As the cost of living crisis continues to bite over the second half of 2022, fuelled by an inflation rate expected to hit 10% this year according to the Bank of England, consumers need greater flexibility, efficiency and advice on where best to put their money.

It would be wrong to describe fintech as the silver bullet to the host of challenges facing individuals this year. But, by taking a consumer-centric approach and adopting innovation in the sector, businesses will find they can at least ease some of the pressures.   

As such, Reassured, the UK’s largest life insurance broker, today reveals its top five predictions for fintech in the second half of 2022:

1. Insurtech centred on consumer choice

With the cost of living soaring, it is tempting for many consumers to cancel any insurance policies that seemingly offer no short-term benefits. But, as the last two years have proven beyond doubt, the importance of insurance, particularly a life policy, cannot be overstated. 

It is up to brokers to ensure that the highest possible number of people have access to insurance. That means broadening the ways in which a policy can be bought, so, in the second half of 2022, we expect to see a greater number of brokers and insurers adopt digital solutions to complement core telephony-based sales.

It means putting the consumer first, expanding the number of ways through which they can access life insurance, and ultimately giving them a better level of service.

2. Wave goodbye to archaic pensions

With inflation at a 40-year high and the price of energy and food rising rapidly, consumers are having to make difficult decisions about what to prioritise. Investing in a pension is likely to slip down the agenda as the immediate benefits are not quite as visible.

The good news is that the acceleration in technology and the growth of digital pension challengers such as Penfold and PensionBee mean that consumers have far greater, immediate control over their pensions. Digital driven providers can offer greater flexibility so that savers can adjust or even pause contributions seamlessly if they are struggling to manage day-to-day living costs, which is something that the more traditional providers simply can’t match. This greater level of flexibility and control will keep consumers investing in their future in spite of short-term shocks, giving them a more secure future.

3. The changing face of insurance

The era of poorly coded, sluggish technology is over. Consumers have grown used to a level of service, brought on by the pandemic, which is defined by efficiency and ease of use, and the industry as a whole will make significant efforts to match this, by adopting AI, predictive analytics and advanced chatbots over the next year. 47% of consumers now say they are open to parting with their money via a chatbot. As such, developing technology which improves the performance and quality of service, while providing access to insurance quickly, will be a key focus of the industry in the remainder of 2022.

4. Tech to prevent fraud

Fraud losses following unprecedented amounts of financial support given to businesses and individuals over the pandemic were a painful reminder of the importance of adequate KYC checks. In the UK, an estimated £4.9 billion of taxpayers’ money was lost to criminals as a result of poor identity and verification (ID&V) processes. A primary focus for the second half of this year will be how we can stop this from happening again with technology solutions such as ID-Pal and Veriff, especially as the methods employed by fraudsters become increasingly sophisticated.

5. The future of the homebuying journey

Over the pandemic, the property industry adopted digitisation as a means of survival. As well to online communication, advisers embraced digital application tracking, online fact finds and interactive calculators to their list of services.

These benefits are now standard in the industry, but adoption of these services is certainly not the end. Exciting developments, such as Smartr365’s HomeBuyer platform allow customers to scan a QR code or Near-Field Communication (NFC) chip in an estate agent window or on a property search site. Other companies, such as Acre are similarly pushing for greater tech adoption. This will automatically and remotely share their details with a mortgage broker to begin the application process, bringing even greater efficiency and customer-centricity to the process.

James Turnbull, CTO at Reassured, comments:

“Fintech leapt to the challenge at the dawn of the pandemic by allowing essential financial services to continue to operate remotely and with greater efficiency. Now, it’s time for fintech to step up as the cost-of living-crisis intensifies.

“Innovative technologies in all areas of financial services have the power to grant consumers greater flexibility, greater security, and ultimately, greater freedom – all of which will help individuals deal with the toughest effects of rising living costs. But, it’s up to us as financial services providers to grasp these opportunities and lead from the front, by making use of the best of what fintech has to offer in order to put the customer first.”