Category: InsurTech

API-fication Of Businesses: Must For Customer Centric Omni-channel Experience

October 16, 2019

The emergence of sleek, transparent and pay-as-you-use insurance products is on the rise. Demand for true-value for premiums paid insurance and consistent customer experience is seeing a global surge. At this juncture, it is evident that building loyalty and long-term insurance relationships will rely on seamless engagement with customers, distributors and the rest of the ecosystem. We predict that the ambit of insurance ecosystems will evolve to include unconventional stakeholders in the form of connected car manufacturers, OEMs, smart home and wearable device manufacturers to ensure last-mile delivery. In such a scenario, API based Omni-channel customer engagement will emerge as a game-changer for insurers. Rapid development in the Application Programming Interfaces (APIs) segment is fuelling growth in this trend. Eminent insurers, irrespective of them being incumbents or insurtechs, are bullish about APIs and have made considerable progress in adoption. In a first of its kind, October 2017, Lemonade launched its public API which allowed seamless access to sell Lemonade policies through third-party applications. Later in November 2017, AXA Asia launched its end-to-end insurance transactional API based Insurance as a Service (IaaS) model. The company allowed partners with complementary offerings to plug into their open APIs and create products to ensure seamless insurance delivery. Why multiple customer engagement channels? While most carriers have multiple engagement channels in place, the disparity in experience across different channels remains a major concern. A number of insurers who want to consistently score higher on customer experience index allow fluid movement of customers across their channels. According to Digital Insurer, USAA Insurance records over 90% of customer interactions on digital channels by allowing free movement across channels. Let us look at the value proposition of Omni-channel customer engagement in a digital insurance ecosystem: Source: Digital Insurer While the value proposition is tempting and lucrative, establishing an Omni-channel engagement strategy requires efficient content management, personalization of services, delivering a device-agnostic experience and data analytics-driven improvement measures along with a shift in culture to support continuous growth. Aegon Life, one of the leading insurance companies to have adopted a “Hybrid Distribution Channel” or Omni-channel customer engagement strategy announced about its plans of selling its products through “new-age distribution channels”. Let us take a look at some of the salient takeaways from Aegon Life’s transition: Customer Centricity: Aegon offered its potential customers the option to choose their preferred communication and transaction medium. Customers could choose to be contacted by company agents, directly buy from the company website, or buy the insurance through a broker. Personalization: It strived to deliver personalized services by routing calls to relevant agents. To put it in simpler terms, imagine a high net-worth customer inquiring about a life insurance product from New Delhi. The company can then geo-locate the nearest agent, who specializes in dealing with life insurance for HNIs. This promotes intelligent conversation and quality management. What insurers must do now?  It is important for insurers to adopt a true Omni-channel strategy, rather than a multi-channel strategy. Unlike multi-channel engagement strategy, which restricts itself to specified channels, Omni-channel strategy enables insurers to provide their users with the ability to obtain the right information at any moment of time; to make more contextually sensible decisions across the value chain and the power of transacting through multiple mediums. An ideal Omni-channel framework for engaging customer within an insurance ecosystem Source: Mind Tree Sustaining an Omni-channel customer engagement ecosystem will require insurers to forge partnerships with Original Equipment Manufacturers (OEMs) in the value chain. The focus should be on risk prevention, rather than risk coverage and management. This is not a new concept in the industry and a lot has happened in this regard. Be it Progressive partnering with Zubie, a vehicle-tracking and engine-diagnostic device, or Liberty Mutual partnering with Nest, a smoke detecting device maker or Manulife’s partnership with Indico Data Solutions to develop a deep-learning tool for unstructured financial data. We anticipate partnerships will be an effective tool in offsetting the lack of customer touchpoints and contribute positively towards enhancing customer engagement.  

