is about to go negative.
Personalized Customer Service
In the digital world, customers are doing online transactions a lot regularly. Banks can provide each consumer with individualized services based on their transaction history by utilizing data from mobile applications, the Internet, and other platforms where transactions take place. Financial counseling and customized budgeting are two examples of these individualized services.
Card Free Transactions
Contactless payment is another incredible benefit of customized IoT solutions. During the pandemic, contactless payment with the help of customized IoT solutions was a very important aspect that reduced the chance of spreading viruses. There is no need for debit cards and debit cards as payments can be made using mobile phones.
Fraud Prevention
There is a lot of fraud happening regularly in the banking industry around the world. Customized IoT-based solutions can be an important factor in reducing fraud in the banking industry and enhancing security. Specialized IoT solutions founded on security around transactions have already been improved by smart gadgets; for instance, mobile phones now demand biometric authentication to complete a transaction. A further technique is texting an authentication number to consumers’ phones, which they need to enter to validate their online purchases.
Smart Insurance
IoT customized solutions-based devices keep an eye on insured assets’ condition and notify insurance firms of any deviations, allowing for prompt risk mitigation. Insurance companies can forecast possible incidents and create preventive measures with the use of the data obtained. In this way, an insurer can reduce the frequency of insurance claims and avoid fraud by identifying impending asset breakdown and informing the policyholder before any damage happens.
Also Read: Cloud-Based Fraud Prevention Solutions for Banking Industry
Challenges with Customized IoT Solutions
We have seen a lot of benefits of customized IoT solutions for banking operations but there are some potential challenges too. Here are a few key challenges mentioned below.
- IoT devices often collect and transmit sensitive data, which can be at risk if not properly secured. So this could be a potential challenge regarding privacy and security.
- Information overload can be a challenging situation as the system only can handle a certain amount of data. More pressure on data can result in a crash of the system and malfunction of the system.
- The cost of implementation or development of customized IoT solutions can be too costly. Many banks do have not enough potential to bear the expenses so they cannot take advantage of this wonderful technology.
Also Read: Digital Transformation in Banking: Benefits and Examples
Final Words
The Internet of Things (IoT) is one of the dozens of technologies that have the potential to revolutionize the banking industry. Customized IoT solutions can bring new security levels, automate processes, and improve customer experience all of which have the potential to drastically change the industry landscape. IoT isn’t simply a fad; rather, it’s a crucial element that has the potential to completely transform the banking industry, as seen by its uses in asset management, real-time data analytics, and smart banking. Overall, there are a lot of benefits of customized IoT solutions and a few potential challenges that should be overcome with the development and advancement of this technology.
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