Insurtech has evolved and diversified itself into its most updated version every time. From manual paperwork to digital documentation, customised policies for type of insurance provided by the company and to control the loops of this process through AI (Artificial intelligence). The highest leap has been noticed after the pandemic era and still folding.
Here are the Top 10 Tech trends that are likely to build and shape the industry in the coming years.
1. Mainstream Adoption of Central Bank Digital Currencies (CBDCs)
Several countries are planning to opt for the idea of making digital versions of their money called CBDCs. By 2024, it’s likely that some countries will have already started and finished this process of digitalising their finance which will make transactions of currencies easier, lower the cost of these transactions, and help more people who don’t have a bank account to join the financial system and moving towards cashless investment.
2. Decentralised Finance (DeFi) Goes Mainstream
More and more, we’ll see the growth of decentralised finance (DeFi) curve plotted with market growth. This will let people use financial services without the usual middlemen. Through this, projects will get better leverage and start offering more advanced things like loans, borrowing, and insurance to the policyholders.
3. AI-Driven Personalised Financial Services
As already mentioned above, when artificial intelligence and data analytics get better, financial services will become super personalised leading to higher customization. FinTech companies will use smart computer programs to study how each person spends money, their risk level, and how they like to invest. Therefore, this will be more like a personal financial platform designed for an individual. Thus, it will also offer specific suggestions for budgeting, saving, and investing that match each person’s preferences.
4. Quantum Computing Revolutionises Financial Modeling
Quantum computing, with its extraordinary ability to solve complex problems, is set to make a big difference in finance. By 2024, we anticipate that major financial institutions will start using quantum computing for things like understanding risks, optimising investment portfolios, and catching fraud. This technology is going to completely change how financial data is handled and studied. Thus, it will suggest a preview of a certain task performed on the market insight and to what conclusions it may lead to.
5. Enhanced Security & Authentication Measures
With more and more financial transactions happening online, having strong security is crucial to avoid any fraud or unwanted transaction. Biometric methods, such as facial recognition and fingerprint scanning, will become more common.
These methods provide a secure and easy way for people to get into their financial accounts and do transactions safely and efficiently.
6. Rise of Embedded Finance
In the coming year, embedded finance, or embedded banking, will grow on higher peak. Thus, companies not in finance, like online shopping sites, ride services, and social media, will include banking services right on their platforms. This way, users can do money stuff easily without switching to other apps.
7. Tokenisation of Assets
Thanks to blockchain tech, turning things like real estate, art, and other not-easy-to-sell stuff into digital tokens (asset tokenisation) will keep getting more popular. This makes it possible for more people to own a customised part of these things and move them around more easily. By letting more folks invest, it opens up new chances for different kinds of investors to explore.
8. Regulatory Evolution & Collaboration
The people in charge of making rules (regulatory bodies) will change their ways to keep up with the fast-moving FinTech world. They’ll encourage new ideas while still making sure people are safe and the money system stays strong with a confined plus regular rules to be followed.
FinTech companies and the rule makers will work more together, making rules that help and change as things in FinTech change making a friendlier and more flexible set of rules.
9. Expansion of Open Banking Ecosystems
Open banking, where banks and approved FinTech companies share data securely, will get even bigger. By 2024, these open banking systems will be well-established, giving people more power over their money info and letting them use lots of new financial things.
10. Green FinTech & Sustainable Investments
As more people care about climate change and the environment, FinTech solutions focused on being eco-friendly will pop up for driving to the journey of same. FinTech services will start to include things like environmental, social, and governance (ESG) factors in how they suggest investments. This way, people can choose investments that are good for the planet & make a positive impact on the awareness towards this critical issue ongoing currently.
Nevertheless, The financial technology world is about to evolve and experience growth in the upcoming big year, and technology is a key player in changing how money services work. The predictions we talked about give us an idea of what might happen in 2024 and affect the market by the factors that can do a change in Insurtech industries.