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Insurance Gamification And Millennials Go Hand In Hand

September 26, 2019

Gamification of insurance has been in the market for quite some time now and has been deployed mainly for creating awareness, promoting compliance, and simplifying complex processes. Few prominent insurers such as American Family Insurance, AXA, Allianz and Lawley Insurance had adopted gamification in as early as the year 2012. It has been a great marketing tool to provide customers with all the necessary information without any human intervention or boring bot-based interaction. For instance: American Family Insurance collaborated with WildTangent and Mindshare Entertainment to develop its ‘iAMFAM’ game which allows users to create avatars and manage activities such as buying a house and planning a career. The game then helps users decide which insurance to purchase at what point in time. Post-deployment the game yielded a “click-thru” rate of 5.5% to 15%. Carol Rogalski, WildTangent spokeswoman claims that the game successfully drove consumers to ask for quotes. Source: Geek Wire Sun Life Financial of Canada uses its ‘Money UP’ online gamification platform to raise awareness on retirement and investment planning mostly among its young customers. The app provides educational content on the financial dynamics of savings plans, access to videos, interactive flash-based experiences, financial calculators, a retirement planner, and other online learning devices. The app features options to enrol in plans or increase their contribution levels. Post-launch, the app registered the highest ‘take-up from Generation Y’ wherein over a third of players were 21 to 35 years old. Generation X users (ages 36 to 45) comprised a third of the game’s participants. Let me tell you why gamification of insurance has the potential to be more relevant than ever before. Insurtech start-ups even the incumbents are now focusing significantly on the millennials segment. A race is on to tap the “millennials savings” and we are of the opinion that gamification will find traction among millennials. The very nature of gamification is to indulge the user into a rich and immersive experience which enables instant engagement. Furthermore, gamification eliminates human intervention and nullifies any possible false positives. These traits are probably the best possible value proposition when targeting a millennial. Insurers can leverage gamification to augment the role of an agent and provide millennials with self-service facilities, address their core needs and raise awareness about insurance products. Below is a table representing the possible benefits of gamification for each stakeholder across insurance LOBs.  As new-age companies heat up the insurance sector with their niche products coupled with funky marketing collaterals calibrated to target the younger customer base. We foresee gamification to fair well among millennials. Gamification fits aptly across the entire insurance spectrum, beginning from raising brand/ product awareness, customer onboarding, underwriting, claims prevention and cross-sell of other insurance products.

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Is ‘Sachet Insurance’ The Right Model To Target The Mass Customer Base?

