Many insurance and financial services companies are beginning to embrace wearable technology and other, so-called “Internet of things” (IoT) technologies as a way of monitoring and engaging customers, according to a recent study by global IT services and consulting firm Tata Consultancy Services Ltd. (TCS).

In a survey of 795 executives from large multi-national companies around the world, TCS found that companies across all industries – including insurance and financial services – are increasing their investments in IoT technologies. It also found that many companies have boosted revenue as a result.

“Companies in the insurance industry and the finance industry are adopting this technology,” says Satya Ramaswamy, ‎vice president and global head of TCS Digital Enterprise at Tata Consultancy Services in San Francisco. “It is a widespread phenomenon. We do believe that companies still haven’t seen the full potential of this technology, but it is clear that it is being deployed in a big way.”

The study found that in the insurance industry, IoT technology is helping companies improve products, pricing, and marketing. Specifically, 49% of the executives with insurance companies that have adopted this technology said they are using mobile apps to monitor customers’ use of their policies, enabling them to create more customized products and pricing models.

A recent example is Boston-based John Hancock Life Insurance Co.’s new Vitality program, which enables policyholders to qualify for lower premiums based on steps they take to improve their health, as tracked by wearable technology.

“It allows the health insurance companies to incentivize consumers to stay healthy and therefore avoid claims, but also allows them to understand the risk profile of a customer more accurately,” says Ramaswamy.

As another example, he notes that numerous auto insurance providers have embraced telematics devices — technology that uses telecommunications to monitor, control or direct remote objects, such as GPS devices in cars — to track policyholders’ driving behaviours. The goal is to reward drivers who demonstrate positive habits with lower premiums.

In the banking and financial services industries, the most common way that firms are using IoT technologies is through mobile apps that customers use on smartphones, tablets and other digital devices, with 64.5% of executives indicating that they monitor customers in this way.

Other ways that firms use these technologies includes tracking how customers are receiving services in branches and other locations where business is conducted.

“They can monitor how things are happening in bank branches – whether customers are being served quickly and effectively…and making the customer experience within the physical premises much better,” Ramaswamy says.

Across all industries, many companies investing in IoT are reporting revenue increases as a result of these investments. In the financial services industry, this rise in revenues stems from segmenting customers more effectively, matching pricing more appropriately to individual customers and developing more engaging, customized products that attract more customers, Ramaswamy says.

The study highlights opportunities for banks and financial services companies to use these technologies in more advanced ways in the next few years. This includes creating more tailored products and services and improving customer service by providing service representatives with more data on customers and they way they’re using products.