A Secure IoT-Enabled Banking Authentication Framework Integrating Aadhaar, Biometrics, Artificial Intelligence and Blockchain

Abstract

The rapid evolution of digital banking has transformed financial services by enabling customers to perform secure and convenient transactions through online banking platforms, mobile applications, Automated Teller Machines (ATMs), and Internet of Things (IoT)-enabled banking devices. However, the increasing dependence on digital financial services has also exposed banking institutions to sophisticated cyber threats, including identity theft, phishing attacks, credential compromise, insider attacks, biometric spoofing, malware, and financial fraud. Conventional authentication techniques based on passwords, Personal Identification Numbers (PINs), and One-Time Passwords (OTPs) are no longer sufficient to defend against these evolving security challenges.
This paper proposes a secure multi-layered banking authentication framework that integrates Aadhaar-based identity verification, biometric authentication, Artificial Intelligence (AI)-based fraud detection, blockchain-enabled transaction validation, and IoT-assisted security monitoring. The proposed framework employs fingerprint and facial biometrics as primary authentication factors, while Aadhaar-based verification establishes trusted user identity. Artificial Intelligence continuously analyses user behaviour, transaction history, device characteristics, and geolocation information to identify suspicious activities in real time. Blockchain technology provides immutable authentication logs and transaction records, preventing unauthorized modifications and ensuring data integrity. IoT-enabled banking devices further strengthen security by continuously monitoring device status, environmental conditions, and transaction endpoints.
The proposed framework offers a comprehensive authentication architecture capable of improving transaction security, reducing identity fraud, enhancing customer trust, and supporting secure digital banking services. Furthermore, the framework addresses several limitations of existing authentication models by combining multiple complementary security mechanisms into a unified architecture. The proposed model can assist banking institutions in implementing next-generation authentication systems capable of adapting to evolving cyber threats while maintaining user convenience and regulatory compliance.