September 20, 2019

Insurers have now begun following what many in FMCG and the telecom sectors have been up to. Small package offerings, or as the insurance sector prefers to call it “sachet insurance” or “bite-sized insurance” products are making inroads to target the mass customer base. Though at its nascent stage, an increasing plethora of insurers offering such products, are signs enough to predict a positive future for the product model. Flag bearing insurance companies in this segment in India are Toffee Insurance and Digit Insurance. Whereas, Zego, a London based company or Axinan the Singapore based company is testing similar models for their markets. They are offering ‘small-ticket’ non-comprehensive low insurance cover, focus on specific needs and are priced at affordable/low premiums. Did you know? According to Rohan Kumar, CEO at Toffee Insurance, “The sum insured gets defined by the premium. A premium of up to INR 1,000 per year can be called as sachet insurance and the sum insured will depend on the category where it can go up to INR 4-5 lakhs” Digit Insurance offering a holiday home cover at INR 200 excluding tax for INR 2 lakhs cover or Toffee Insurance’s backpack policy which adjusts premiums as per the “bag value” of policyholder have found a number of takers. The bag value insurance has a pricing model which requires users to pay a premium of INR 25 for bag value of up to 2000 or INR 100 for a bag value ranging between INR 5,000 and INR 10,000.  So why is the sector upbeat about ‘sachet’ or ‘bite-sized’ insurance? The answer to this is not simple. However, after speaking with many of the insurers, we found a common ground which enlists the following adoption drivers: Higher price sensitivity Growing millennial cohort that simply gets attracted to the ‘pay-as-you-go’ or value for money proposition. A number of insurers believe these ‘sachet-packs’ are needed for driving insurance penetration as it did for the FMCG and telecom sectors. Access to insurance cover anytime, anywhere and for specific requirements at affordable prices is the single selling point of these ‘sachets’. “Insurers have products for individuals who have a monthly income of Rs 40,000 and above. We want to offer products with premiums as low as Rs 20 so that the masses can buy it instantly,” – Upasana Taku, Co-founder, MobiKwik If you are thinking that only new-age players are making a foray in this domain then let me tell you about some established ones ICICI Lombard has collaborated with Mobikwik for a cyber insurance cover that can be availed at INR 99 per month, with a sum insured of INR 50,000 and has a validity of one month. Max Bupa & Mobikwik have a business tie-up for its ‘HospiCash’ plan that has an annual premium of INR 135, and provides daily cash allowance of INR 500, for up to 30 days, during a hospital stay. AIG Singapore launched its ‘Travel Guard Direct’ plan which is priced according to destination, duration and age, so customers can benefit from more accurate, effective pricing based on the risks involved.  Wondering how will you jump into the fray? You should begin by considering the fact that ‘sachet’ products will transcend the geographical boundaries and reach the mass population. This implies that scalability will be of utmost importance. The overall service delivery architecture should be calibrated for low-value, high-volume transactions. According to PWC, a modular, scalable, cloud-based and API driven architecture that can handle concurrent transactions across customised product lines and last-mile distribution channels would be a good architecture for sachet products. A robust ecosystem comprising partners and third-party service providers will be an ideal service delivery model. Source: PWC Apart from handling concurrent transactions and associated architecture, another aspect that is of equal importance is that these products are simple and offer need specific coverage. This makes it imperative for insurers to pull relevant features from multiple insurance products and bundle into one relevant and simple package. For instance, Toffee Insurance’s bicycle insurance product covers theft, damage to the bicycle and personal accident. The company pulls theft and damage from a single underwriting partner, whereas it fetches personal accident cover from another underwriting partner. In such an operating model, insurance ecosystems emerge as the perfect fit for sachet insurance products. While considering an ecosystem, the role of open APIs (Application Programming Interfaces) in facilitating secured connectivity will remain crucial for the delivery of sachet insurance products. Open APIs can be deployed to amalgamate with a wide range of ecosystem players and deliver a synchronized customer experience. Over and above customer experience, open APIs also have the potential to provide insurers opportunities to sell insurance through partner websites thereby increasing revenue channels. So what lies in the future is already getting interesting. Source: PWC The rise of sachet insurance is not far as the current integration with taxi hailing service for each of its ride has become a norm. You might never know that your next insurance will be of a penny cost but for one of the most precious childhood memory. However, the challenge for growth still remains of creating ecosystems with secure data exchange at convenience. Technologies like blockchain, cloud and unconventional stakeholders will be roped in to ensure last-mile delivery.

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Why Cloud Based Innovation Is the New Norm for Insurers Globally?

September 9, 2019

A number of insurers have started migrating their core business functions into the cloud, a sight which was rare a few years ago. A report by Ovum a few years ago had highlighted how 67% of CIOs from the insurance industry predicted that cloud computing will “completely transform the insurance industry in five years or less”. Today, we are excited to see that it is happening. But the bigger question is why is it happening? The reasons for adoption enlisted at a strategic level include enhancing operational efficiencies, adapting to agility and seamless access to disruptive technology that can drive innovation. Let us see a simple use case of FinanceFox AG, they have teamed up with Salesforce to integrate CRM applications with its insurance brokerage platform.  The platform lets users manage all exiting insurance policies and get advice on insurance coverage gaps. This has given users complete control and the organization is acting as a virtual advisor 24×7. Cloud-based insurance solutions have ushered in an era of innovation to such an extent that large enterprises are craving for a pie in this segment already. For instance, Alibaba Cloud had partnered with eBaoTech to launch ‘eBaoCloud’, an insurance cloud platform that grants insurers access to standardized insurance capabilities without the need to self-build or deploy their own systems. Recently, China Continent Insurance (CCIC) launched its next-generation Core System based on ‘eBaoCloud InsureMO’ as middleware. ‘InsureMO’ provides a comprehensive set of APIs to develop an ecosystem for connecting all internal staff user interfaces and workflows. If we look around we see a dynamic range of companies that are leading the race with cloud-based innovations. Source: Accenture Though we assumed that cloud solutions are only for boosting operational efficiencies and agility but they are evolving themselves to play a crucial role in combating insurance fraud that has plagued the industry for a long time.  For example, CNA Financial Corporation uses Shift Technology’s ‘FORCE’ fraud detection solution to automate the insurer’s fraud detection capabilities. ‘FORCE’ is a SaaS-based solution and claims to have a 75% hit rate. CNA Financial is charged based on the volume of claims processed. Did you know? According to Insurance Thought Leadership.com, insurers across US and Europe fall prey to insurance frauds worth approximately Euro 60 bn per annum. While an estimated 65% of fraudulent claims go undetected, about Euro 240 mn is spent by insurers to tackle fraud. Journey to Being Cloud-Native By now you must have already started planning on leveraging cloud for growth. Let us help you make the first move. An insurance company which provides motor insurance plans to decided of creating a smarter claims prevention mechanism and move it to the cloud. They would then be engaged in a number of considerations and scenarios like: The application and infrastructure model should be designed to account for unpredictable data flow The system must be able to decipher possible business implications from a weather alert of a possible thunderstorm It should have the necessary ability and algorithms to prioritize sending of push notifications and warning messages to policyholders while not hindering other workloads. While they check and analyse the requirements and possibilities they have to keep the core principles intact. But what are these core principles? Clear identification of all possible infrastructure requirements, architectural patterns and application models Well established difference between infrastructure resources that required smart configuration, and provisioning in case of an unforeseen scenario Drafting of architecture patterns for achieving scalability and flexibility of services to cater to the surge in data flows Finalization of application model to optimize solutions for both low configuration and scale-out scenarios Figure: Guardian Life’s shift to AWS Now we feel like we’re in a platform. And we’re capable of testing and learning a lot faster than we have in the past with much less of an investment. But we also have access to these new technologies and just as importantly, the people that are developing these new technologies.”- Dean Del Vecchio, EVP, CIO and Chief Of Operations at Guardian LifeThe partnership between insurers and cloud is here as to stay with cost advantages, co-creation possibilities and higher sustainability. With major giants already deciding to get out of the business of owning and operating its own data centres is a huge milestone for the new cloud-first approach.

