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.
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 offers use cases, highlights the drivers and challenges of IoT adoption, the role of stakeholders in the IoT ecosystem and ways in which insurance companies are changing their business models after adopting IoT solutions.
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"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.
"IoT will find greater acceptance among financial services companies once stakeholders collaborate with technology providers along the value chain," noted Georges. "This will enable extensive and deeper testing on the impact of IoT technologies and boost the number of relevant use cases. Additionally, artificial intelligence and machine learning will complement IoT implementation in banks by offering transparency and key insights into real-time data."
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.
Global IoT in Financial Services Market, 2017 is part of the Digital Identification team's Growth Partnership Subscription.
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Global IoT in Financial Services Market, 2017
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SOURCE Frost & Sullivan