Top 3 Tech Trends of 2019 For Insurance and Fintech
By: Peter Tang
2019 will be a big year for the world of insurance and FinTech (finance technology). Technology has drastically altered our way of life or the past decade and will continue to do so in many areas and industries. Insurance is traditionally a more old-fashioned industry, due to the history and inner workings of insurance companies and how they operate. FinTech introduced a new layer of depth to the insurance industry and the technological advances felt in FinTech will serve as a catalyst to push both the insurance and FinTech industries to new heights in 2019.
If you haven’t heard of Artificial Intelligence by now, do yourself a favor and watch either The Matrix (1999) or Terminator 2: Judgement Day (1991). Maybe you don’t need to take it that far, but it might help you understand the significance and impact of Artificial Intelligence, albeit fictional. Artificial Intelligence, commonly abbreviated as AI, is an element of technology that has made increased strides in recent years. With Siri and Alexa becoming household names, it is easy to find AI in ordinary life.
Artificial Intelligence, in short, is the intelligence of a machine or computer that allows it learn from persistent experience and perform tasks that you would only think a human could do such as translation, speech recognition, or learning languages. There are many forms of Artificial Intelligence. One of the most applicable forms of AI to insurance and FinTech is the chatbot. A chatbot is a computer program that is designed to conversate with a human user. Essentially what the chatbot can do is replicate the experience of talking to a human in an online chat.
The chatbot, relevant to insurance and FinTech, will be able to provide specific answers to customers, retrieve and display records of payment information, schedule appointments with real-life brokers and analysts, and much more. Alternatively, a chatbot can tailor specific answers and results and based on the geographic location or insurance record of the customer, and pair a suitable broker or insurance company. The customer receives a customized experience and the broker gets a suitable client that requires less screening and introduction. It’s a win-win situation for both parties, mediated with the help of artificial intelligence.
Blockchain technology is all the rage right now. Minor correction. It was all the rage for several months at the end of 2017 and towards the beginning of 2018. During this period of time, Bitcoin saw its value increase to $20,000 USD, an all-time high. Other popular cryptocurrencies such as Ethereum and Litecoin noticed a substantial increase in value as well but has these values have since dropped as dramatically as they rose. Nonetheless, through the rise of cryptocurrencies, the general public was formally introduced to blockchain technology, its many uses and benefits, and its diverse application towards different industries beyond finance and banking.
The nature of blockchain technology is what makes it so applicable to insurance, FinTech, and many other industries. In short, blockchain technology works by utilizing a network of computers, referred to as nodes in the world of the blockchain, for security, verification, storing records, and transmitting transactions, data, and information.
Each transaction over the blockchain network generates a long string of unique random numbers and letters called the hash. The hash is verified by several nodes before it is approved and written to a block. A block contains a string of hashes and relies on the previous blocks for legitimacy. The block and all previous blocks make up the blockchain, the blockchain is stored on multiple nodes, and once a block is created it cannot be altered.
The reality of not being able to alter a block without having to alter all other copies on different computers makes blockchain technology incredibly difficult and near impossible to tamper. Insurance and FinTech are all about security, handling private and sensitive customer information, and transactions of data and currency. What better way to ensure the privacy and security of sensitive data than with blockchain technology?
Something to take into consideration is that with the rise of blockchain technology means more blockchain developers and ease of adaptability. As time goes on, it will only become increasingly easier for an insurance company to adapt to blockchain technology due to the wealth of resources and eager developers available. The blockchain is the near future can replace traditional paper records and expect a great shift towards paperless record keeping in insurance and FinTech in the coming decade.
The popularity of smartphone devices birthed a brand new category of hardware accessories: smartwatches. These devices that are able to give and receive calls, track heartbeats, record sleep cycles, and track number of steps and mileage in a small trendy form factor. Furthermore, there are similar devices not connected with smartphone devices called fitness trackers that operate in the same fashion, minus the phone functions such as calling and messaging. How do wearables relate to insurance and FinTech?
Insurance and FinTech go hand in hand with data. Think of the pair like peanut butter and jelly, salt and pepper, and Scooby Doo and Shaggy. Wearables are physical devices worn to track health data. Most commonly, these devices are watches that can be easily worn and are relatively unintrusive. It has become a popular practice for insurance companies to issue new policies that require the use of wearables.
First and foremost, the wearable tracks health data of the customer and this data is accessible by the insurance company for claims. Secondly, wearable promotes a healthier lifestyle for the customer. The customer can readily see his or her health data, which serves as an active and daily reminder to keep the numbers up or down, depending on the statistic. Lastly, with customers leading a healthier lifestyle, the number of insurance claims will be reduced due to fewer visits to the hospital, fewer prescriptions, or less medical fees in general.
To Infinity and Beyond
Sit back, and relax as you watch an exciting year in 2019 unfold as we are all witnesses to the great and innovative technological advances that are paving a new path in insurance and FinTech. Or you can get hands-on and involve yourself in this new wave. Play around with the various chatbots that are already available online. If you are already a developer, look into becoming a blockchain developer. Purchase a wearable (the entry-level devices are relatively inexpensive and easy on the wallet) and familiarize yourself with the hardware and software. The future of insurance and FinTech is already morphing before our very eyes. Don’t wait to catch up to the changes. Be proactive and stay ahead of the game. In the words of great Terminator, “hasta la vista baby.”