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Future Sneak Peek: Insurance Will Be About Prevention Not Claims

August 29, 2019

Claims are a paradox for both insurers and claimants. None of the parties involved wants claims to occur. However, when a situation occurs claimants demand instant resolutions, transparent processes with a personalized experience. Insurers, on the other hand, remain wary about efficiency, accuracy and fraud/ litigation risks. We see a number of efforts being done in past to enhance claims handling processes and claim prevention remained virtually untouched. However, with technology coming at the driver seat, the rules are being re-written. Insurers are now beginning to look beyond using technology for operational efficiency. The possibility of creating data-driven products which can excite customers has got them thinking about how technology can be used to add value in customers life and become their strategic partners and not vendors. Upcoming areas like connected cars, telematics, interest-based data from social networks, wearable devices, and smart home solutions are gearing up to empower insurers to transform their business by becoming a claims prevention and risk minimization partner for customers. Time to become well-wishers and help them prevent accidents has come finally. Technologies are already at the heart of claims prevention If we are thinking it is the future, let me correct you it is the present too! Let us look at a unique challenge US insurers face. It is estimated that 14,000 water damage claims are recorded per day by US homeowners, each having a ticket size ranging between USD 6,000 – USD 15,000. They total up to a whopping USD 123 million in preventable damages daily. A Chicago based organization, Elexa identified this and currently offers ‘Guardian’, a fully autonomous water damage prevention solution which prevents water damage in the home and even shuts off water in the event of an earthquake with built-in vibration sensors. James Jackson, EVP of Elexa explains: “There’s nobody that IoT and home connected sensor devices matter more to than people in the insurance industry, because they grant peace of mind for the homeowners, and help to prevent costly damage claims,”. On the other side, we also see traditional insurers such as Desjardins, Willis Towers Watson and Franklin Mutual have partnered with Roost; a California based home telematics company, which offers smart sensors that help in mitigating claims costs by sensing water leaks, as well as humidity and freezing temperature situations. According to Roel Peeters, co-founder and CEO, Roost: “Home telematics solutions are not going to prevent an incident like a fire or a water leak from happening, but they can certainly help to mitigate a situation and reduce it from something that might result in total loss, which is devastating for homeowners and very expensive for insurers, to a much smaller and more manageable incident,”.  Another area which has seen some good traction is the Usage-Based Insurance (UBI) for automobiles. As per Frost & Sullivan, about 100 million drivers globally are expected to take such policies by 2020, with regions like Italy, UK and the US leading the shift. Progressive has already made its headway and is among a throng of many car insurers using telematics to determine a customer’s premium based on their car type, driving patterns, potential traffic, etc. Travellers, another insurance provider offers its “IntelliDrive” that allows parents to set safe driving rules for their children and receive mail or text alerts if the drive breaches these rules. Interesting isn’t it? IoT landscape is evolving continuously and making it challenging for insurers to adopt, learn, un-learn quickly to become a partner for risk prevention rather just risk prevention. The new-age insurance requires a shift in operational agility and continuous value creation. The need for having a strategic technological partner is now a must have!

