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FinTech Driven Advancements in Insurance

FinTech, or Financial Technology, is the concept by which businesses utilise modern technology such as mobile banking, cloud computing, biometric security and others, to offer efficient and on-demand financial services to their customers.

Ever since the launch of smartphones, growth in mobile financial transactions has been substantial. The biggest impact is easily seen in utility bill payments, peer-to-peer money transfer and e-commerce segments. According to a recent study, the FinTech vertical has over 500 startups in India. These new businesses have amassed over $1.4 Billion in funding since 2012.

In a consumer-centric business environment, traditional business models which are still massively human-dependent for critical transactional and operational processes are struggling to keep up with more modern establishments which are embracing technology to streamline customer service and product delivery. These companies are hence attracting a bulk of the recent venture investments. Over 47 deals amounting to $954 million were made in the fintech space last year alone. In the first quarter of 2016, the FinTech industry had already achieved success in 46 new deals with a valuation of almost $2856 million.

Neha Punater, a partner at KPMG India (a Big Four auditor firm), says that "the global investment in fintech ventures has tripled to $12.21 billion in 2015 from $4.05 billion in 2014 with over 12,000 start-ups emerging globally. P2P (peer-to-peer) funding, online lending, sourcing and m-wallets were the main areas, attracting more than 50% of the investments in 2015.”.

At the moment, perhaps the biggest change businesses are emphasising on is the creation and implementation of new technologies and business models that can lower cost and increase sales. New products and services are being designed and developed to meet customer expectations in different financial verticals. With these advancements and change in business priorities, FinTech has completely transformed the business landscape of the country. Some of the categories where its mark can is seen are:


Online Payments


With increasing internet penetration, falling cost of data plans and popularity of high-speed internet capable mobile handsets, e-commerce has seen an unprecedented boom in the country. The millennial generation has specifically spearheaded this revolution.

The system involves monetary transactions with secure and encrypted technology for the smooth and safe transfer of funds. This real-time transfer of money across different banks and branches through a protected network has made an entire nation's population comfortable with buying not only online but also on the go via mobile.

E-payment is one of the most successful uses of technology in the financial front. Most consumers now prefer to pay utility bills, school fees, booking tickets and retail payment through online payments. Another payment category that has gained market space in India is the concept of mobile wallets. E-wallet technology companies have started to make a place for themselves in the market.

Payment service providers are continuously focusing on building newer technologies like one-touch payments instead of multiple registration and transaction steps. Biometric security and authentication are making personal finance ever more personal and convenient.


Lending Industry

Since the financial crisis of 2008, the lending industry and banks have brought out some significant changes in the way they operate, and FinTech has been a principal proprietor in these changes. The focus of these industries has been towards enabling instant loan disbursals with minimal documentation, fraud detection, and peer-to-peer.

The year 2016 has witnessed the launch of around 20 new digital peer-to-peer lending companies which, in their variations, all provide a platform that acts as a third party and validates borrower’s and lender's credentials. Such platforms use FinTech to not just facilitate easy transactions, but also to conduct detailed credit risk analysis of borrowers.


The insurance sector is an important vertical in the commercial segment that has until very recently, been threading on legacy systems. The products and offerings in this area are expensive and, hence, mostly opted by the higher-income level sections.

Insights from a survey conducted by PwC (PricewaterhouseCoopers) say that almost 50% of insurers and wealth management financiers are of the opinion that the insurance and asset management sectors are the most complex and disturbed. 74% of insurance companies consider that, in future, the insurance industry will be the most disrupted one.

This disruption, in a sense, has come early in the form of FinTech. The revolution has not only been in the delivery segment. Financial Technology has opened up a whole new class of potential clients for insurance companies who are targeting small startups and customising insurance schemes that better fit small teams with high investment potential.

Insurance companies are now designing dynamic models for premium payment and insurance recovery. They have started to break the conventional business processes and have instead started leveraging technologies like data analytics and biometric identification to better their product, sales and marketing flows.

Some real, process-oriented user experiences, like being able to upload documents and filling online forms or paying premiums online, have improved user experiences and customer satisfaction across all business sectors. For instance, car insurance companies’ implementation of technology where an insurer can send an instant copy of driving license and vehicle identification number (VIN) for an online premium payment from the comfort of their homes is a very convenient feature that can potentially be the decision-making point in a buyer's journey.

Such improvement in operational processes is extremely beneficial for businesses of any kind and helps to build a good rapport with the customer.

A report by BCG Google claims that non-life insurance industries, like for cars, houses, or other properties, are expected to grow at a rate of 3-3.5x to Rs. 230K crores in the coming years. Any purchase of online policy makes a good impact during premium renewal and plan closure or final withdrawing process.


In a gist


The entire gamut of business, starting from customer needs to creation and supply of new products, has changed. With the FinTech involvement, it is now a lot simpler to perform risk assessment and create products with an emphasis on low acquisition costs, discounts, reward systems, and self-directed services.

Research shows that the yearly investment in InsurTech start-ups has risen rapidly over the past couple of years. A cumulative funding of FinTechs has reached $3.4 billion since 2010, based on companies followed in the PwC’s DeNovo platform.

It can be said that the global insurance sector is growing at quite a steady pace. The insurance market will very soon transform into a different platform that will be mostly online, where consumers will have access to a wide range of products and services as per their requirement, with better knowledge and awareness of their insurance plans and policies. FinTech will drive the insurance industry into a new era.


Written for BankBazaar

Devangana Debnath

Content Marketer, Writer, Founder of

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