From the palm of our hands, we all live more efficient, cost-effective and comfortable lives, all due to advanced technology. No more going on vacation and sweating that you forgot to turn down the AC. Even your refrigerator can now tell you when it’s time to get more milk. The list goes on.
So how will further technology advancements in the internet of things, big data, blockchain and artificial intelligence anticipate your needs in the near-term future, all while improving one of the most mundane things in your life—insurance? If you’ve ever had water in your basement, the following example from Jack Weekes, Head of Innovation at State Farm, will resonate.
It’s been a soggy spring and your pipes and pumps have been working overtime to keep up. You know there’s always a risk of your sump pump failing or a pipe breaking, but what are you supposed to do? Babysit your sump pump all day? What if, instead, you could place a tiny sensor on your sump pump or your home water pipes that would alert you and your insurance company when things are about to fail? Such real-time, actionable information could spare you a lot of headache, save you lots of money and save your insurance companies millions in annual losses. Such technologies could potentially drive down premiums and provide interesting new insurance policy models as we voluntarily gather more information from our digitally connected lives.
Accomplishing this will require collaboration on the part of customers, technologists and insurance providers. Without any one of these participants, the sump pump simply fails and your basement is flooded.
This example is only one the Financial Services Roundtable will explore via our new Digital Frontiers effort. Through FSR’s members—the largest financial companies in the country—and our Technology Collaborators efforts, we will seek opportunity for collaboration as these technologies reshape our worlds.
The focus of this effort will be on the customer.
As more and more sensors connect the physical to the digital world and artificial intelligence makes that collected data actionable in real time, financial products and services become more personalized and automated.
Consider the example of the connected car, a future that we can see developing before us.
Currently, your car might offer navigation services and voice connection for service requirements among others. Your next car will likely offer you, with your consent, real time, personalized insurance based upon your driving habits potentially saving you money in premiums. Such a transformation in the insurance industry will have profound effects upon consumers, but that will not be the only feature to your digitally connected car.
Your car will also double as your wallet, allowing you real time payments for things like tolls, drive through restaurants or grocery pickup and will authenticate you for those transactions using the biometrics of voice, eyes, fingerprints and mannerisms. Your car will know what mood you are in and will offer you entertainment to fit. It will understand your wants in real time and provide immediate choices on a range of products and services beyond where to go to pick up a coffee.
Imagine that you are taking a detour on the way home from work to look at a potential new home. The connected car will offer you real time options similar to the home you visit and offer to navigate you to them. The car will know if school districts are an important factor in your real estate purchase decision. Since it knows your financial position, the car can connect you to a financial services company to offer you a real-time mortgage loan.
Making the third trip to an office supply store this week? Your car might present you with loan opportunities to help you expand your small business.
On top of these things your car will provide you unparalleled safety due to the proliferation of sensors in its vicinity. If the car is not completely self-driving, it will certainly feature driver assistance ways unheard of in the past. It will recognize upcoming hazards, traffic jams, lights and signs and act accordingly. It will brake automatically when required.
There will be many questions ahead, particularly as we discuss questions around use of data but we believe there is common ground. As we study these innovations, our focus will be on you, the consumer. How can banks, insurance companies, credit and finance companies offer customers the products and services they want, in a timely fashion using the best innovations? We will explore this digital frontier together and focus on where those innovations improve our lives. In the end, you should have financial services products delivered faster, more accurately and in a more personalized way.
The following leaders contributed to this article through their conversation with FSR’s Tech Advisory Council and Tech Collaborators:
Jack Weekes – VP of Operations and Head of Innovation Team at State Farm
Frits Bussemaker – Secretary General of International Relations at CIONet
For more information on FSR’s Tech Advisory Council and Tech Collaborators Program please contact Scott Stewart, Senior Director of FinTech Initiatives at firstname.lastname@example.org.