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What are the Top Emerging Technology Trends Shaping Banking & Insurance Industry in 2021 ?

Swati Rai | JAN 12, 2021

As we enter 2021 - a new year a new decade, a decade filled with new disruptions, innovation and resilience. The entire world is constantly glued into the development and distribution of novel coronavirus vaccine, a vaccine built in less than a years’ time that disrupted the medical science using new-gen technologies, there were many such latest technologies that re-shaped our 2020 and helped businesses pull off even during the complete lockdowns.

Last decade gave us some of the most dynamic and promising technologies like AI & Machine Learning, NLP, Blockchain, Cloud Computing, Data Analytics, Quantum Computing, Cyber Security to name some. Adoption of some of these technologies really sky-rocketed during Covid-19 phase.

The COVID-19 pandemic has shifted the technology innovation and investment strategies of nearly every company in the world as “unprecedented” economic and socioeconomic challenges have made it clear that IT is the lifeline for businesses during the coronavirus era, according to Gartner.

Staying ahead in today’s crowded market has become indispensable than ever before. The COVID-19 crisis has prompted businesses to adapt to a novel business model not by choice, but by necessity.

Necessity being the mother of (re)invention, the Covid-19 crisis has dramatically accelerated corporate digital transformation.

Leveraging technology can help them unlock breakthrough innovations. The progression in technology in the last couple of years has changed the world and it will continue to do so in the future. Indeed, emerging technologies like artificial intelligence, cloud computing, blockchain, and data analytics have already impacted people’s lives. So, as we are heading towards 2021, what impact such technologies will have on our daily lives and work?

Top Emerging Technology Trends Shaping Business in 2021 will be –

  • 1) Edge Computing – Considered the next wave of artificial intelligence, “edge AI” or “AI on the edge” also called as Edge Computing is a network infrastructure that makes it possible for AI algorithms to run on the edge of a network, meaning closer to or even on the devices collecting the data. Edge Computing takes the part of the intelligence from cloud and brings it to machinery. The technology can help banks and insurance players to make smart decisions in real time, locally, by using continuous learning models and machine health scores especially with chatbots or robots in BFSI for better customer experience.

  • 2) 5G - The World Economic Forum, citing IHS Markit research, expects the 5th-gen mobile network, 5G, to reach a global economic output of $13.2 trillion and generate 22.3 million jobs by 2035. By unlocking a new realm of technological possibilities, the global wireless standard is expected to notably accelerate the shift toward Industry 4.0, the industrial Internet of Things. Up to 100 times faster than 4G, 5G offers drastically reduced latency that makes it possible to share data extremely quickly, erase processing delays and ensure factory systems can react in real time.

  • 3) Smartphones equipped with powerful sensors for creating tailored product in Insurance – With 3.8 billion smartphone users expected by the end of 2021, mobile telematics takes UBI (User Based Insurance - the use of wireless devices and ‘black box’ technologies to transmit data in real time back to an organization,”) a step further, allowing insurers to use sensors and tracking technologies embedded in smartphones to collect real-time data and better understand their customers’ driving habits. Ultimately, this will give insurers the opportunity to offer more competitive and innovative behavior-based insurance programs while fostering driver safety.

  • 4) Formative AI based products and offerings in BFSI - Formative AI is a type of AI capable of dynamically changing to respond to a situation. There are a variety of types, ranging from AI that can dynamically adapt over time to technologies that can generate novel models to solve specific problems. Banks and insurance companies expect an 86% increase in AI investments by 2025, as per The Economist Intelligence Unit. Primary reason behind increased adoption of user-friendly AI platforms is that it allows business employees to quickly build models, easily understand and trust their output, and confidently make decisions will be critical in the deployment of AI at a larger scale. A top French insurer is using it to assess customers’ preferences for different products, such as pensions, retirement products or savings insurance, and provide the insurer’s advisers insight into the rationale behind the scores.

  • 5) Cybersecurity - According to Interpol, the Covid-19 crisis has created an unprecedented opportunity for cybercriminals to increase their attacks. Yet most companies overestimate their cybersecurity performance, with only 24% actually meeting the bar, according to a 2020 Bain study. Identifying common IT security weaknesses and developing cybersecurity maturity is central to building truly resilient digital organizations.

  • 6) Hyperautomation - As recent years have seen incredible growth in hyperautomation, it is a key strategic trend for 2021. The transition to robotic process automation and the increased use of this tech among businesses should drive innovation in the automation space and continue to provide enterprises value through time savings, efficiency gained, and scalability. Hyperautomation is the next level in the field of automation that is revolutionizing the banking and insurance processes like claims processing.

  • 7) Internet of Behavior - According to Gartner, the Internet of Behaviors (IoB) has ethical and societal implications relying on the goals and outcomes of individual uses. It can glean, combine and process data from different sources such as commercial customer data, citizen data processed by public-sector and government agencies, social media, public domain deployments of facial recognition, and location tracking. This can help banks and insurance to understand their TGs behavior well and then deduce the inference and create tailored products and offerings.

  • 8) AI Engineering - AI engineering makes AI a part of the mainstream DevOps process instead of a set of specialized and isolated projects. Unlike data engineers, AI engineers don’t write code to create scalable data pipelines, instead, they excerpt data efficiently from a variety of sources, build and test their machine learning models, and deploy those models using either embedded code or API calls to create AI-infused applications. Investing in an AI engineering strategy will considerably create the performance, scalability, interpretability and reliability of AI models while delivering the full value of AI investments.


Conclusion:

An important lesson 2020 has taught us and that is every business must be a digital compliant. And in the next normal, every business must be able to create value at the speed of need. The future of business will be automated and autonomous. The future of the enterprise is an autonomous enterprise. There are multiple customer case studies which there at NSEIT Case Study column on most of these new age technology, to learn more, you can visit here.


Swati Rai

Marketing Executive

Swati is a part of the Marketing Team at NSEIT - apart from managing the marketing initiatives in the organization she's skilled at market research - analysis, formulating marketing strategy and planning. She's an MBA from Welingkar Institute of Management and is also an astute reader and avid marathon runner.

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