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Conversational AI in Insurance: Nullifying false positives

July 23, 2019

Conversational AI problem statement: Operating as an Insurer for the modern-day, on-the-spot solution craving customers is a constant battle between passing out relevant information in the quickest possible turn around. As a thumb rule, insurers can’t keep their customers waiting and then pass on incorrect or unwanted information (false positives). While having a dedicated customer service team for this problem may seem like a tried and tested formula, it brings along its own set of business implications which can hinder profitability as well as brand reputation. Who are conversing through AI, and how? Research shows insurance companies across the globe are investing in conversational AI tools and solutions to overcome this problem, with the broad objective of delivering customer delight and higher recommendation rate. Conversational AI has already proven its merits amongst several leading insurers: • Tryg, a Denmark based insurance operator enjoys 97% resolution rates of all internal chat queries; the company has successfully enhanced the abilities of its existing customer support staff. The number of calls from support to back-office teams has also dropped substantially in just one year, post adoption of Conversational AI. • In a similar instance, Storebrand also claims to have achieved a major break-through in the usage of AI laced chat interactions. Presently, the company powers more than 70% of its chat interactions through AI-chat tools and zero human interventions; additionally, the company also registered a 162% increase in customer interactions through chat mechanisms. Even though Tryg and Storebrand are two distinct companies operating in separate geographies, they have a strikingly similar strategy of adopting the AI tools. Both the companies have adopted the AI as a complementary solution to their customer servicing team. The two insurance giants have actually deployed their chat tools as the ‘first line of defence’ for the ping traffic inbound. The tools generally soak up all the repetitive and mundane queries which suck up employee bandwidth, unproductively. These tools have been carefully planned, crafted and developed to delimit themselves from more serious and business critical queries, which are eventually transferred to more experienced and skilled customer service executives, owing to obvious reasons. Who is driving AI-based conversations? The conversational AI adoption trend is basically fuelled by the fact that customers, especially the millennials prefer fast, efficient and reliable modern communication over traditional channels such as emails and telephonic conversations. Insurers will have to address this sense of instantaneous resolution among millennials in order to carve a better market share among this cohort, which is fast becoming rich and finding ways to manage their finances. According to Accenture, in the next 30 – 40 years, millennials are expected to inherit wealth worth over USD 30 trillion in North America alone. This makes them the next important chunk of population wherein insurers will have to focus more often and create a groundwork necessary for the future to avoid becoming irrelevant and a tech laggard. How do you jump into the bandwagon? To kick off a Conversation AI adoption journey, Insurance players will have to begin from their drawing boards and slate down opportunities to improve the critical interactions customers have. Some important areas may comprise the provision of human support over and above AI support, positioning of the tool in the customer’s digital journey in a manner which highlights the scope of the AI chat assistant, induction of “pre-trained’’ insurance specific modules, deciding the key performance indicators for the solution and lastly, a reliable technology partner that can factor in all of the above and come up with a solution that can efficiently manage near 100% of all customer interactions and void of any false positives.

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Unboxing The “Regulatory Sandbox”

