Banking, Financial Services, and Insurance Industry Outlook Q1 2024: A Look into the Industry Whereabouts

Banking, financial services, and insurance industries have witnessed an extensive transformation by embracing digitization. Banks and financial institutions have streamlined their operation and reduced functional costs through mobile banking, online lending, and digital wallets. Artificial Intelligence (AI) and Machine Learning (ML) are being utilized to automate tasks, improve risk management, and provide personalized advice while enhancing productivity and competence. Cryptocurrencies and digital assets have now gained traction, challenging traditional banking systems. Leveraging data analytics to improve risk assessment, insurers have improved risk assessment and pricing models. Understanding the significance of important alliances amidst industry leaders, Allied Market Research has analyzed the recent mergers, acquisitions, product & service launches, innovations & partnerships, technology advancements, and others to highlight the industry whereabouts and assist the stakeholders in getting a comprehensive overview of the banking, financial services, and insurance landscape.

Mergers and acquisitions, a positive step for exploring new industry opportunities

To set their foothold strong in the competitive landscape, industry giants have signed up for mergers and acquisitions that have left a positive impact on the overall expansion of the banking, financial services, and insurance industry in the first quarter of 2024.

Capital One announced its plans to acquire Discover on February 19, 2024. With its expected completion valued at $35.3 billion, this was to be the fifth-largest U.S. bank mergers and acquisitions. This was assumed to create the largest consumer credit card issuer by the outstanding loans.

On January 19, 2024, Ally Financial Inc., and Synchrony declared a definitive agreement. This agreement allowed Synchrony to acquire the point-of-sale business of Ally which includes $2.2 billion of loan receivables. The portfolio encompassed relationships with 2,500 merchant locations and assisted more than 450,000 active borrowers in healthcare and home improvement services. Synchrony is expected to create a differentiated solution in the sector, providing credit and installment loans for point-of-sale home improvement.

On January 16, 2024, the Competitive Commission of India approved the merger of Shriram General Insurance with Shriram GI Holdings along with the approval of the merger between Shriram Life Insurance Company Ltd. and Shriram LI Holdings. The main objective was to undertake investment business and carry on with consultancy business, related to general insurance and re-insurance products.

Innovations and partnerships strengthening foothold of the leading and emerging industry players

In the first quarter, leading companies have focused on innovative approaches to their business. Collaborations and partnerships have further reinforced their position in the competitive landscape.

On March 13, 2024, Royal Sundaram, a private sector general insurance company, entered a partnership with Dvara KGFS to provide its complete suite of general insurance products, which intended to improve insurance access in the rural areas of the country. $00 branches of Dvara KGFS aimed to offer Royal Sundaram’s general insurance products through this partnership to its customers.

On February 26, 2024, DataCrest, an innovator of insurance solutions, and Sapiens International Corporation, a global leader in insurance industry software solutions declared a partnership to transform the process of application and boost the property and casualty insurers contributing to the overall growth of property insurance industry. The collaboration was projected to enable DataCrest to cater to the consumers’ needs and preferences better and allow them to develop digital experiences, to increase competence, hit ratios, and revenue.

On February 23, 2024, Wing Bank (Cambodia) Plc. And Prudential (Cambodia) Life Assurance Plc proclaimed a bancassurance partnership, supported by the National Bank of Cambodia, and the Insurance Regulator of Cambodia. This partnership aimed to improve financial protection and life insurance access throughout Cambodia taking advantage of both institutions to provide a wide range of financial services.

Product and service launches reshaping the industry landscape

Allianz Trade introduced Allianz Trade pay; a novel range of services dedicated to B2B e-commerce activities, on March 6, 2024. It has targeted to offer real-time coverage against potential non-payment risks in B2B payment industry, BNPL e-merchants, and providers. The company has also planned to accelerate the B2B ecosystem and e-commerce trade flows.

On the same day, launched a special Cancer Insurance Policy, solely for women to address the ever-mounting threat of cancer. The initiative intended to provide financial aid from Rs 5,00,000 to Rs 30,00,000 to women struggling with the challenges of cancer treatment and diagnosis. Comprising five primary types – ovarian, colorectal, cervical, oral, and breast cancer, the cancer insurance policy package guaranteed payouts upon the identification of any covered cancer.

According to a TechCrunch report on February 21, 2024, Amazon planned to launch Bazaar, a new, easy-to-find e-commerce site, where items will be sold for under Rs 600. The platform, according to the e-commerce giant, was expected to expose merchants to almost ten million shoppers.

Technological advancements opening new avenues for existing and emerging players

Technological advancements have been a major driver for the banking, financial services, and insurance domains in the last few months, opening exciting opportunities. With the assistance of technological innovations, many new start-ups have entered the competitive market along with the already existing industry giants.

On March 12, 2024, Mile Auto and VIU by HUB, an insurance brokerage platform partnered for the introduction of a cutting-edge solution to access reasonable car insurance based on individual driving behavior. The collaboration empowered VIU consumers to leverage Mile Auto’s pay-per-mile insurance model. The model allows them to pay only for the mile of driving covered with a low base rate per month. Mile Auto was projected to take advantage of VIU’s digital omnichannel platform to improve customer acquisition and grow customer base.

Verisk launched a generative AI tool designed to assist in faster processing of insurance claim services in February 2024. With the shrinking skilled workforce, tools like these are targeted to enhance productivity and drive operational competence.

Lyra Network, a leader in POS payments, transformed global payments with UPI transactions in France on February 5, 2024. This enables Indian tourists to use their UPI apps to scan the merchant’s website QR code and initiate a payment. On its opening, it started with online bookings for Eiffel Tower tickets from Lyra’s Mumbai office. This innovative step displayed Lyra’s commitment to advanced solutions to develop the global digital payment landscape.

Other promising developments that have contributed to the industry expansion

On March 13, 2024, Zopper planned to expand its distribution while strengthening partnerships with banks and non-banking financial companies, brands, retail chains, and travel portals. With a network running through 1,200 cities and 200 partners, the company used Zopper APIs to improve distribution channel opportunities to attain a larger audience.

On February 5, 2024, Tata Consultancy declared that it won a multi-year deal from Europ Assitance, a travel insurance company to reconceive IT operation model at a global level. TCS was expected to set up delivery centers across Europe to support Europ Assistance endwise IT application service enterprises.

On January 22, 2024, Keystone Agency Partners, a leading insurance brokerage platform secured $330 million in financing. The firm accelerated their existing debt service with financing, led by Apogem Capital, and included engagements from Crescent Capital. KAP’s target was to join forces with the best independent insurance agency boards providing valuable client solutions.

Summing up: How did the banking, financial services, and insurance sector perform in the first quarter of 2024?

Mergers, partnerships, acquisitions and technological advancements in the BFSI sector are anticipated to contribute to the domain’s growth in the upcoming years. Allied Market Research highlights the key players in this sector. The post-pandemic era has been counting on cloud computing solutions automation, and cybersecurity with the growth of e-commerce and online transactions and services. Investors have increasingly prioritized investments that align with environmental, social, and governance values. Overall, the first quarter reflects a dynamic landscape featured by customer-centricity, digital innovation, and exploration of community-based business models through various types of collaborations, positively contributing to the future industry prospects.

For further insightful information about the futuristic trends in the BFSI industry, contact AMR analysts

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