The top banking institutions may develop a strategic approach, such as the development of smartphone payment technologies, to deal with competition from fintech platforms during the forecast period. Banks may choose to partner with technology providers in an age when smartphone technologies and widespread online connectivity have empowered consumers to pursue their own information searches rather than solicit services from intermediaries. Customers can access the cloud, scan barcodes, and use Bluetooth-enabled electronic wallets using smartphones and connected tablet devices. The diversity of electronic technologies has created many payment options, such as bitcoins (virtual currency) and Amazon coins. In addition, customers are using social network platforms to search, share, and validate alternative resources to traditional financing. This creates an environment for new forms of online financial solutions. Such factors of the adoption of IoT technologies and digital wallets are expected to drive the growth of the market during the forecast period.34% of the market’s growth will originate from North America for IoT in banking and financial services market. The US is a key market for IoT in banking and financial services in North America. Market growth in this region will be faster than the growth of the market in South America. The increasing adoption of IoT devices will facilitate the IoT in banking and financial services market growth in North America over the forecast period. IoT in banking and financial services market is expected to grow by USD 7.63 million from 2021 to 2026 at a CAGR of 7.91%.
Payment service providers gather personal data and information about customers so that they can customize advertising messages and target key audiences. Such practices help service providers collect data on customer profiling, behavior, and data mining. However, the indiscriminate use of this data can infringe on customer privacy. Location-based services also have privacy concerns because such offerings and services operate based on real-time, geo-based information. The data collected from smartphone devices is processed and stored by vendors and so remains open to abuse. As smartphones are used in monetary transactions in real-time, data theft (which is common in the virtual world) can lead to financial losses for consumers and may cause a loss of reputation for service providers. Such risks make consumers averse to online transactions and pose a potential threat to the market for IoT platforms. Hence, the rising risk related to privacy and security concerns in the financial industry will hamper the growth of the IoT in the banking and financial services market during the forecast period.