Technology has transformed the insurance industry in recent years. From comparison websites to data analytics, the changes have been marked. However, in a world where people want more control over their finances, insurance isn’t the only sector that’s benefited from the tech revolution. Indeed, when you survey any number of industries within financial foundations, technology has changed the game in a variety of ways.
Technology Unlocks Better Deals for Consumers
For example, prospective homeowners and those in the property market were given a reprieve in 2020 by the British government. With Chancellor Rishi Sunak eager to keep the economy afloat during trying times, he launched a stamp duty holiday from July 2020 to March 31, 2021. The stimulus initiative meant stamp duty charges were suspended on the first £500,000 of a purchase. Knowing that’s a policy is one thing but understanding what it means in context is another.
This is where online technology has been useful. The Trussle online stamp duty calculator app is a simple way for people to find out what they could save. By inputting a few variables, including price, location, and buying status, the calculator shows the amount someone will pay before and after the stamp duty holiday. This is a compact but powerful tool that not only demonstrates the power of digital technology, but leads us onto further innovations within the financial sector.
Decentralisation is Revolutionising the Financial Sector
For instance, data sharing between companies within the financial sector is set to revolutionise lending, insurance, and more. As noted in a 2020 PricewaterhouseCoopers report, decentralised asset ownerships could help create better matches between “providers and users of capital”. In some ways, this data sharing culture will eliminate the role of banks as an intermediary in certain scenarios. If we apply this to the insurance sector, data sharing could facilitate better links between insurers and consumers.
Insurance companies would be able to draw data from outside sources to better evaluate a consumer’s credentials. That, in turn, would lead to better deals for the consumer because insurers could reduce their risk by drawing on more resources to assess applicants. This doesn’t just apply in the insurance world. Any sector where companies have to evaluate financial risk could benefit from the emerging culture of data sharing noted by PricewaterhouseCoopers. Then, as we look further into the future, the role of blockchains can’t be ignored.
Adding New Blocks to Insurance and Beyond
Also noted by PricewaterhouseCoopers, blockchain technology has and will continue to reshape the way transactions are processed and recorded. The decentralised networks that power cryptocurrencies such as Bitcoin have already shown what’s possible in terms of processing data without a central authority. For insurers, it could have a variety of benefits. For example, blockchains can provide enhanced transparency which, in turn, can reduce the chances of fraud. Blockchains could also improve the processing of data by reducing duplication and ensuring all parts of the chain are consistent.
This all amounts to a much more efficient system that not only offers better protection against fraud but more reliable data. The end result is a better overall service. Of course, at this point, blockchains are a new idea within the insurance sector and the finance world at large. However, more than $1 billion has been invested in blockchain companies since 2009. That’s not only a testament to its growing significance in the industry, but another example of how technology is changing the game. Moreover, it demonstrates how the insurance industry, and those like it, have been shaped by innovations in recent decades.