July 4, 2019

The alarming worldwide increase in Sandboxing usage has been the consequence of the mushrooming of FinTech companies. This has led to the establishment of regulatory sandboxing by financial regulatory body establishing a medium where FinTechs can experiment and test innovative products, services, business models and delivery mechanisms in a live market with real consumers. This has been with the major objective of instilling an optimal balance between ensuring financial stability and consumer protection while also enabling beneficial innovation. A Global Overview The launch of ‘Project Innovate’ in 2014, the UK’s Financial Conduct Authority has won recognition for the success of its sandbox. It has paved the way for major compliances in different nations and building trust across regulatory institutes of why they should consider having a sandbox. Since then a number of nations have introduced and improved the framework. Fintech Supervisory Sandbox, launched by the Hong Kong Monetary Authority in 2016 allowed banks and their partnering technology firms to conduct pilot trials of their fintech initiatives involving a limited number of participating customers without the need to achieve full compliance with the HKMA’s supervisory requirements. The Singapore Personal Data Protection Commission (PDPC) in 2018 established a Regulatory Sandbox in order to test possible changes to Singapore’s Personal Data Protection Act (PDPA). In Malta, specific legislation has paved the way for a Regulatory Sandbox for testing Artificial Intelligence against pre-determined functional outputs in 2018. There are some parallels with the Sandbox principle in the United States as like in UK and Asia, wherein FinTechs can ‘run it by’ the Federal Trade Commission or other regulators for approval of new methods of parental consent on an informal basis prior to rollout. Switzerland’s government in 2016 called for regulatory framework changes for Fintech services including online payment solutions. The changes would enable FinTechs to offer services without a license and without agency monitoring. Financial Conduct Authority’s report, Lessons Learned provides a firsthand experience of the first 6 month cohorts of 50 firms of which 41 FinTechs successfully tested their products in a regulatory framework.  Some successful sandboxing examples- A Distributed Ledger Technology platform that enables consumers to pay, log in and verify their identity using biometrics. Facial recognition technology to feed into the risk-profiling assessment used by a financial adviser. A data-sharing experiment between a large firm and a Fintech company successfully provided a product which increased customers’ savings through analysis of current account transactional data. A number of firms have used the Sandbox to test Robo-Advisory models. Sandboxing: Need For The Indian Ecosystem According to KPMG, the Fintech market is set to reach USD 2.4 billion by 2020 which is double its worth of 2016 that stood at USD 1.2 billion. The innovative breakthrough by FinTechs has given rise to major data security challenges which leapfrogged with the prevalent use of Open Banking system that provides a user with a network of financial institutions’ data. Open Banking has been a boon for FinTechs like PayTm, PayU who have already successfully incorporated APIs to share information, but has definitely raised eyebrows. Source: Pwc As APIs are gaining traction it is only recently that firms have begun to step up to secure their online spaces as consumers are getting aware of threats such as phishing –which not only threaten a customer’s main bank account but also all their other chosen financial providers. Drawing examples from the worldwide success of regulatory sandboxing, RBI has proposed a Regulatory Sandbox where businesses can test innovative products under relaxed conditions. Salient Features of RBI’s Regulatory Sandboxing The focus of Regulatory Sandboxing is being on thematic cohorts such as financial inclusion, payments and lending, digital KYC; any product/services which have been banned by the regulators or the government, including cryptocurrency/crypto assets services, have strictly been discouraged. Source: EMA The idea has been to foster ‘learning by doing’ for both regulators and service providers as it enables them to obtain first-hand empirical evidence on the benefits and risks of emerging technologies. Acceleration of initiatives around financial inclusion in areas such as microfinance, innovative small savings and micro-insurance products, remittances, mobile banking and other digital payments with improved process and technologies is in core focus. It is expected to provide organisations with reduced time-to-market for new products and services, combined with the assurance that they have built-in appropriate safeguards. What Can Organizations Expect? FinTech companies can now test the viability of the product without a wider and expensive rollout. It allows faster growth of the ecosystem as the consequences of failure can be contained and reasons for failure analysed. As far as SMEs are concerned, the access to APIs (application programming interface) of banks has turned out to be a big problem. A regulatory sandbox will effectively create a level playing field even for smaller FinTech companies. Without a sandbox like an environment, new entrants and innovators would be uncertain which could hinder financial innovations and that would be cataclysmic for our economy. Currently, more than 400 FinTechs are operating in the country and their investments are expected to grow by 170% by 2020. Regulatory Sandboxing comes as an encouragement for digital disruptors like us to develop and explore innovative products and services. FinTechs need to streamline decision-making processes to improve agility and partnering with digital solution providers will enable your company to deploy sandboxing methodologies to fastrack your processes.

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How To Do Digital Innovation In Banking And Insurance? My Experiences From A Startup!

