IoT’s Potential Tranformation of Financial Services Market Attracts Investments
Written By: Stratton Report
August 29, 2017
On Aug. 29, 2017, Internet of Things remains 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 apparently attracted substantial investments from the Fintech and InsurTech segments.
Frost & Sullivan’s new analysis, Global IoT in Financial Services Market, 2017, shares insight on IoT adoption trends amongst banks and insurance companies. The study also reveals use cases, highlights the drivers and challenges of IoT adoption, the role of stakeholders in the IoT ecosystem and ways in which insurance companies could change their business models after adopting IoT solutions.
Frost & Sullivan Digital Transformation Global Program Director Jean-Noël Georges noted,
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. 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.
Financial services companies are assuming to warm up to IoT, however 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.
In due course, banks will be expected to reduce the number of physical branches and increase the number of digital branches, creating more opportunities for the implementation of IoT.