Over the past year, numerous new technological innovations have been put in place to help companies overcome the hardships of 2020 and the coronavirus pandemic. Financial technology, shortened to fintech, has made great strides in this aspect, helping companies in financial industries cope and improve their processes. Examples of how fintech has been utilized to help firms in financial industries include the implementation of blockchain technology to improve security and reduce information access costs and the implementation of artificial intelligence to help automate and digitalize financial transactions. The next trend of fintech will be in the insurance industry and it will see companies utilizing immersive technologies such as virtual reality (VR) and augmented reality (AR) to improve risk control by way of enhanced training. Let us look at these technologies, what they are, and how they will help improve risk control in the insurance industry.
Firstly, it is important to understand what these two new technologies are and how they work. We can start with virtual reality. VR is the use of headsets and motion tracking to create a 3D world, in which participants can interact with the world as if they were really in it. I have personally used this technology and it feels as though you are transported into another plane. VR has been utilized most heavily in video gaming, but it can be applied to more industries, like the insurance industry. Augmented reality is when you use a mobile device to augment your surrounding environment. This can take the form of inserting figures or objects into your environment or enhancing the environment around you. This has also been used for gaming, but more in mobile gaming. There have been numerous apps in which augmented reality has been used. Now that we have a basic understanding of what VR and AR are, we can discuss how they can be applied to improve the insurance industry and risk control.
These technologies will be able to improve risk control by way of enhanced employee training. AR/VR training can be very beneficial for employees and their understanding of risk control. They will be able to get more in-depth and hands-on action with risk control. They can be put into virtual or augmented scenarios that can help showcase risks and prospective losses for their company and its customers. This would either not be possible or be very expensive without this technology, so it also helps with cost reduction. Being able to actually really be a part of the scenarios is where the benefit lies, as employees can gain a lot more from this.
Written by Kourtney Manley, Business Analyst at OnlineApplication