June 14, 2019

Presented some thoughts on doing successful digital innovation for financial service businesses. #fintech #insurtech @indusnettech Broad areas where financial service business can innovate during their digital transformation. How can you put a defined RFP and fixed budget for an ‘innovation’ project? – when the destination ‘might’ be known, but not the path If you think putting together a great product = battle won, you are in for a rude surprise! If you are innovating successfully, – monetize – brand – scale – do the next, Because… Digital transformation is especially important in light of the hyper-connected and constantly changing global marketplace that we live in – with consumer preferences often changing at a whim.

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All That We Learnt From #Money2020, Amsterdam 2018

June 6, 2018

FinTech is a space where the centuries-old traditional finance sector is evolving rapidly thanks to the well-funded tech innovations. Established banks are also investing massively in #FinTech to improve customer experience and their overall business. We were at Money 20/20, Amsterdam, Europe’s largest FinTech event. As they say it is an event  “where technology meets money, money meets people, people meet ideas and ideas become reality”. Here are some learnings from the event: "Build functionally to help customers save time. Predict behavior and alert them when there are deviations from what was predicted." @carlostorres – CEO of @bbva #M2020EU #Money2020 #Money2020EU #Money2020Europe @Money2020 #Fintech #Technology #CustomerFirst @warrendv — Currencies Direct (@CDBusiness) June 4, 2018 https://twitter.com/Rotero/status/1003550966841528320 Banks actually offer only five products, and the only way to differentiate is by services, and the standards for services are set by the big and small techs; Ralph Hamers at #Money2020 #money2020eu — Hartmut Giesen ?? (@hartmut_giesen) June 4, 2018 Investing in emerging markets inevitably involves short-term pains for long-term gains. That’s why anyone investing in emerging markets should plan to buy and hold these investments for several years, if not decades – https://t.co/wnvmz1hQ6Y #StockMarket #Investing101 #Money2020 pic.twitter.com/W7BSX6Vti8 — Jim Doyle (@JDoyleVancouver) June 4, 2018 #Ripple, the #blockchain-based payment network, is donating $50 million to 17 universities around the world to bolster the adoption of blockchain technology. #money2020 #money2020Eu #Fintech #Education #Fintech #Universities #UK #Bahrain #Netherlands #USA #GCC #Asia #Europe pic.twitter.com/oKsR6Oo2Cs — Muhammad Irfan (@mi_neoceptual) June 4, 2018 Interesting to see the fintech industry chugging along on fiat/bank rails. I wonder if any of them realize those rails are terminal. Tomorrow's financial order will be built on blockchains, digital assets, and open networks. #money2020 — Erik Voorhees (@ErikVoorhees) June 4, 2018 About fintech and innovation HSBC’s Maguire says they are not in the business in inventing technology but want to use tech to make life better for customers. Fin tech onboard g in about a eek with full contracting about a month. #money2020 #M2020EU — aman kohli | he/him | akohli@mastadon. ie (@akohli) June 4, 2018 From zero to 2500 – a decade long emergence of financial, banking, payments and monetization APIs, a shift that created precedent for #OpenBanking. API numbers pre-2008 are odd, plenty of payment gateway APIs in place years earlier – just no Fintech industry. #Money2020 #M2020EU. pic.twitter.com/R1ayGA4CyL — Rob Fernandes (@rob2775) June 6, 2018 https://twitter.com/Rotero/status/1003554759721267200 We gathered a lot of insights from the event, we are sure you did too. Make sure to keep watching this space for more such well-curated content. For more #FinTech related articles click here

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Disruptive Innovation in Payments

