SANTA CLARA, Calif., Aug. 29, 2017 /PRNewswire
Internet of Things (IoT) has remained a fledgling concept in the financial services market as the latter's complex regulatory environment often deters the adoption of technologies with vast partnership ecosystems. However, IoT's disruptive role in helping companies better understand customers and provide the right products in a timely manner has begun to attract substantial investments from the Fintech and InsurTech segments.
"The increasing application of IoT within insurance and banking services is giving rise to new data-centric business models and innovative processes that help users launch novel products and services," said Frost & Sullivan Digital Transformation Global Program Director Jean-Noël Georges. "Furthermore, the mushrooming of tech-savvy start-ups is pressuring traditional financial companies to upgrade their technologies in order to remain competitive. IoT's compelling benefits of faster claims settlement, effective underwriting and improved internal efficiency are drawing investors from across the spectrum."
Even though financial services companies are warming up to IoT, they still have misgivings about feeding sensitive data into networks with innumerable endpoints. A security breach can compromise critical customer data like addresses, card details and personal information, resulting in loss of brand value for the financial organization. Service providers than can offer a guarded infrastructure for networked smartphones, wearables and on-board diagnostic devices, are most likely to succeed in the evolving market. Furthermore, the General Data Protection Regulation (GPRD) will force financial institutions to strengthen data protection for European citizens to be compliant with the new regulation by May 2018.
In due course, banks are expected to reduce the number of physical branches and increase the number of digital branches, creating more opportunities for the implementation of IoT.
Source: Frost & Sullivan
Illustration Photo: Fintech payment system (credits: Aaron Yoo / Flickr Creative Commons Attribution-NoDerivs 2.0 Generic (CC BY-ND 2.0))