Published On: Mon, Feb 5th, 2018

How Promising does FinTech look to the Insurance Industry?

The FinTech sector in India has undergone a rapid makeover in the preceding year. Ground-breaking initiatives, such as the interoperability characteristic of e-wallets, Aadhar payments, and a chunk of businesses adopting the real-time payment system termed as United Payment Interface (UPI) have reinstated the commitment made by the government to pave the way for a cashless society while emphasising on making a comprehensive financial ecosystem.

The digital transformations and innovations have entered the insurance domain also. Rapid changes in consumer behaviour have led to an increased need for the insurance companies to re-structure their business models and strategies.

Loaded by the paper-based operations, traditional processes, and outdated systems, FinTech has begun making in-roads silently in the insurance domain. Although the progress is slow, insurance companies and banks continue to adopt FinTech innovations.

photo supplied, courtesy of guest blogging network

Here are a few tech trends making waves in 2018:

Digital Innovations being the Key Driver:

The FinTech industry in India is likely to enter into a merger phase compelled by the digital transformations and consumer-friendly regulations in 2018, as introduced by the government. The conventional business models are being replaced by technically-advanced communication interface in the form of chatbots. These chatbots are being compelled by the personalised data-driven methods that are expected to reconsider consumer interactions.

Social Media Marketing along with Consumer Interaction- The Crucial Component:

‘Finleap’ and ‘FinTech Marketing’ are the budding jargons in rapidly developing online forum, as the social media trends decide the customer mindset. Businesses like Policybazaar have a huge outreach of social media channels, such as Twitter, Facebook, LinkedIn, and Instagram to get across the consumers’ perspective and build an ardent customer base. These social media platforms are used by both the company and customers to interact with each other. Customers are open to share their experience on these social websites.

Also, a rising number of companies offering banking and financial services are likely to use these social media channels to enhance their retail consumer interaction and offer core services in the concurrent milieu. Social Media Marketing (SMM) will also make a key constituent of the entire marketing strategy of the FinTech firms. With the escalating abundance of social media and its increasing role in the financial inclusion, prominence of customer privacy and data security will be higher, as regulators insist on stern compliance measures.

photo/ Gerd Altmann via pixabay

Artificial Intelligence (AI) and Robotic Process Automation (RPA):

Insurance companies deal with a huge amount of rule-based and repetitive tasks with both structured and unstructured data. In such a case, Robotics Process Automation (RPA) can be of a great help. RPA can assist reduce the manual operations costs for the insurers while improving their compliance and services. As Artificial Intelligence (AI) and Robotics Process Automation (RPA) replicate human actions, the insurance firms can think of an array of software ‘robots’, as a virtual labour force that is available 24 hours a day, with a comprehensive audit and up to 100 percent accuracy. The firms can implement it as:

Standard Robotics performing functions that are done by a claim executive namely, reducing operational costs, to improve compliance and accuracy, and accelerate claims processing.

These businesses can use machine learning and implement AI to fortify their security structural design. Artificial intelligence can assist businesses to attain operational sustainability via the accurate discovery of fraudulent transactions, paving a path towards safety against any security breach in the future and keeping a sharp vigil for suspicious behaviour.

Game Changing Collaborations for FinTechs:

There is no denial of the fact that FinTechs have emerged as the key agitator and have tremendously changed the way in which the insurance and financial services industries function. Instead of being at the crossheads, insurance companies and financial institutions and FinTechs must collaborate with each other in order to leverage the capabilities of a sophisticated payment ecosystem. All the shareholders in the insurance and financial services industries need to know the fact that combining operations and synergy of the expertise between both the entities will remain at the core of improved and enhanced consumer service and engagement. In the recent years, FinTech has showcased a huge capacity to design and perform pioneer tech-based products. These products are appropriate to cater to the needs and requirements of a new generation of distinguished patrons and clientele.

In a nutshell!

Until 2017, insurance firms and banks have approached FinTech-led transformations and innovations vigilantly, more in a trial manner sooner than as an organisational precedence. However, as FinTech begins to exhibit higher value additions to insurance companies through process efficiencies, enhanced consumer experience, and cost reductions, insurers will be highly dependent on them in 2018.

Author: Vikas Singh Gusain

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photo/ Michael Jarmoluk via pixabay.com

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