FINTECH-Drones take banking & insurance sectors to a new high-B-AIM PICK SELECTS

October 30, 2020


The worldwide drone market has been on an upward trajectory in recently years, thanks to the increased adoption by industries like construction, agriculture and so on.

Evolving drone regulations and laws across the globe have played a critical role in the commercial application of drones. In the US for instance, with the Federal Aviation Administration (FAA) giving new exemptions, many companies have thronged to use drones to operate their businesses.

According to Business Insider intelligence, drones for enterprise hold maximum potential. The drones shipped under this category is predicted to increase at 66.8 percent compound annual growth rate (CAGR) by the year 2023. This means we are looking at a whopping 2.4 million drones to be shipped globally to meet the needs of these enterprises.

A broad range of commercial application for drones has emerged in the last two years across industries—including the most unlikely banking and insurance sectors.

Here’s a rundown at the current and future possible applications of drones in the banking and insurance sector & how they can help these sectors use drones to assess risks and influence their decisions.

Risk assessment using drones

Globally, the annual cost of insurance claims has increased eight-fold since 1970. Drones can bring in significant improvements in the insurance lifecycle and help insurance companies provide faster and accurate risk assessments. Drones are increasingly being used by insurers today to achieve better risk management and reduce costs without compromising on efficiency while settling claims.

A most popular applications of drones is in assessing damage after an event or natural disaster. Enterprise drones can be programmed to reach remote locations which are hard to evaluate as soon as a calamity hits.

Hurricanes are classic examples where insurance providers use drones to assess damage. By using drones, many insurance companies are able to capture images of the property & help in faster completion of work as compared to human deployment. These drones provide extensive feedback when damaged site is still inaccessible by humans. The turnaround time can be greatly reduced by using drones for settling insurance claims.

Drones in Banking Sector

Drones usage in the banking sector has been a questionable thought given the need for high-security requirements. Banking sector has created efficient ways to handle transactions online through their websites, created safe payment gateways to minimize fraud and enable smooth transactions to its customers.

But, globally, banks are exploring some unique use cases of drones—for example, carrying cash to ATMs But the main concern is safety. There have been instances of signals being jammed with jammer devices to rob off the drone carrying money. Building drones that can work against signal jammers or creating high resistance in case of such an event happens is a possible solution. This leads to reduced risks of drones being shot down and thus the drones can deliver cash to the machines safely and securely.

Though a remote possibility, a few other realistic applications include using drones toto verify documents, or to fetching documents from customers with loan applications thus reducing manual intervention.

In 2018, the drone market size was approximately USD 4.4 billion and is expected to grow to USD 63.6 billion by the year 2025. There’s been an exponential spike in firms requesting the usage of drones. The technological prospective for drones is at its all-time peak and will only grow with time.

Both banking and insurance sectors are set to transform amid the fast-paced environment with new business models, new products that cater to the dynamic needs of consumers and emergence of new technologies. Financial services firms are constantly striving to offer new and faster ways of services to customers and drones can definitely help them achieve this goal.

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