The Internet of Things (IoT) is no longer just about smart fridges or connected cars—it’s fundamentally altering how finance works for Australians. As we head through 2025, banks, insurers, and fintechs are embracing IoT to deliver better services, tighter security, and sharper insights for consumers and businesses alike. But what does this mean for your wallet, your business, or your next insurance policy?
IoT and the New Age of Smart Banking
Australia’s major banks are leading a quiet revolution. With the rollout of IoT-enabled devices—from wearable payment bands to connected home sensors—customers are experiencing banking in ways previously unimaginable.
- Personalised financial management: IoT data from smartwatches and fitness trackers is feeding into mobile banking apps, helping users set real-time savings goals based on their activity or location.
- Enhanced security: Biometric sensors and geolocation via IoT devices mean banks can instantly detect suspicious activity, like transactions initiated outside your usual routine. In 2025, ANZ and NAB rolled out new authentication protocols using IoT-linked wearables, sharply reducing fraud attempts.
- Frictionless payments: Contactless payments are now the norm, but IoT is taking it further. Smart cars can pay for tolls and fuel automatically, while IoT-enabled vending machines accept payments without touching your phone or card.
IoT in Insurance: Real-Time Risk, Real-Time Rewards
Insurance is undergoing a seismic shift as IoT becomes part of daily life. Insurers are leveraging connected devices to assess risk dynamically, price premiums more fairly, and offer incentives for safer behaviour.
- Usage-based car insurance: Major providers such as AAMI and Youi are using telematics devices to monitor driving habits. Careful drivers, as tracked by IoT sensors, are rewarded with lower premiums. In 2025, new ASIC guidelines require insurers to be transparent about how IoT data is used in pricing models.
- Home insurance: Smart smoke detectors, water leak sensors, and security cameras can now automatically notify insurers of an incident. Claims are processed faster, and some providers offer discounts for homes equipped with certified IoT security systems.
- Health and life insurance: Wearables that track steps, heart rate, and sleep patterns are being integrated into policies. Australians who meet activity benchmarks can access premium reductions or bonus cover features.
Challenges and Compliance: Navigating the IoT Landscape
While the opportunities are vast, IoT also introduces new risks—especially around privacy, cybersecurity, and compliance. The Australian government updated its Privacy Act in 2025 to specifically address the data-sharing and consent requirements of IoT devices.
- Data protection: Financial institutions must now conduct annual IoT risk assessments and provide customers with clear opt-in choices for data sharing.
- Cybersecurity standards: APRA’s 2025 guidelines mandate multi-factor authentication and end-to-end encryption for all IoT-enabled financial services.
- Consumer empowerment: New rules give Australians the right to access, correct, or erase IoT-generated financial data held by banks or insurers.
For businesses, this means investing in secure IoT platforms and transparent data policies. For consumers, it means taking a proactive role in understanding how your connected devices are influencing your financial profile.
Real-World Examples: IoT in Action
Consider the following scenarios, now commonplace in Australia:
- A Brisbane-based small business owner uses IoT-linked inventory sensors. When stock runs low, the system automatically orders supplies and adjusts cash flow forecasts in her accounting software.
- A Melbourne family’s home insurance is reduced by 15% after installing IoT security cameras and leak detectors, with the insurer notified instantly if an incident occurs.
- A Sydney commuter’s smartwatch detects an irregular heartbeat, triggering a telehealth appointment and automatically updating their health insurer, which waives a future policy excess as part of a new wellness initiative.
What’s Next for Australians and IoT in Finance?
With IoT adoption accelerating, expect even more personalised, efficient, and secure financial products in the coming years. As regulators and providers work together to balance innovation with privacy, Australians stand to benefit from a financial ecosystem that’s smarter and more responsive than ever before.