June 1, 2018

We could have written paeans about FinTech a couple of years ago, but to do so now would be to sing praises about what is already the norm. FinTech, the inevitable result of finance services making use of technology to enhance solutions and services, is the single largest disruptor in the world of finance. In addition to being a disruptive development, FinTech has evolved into becoming almost conventional, replacing legacy methods and making them seem archaic. Yet, a closer observation reveals that there is a lot of disruption taking place even within contemporary FinTech. Technology has driven FinTech to continuously evolve itself, and newer players continue to give a run for their competitors’ money almost every day. In this article, we briefly recap the growth of FinTech and contextually place this growth in a situation that continues to bring disruptive innovation in payments. We shall also take a look at certain trends driving this disruption, and what we can expect from this exciting development in the near future. The growth of FinTech While it may sound like a fancy term, FinTech isn’t actually very new. Using technology to drive financial procedures has been around since the 1900s in various forms. From being able to wire money to someone in a different part of the world to modern peer-to-peer payments, FinTech has come a long way. Barclays opened the first ATM in the world in 1967, and Wells Fargo kick-started the world’s first online checking account in 1995. PayPal came to being in 1998, and online transactions and payments have grown exponentially ever since. Apple Pay, which was announced in 2016, was another watershed moment, as it heralded a new smartphone-based payments solution. Finally, blockchain-based payment technology gave rise not only to cryptocurrency, but also to smarter payments, seamless insurance claims processing, loan disbursals, and contactless payments. We had recently written an article about how Blockchain is bringing winds of change to the insurance sector. Drivers of the change As we can see, FinTech has evolved dramatically in the last few years due to rapidly evolving technology. However, market behavior and changes within finance sector have also been major drivers of change. In this section, let us take a look at three aspects of this disruptive innovation in payments. Technological development It goes without saying that technology is a big reason for disruptive changes in FinTech. In particular, artificial intelligence and blockchain have caused tremendous changes in the finance sector, propelling drastic changes that have taken even FinTech players by surprise. For example, PayPal and other peer-to-peer payments solutions were taken by surprise when cryptocurrency came to being. Blockchain in fintech is the single-most disruptive situation at the moment. Cryptocurrency players like Bitcoin etc. were taken by surprise when Ethereum-based legal peer-to-peer payments application started to be launched. For instance, blockchain-based claims processing, stock purchase, and Ethereum-based P2P payments solutions are quickly taking over traditional smartphone-based payments applications. Smart contracts have enabled seamless and secure transactions, making financial procedures more reliable than they ever were. In fact, it wouldn’t be an exaggeration to call blockchain a cultural phenomenon. For an industry that focuses much of its energy on building and maintaining trust, blockchain and smart contracts-enabled applications are almost a godsend. It wouldn’t be an exaggeration to state that technology itself is driving change and causing more disruptive innovation in the field of FinTech. Those who aren’t part of this exciting evolution will quickly be left behind. In-store mobile payments are touted to exceed $503 billion by 2020. Just in the US, a whopping 150 million people are expected to use in-store mobile payments. The spending ability of mobile payments users is very high. They spend twice as much as non-users do, and earn at least $70,000 a year. Security-related doubts have been a hurdle for mobile payments adoption. 47% of cybersecurity professionals felt mobile payments weren’t secure enough at the moment, as opposed to just 23% feeling confident. Public Wi-Fi is the greatest vulnerability with respect to mobile payments, with a threat figure of 26%. This is closely followed by stolen devices, a situation whose threat figure is 21%. Market trends Increasingly, users have come to expect a lot more than what technology can offer at the moment. We can describe this as a market that’s so spoiled by choices that even the most disruptive technology no longer feels like disruption. Consumer behavior has shifted from being awestruck by disruption to expecting innovation by default. In other words, services that do not seem innovative enough for consumers simply get ignored. This has forced most industry players to closely study consumer behavior and surpass their expectations. This isn’t usually possible because users have come to expect a lot more than what technology realistically allows us to do. Yet, FinTech companies and solutions providers have to work harder to keep pace with market expectations ad and focus on driving change. Adopting innovation and complex technologies such as artificial intelligence, data analytics, and blockchain will help FinTech companies to surpass market expectations and bring value to the services they launch. Data analytics, in particular, can help FinTech entities to study consumer behavior closely and launch FinTech products that match market expectations. Industry changes There are a number of changes within the industry that are propelling disruptive changes within FinTech sector. Banks are desperate to retain their roles in the finance space, and payments intermediaries may simply vanish, because of smart contracts and distributed ledger technology. The same distributed ledger technology is helping FinTech organizations to make cross-border payments instantaneous, giving rise to new corporate and consumer solutions that will enable instant international payments a reality. Fintech companies have also begun to make use of open APIs, machine learning, and robotic process automation to enhance the experience. Most importantly, a lot of FinTech activity currently is focused on thwarting cyber-attacks, ensuring data privacy and safety, secure financial transactions, and eliminating payment frauds. Blockchain, smart contracts, artificial intelligence and machine learning are currently top

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