The FinTech hype is starting to slowly wear off. The next sexy thing is InsurTech. That’s a good thing. We can stop focusing on the next ‘sexy’ application and start solving real problems. Raising money will become harder than using 4 buzzwords in one sentence. Investors are more educated now, more demanding. The money is still there but it will take a founder with a personal mission to tackle big problems like financial inclusiveness and not ’this cool app that is facebook for banking’. Mark Suster said it really well, and I completely agree with him – ‘When a founder is “mission driven” you get the sense that he or she will do whatever it takes to make an impact in the market they serve and will keep persevering whatever the startup trends of the month.’ I welcome that change.
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Platform Banking Taxonomy
By Pascal Bouvier
Like drunken sailors swinging fists at one another, we have been hurling around various terms to describe new ways of banking, new ways to deliver banking services. This post attempts to sort out a taxonomy and clarify the meaning behind the most salient terms, such as API Banking, Platform Strategy, Marketplace Banking, Banking as a Service (Baas) and Banking as a Platform (BaaP). I am using these terms within the context of the banking world in this post. Do note they apply equally to the insurance, asset management or payments worlds, indeed to the entire financial services industry.
If You Want to Convince The Bank To Change, Read This Blog
By Chris Skinner
The statement is clear: monolith firms are industrial age; platform firms are digital age. It also clearly shows the difference in focus. Monolith firms are heavy lifting physical assets; platform firms are providing open markets. This is why the industrial age firms have 100’s of thousands of employees to generate their market capitalisation whilst platform firms have just a few thousand. After all, an open marketplace has 1000’s of other people doing the work to buy and sell on your platform; a monolith firms does it all themselves. This is almost like an aha moment as, when I look at banks, they are monolith firms. Built for the industrial age, they like to control everything internally. They do everything themselves. Banks are A-Grade Control Freaks. The idea of opening up to all and sundry in a marketplace is like an enema to them, but they will have to do this to survive in the digital age.
Why It’s Critical To Get FinTech Regulation Right
By Daniel Nadler
Some argue that regulations stifle growth; others say they are critical to it. To me, regulation — specifically, sensible, nonobstructive regulation — is crucial to the success of the free market system; nonetheless, the key to maintaining the free market system is not a question of more or less regulation but a matter of getting the regulations right. That means government rules that provide a level playing field. Regulations specifically targeting fintech should seek to reduce the asymmetry of financial information between those on Wall Street and those on Main. They should also strive to make human interactions with the technologies safe. Fintech is too important to the future of the American and global economies to get wrong.
Losing control of distribution is one of the big challenges that established insurers face from new technology. Metromile, for example, is offering pay-by-the-mile car insurance in the US. Simplesurance, a German start-up, is selling product-by-product insurance via online retailers. What unites these companies — and many other insurtech challengers — is that they are not regulated insurers in their own right. Instead, they sell the policies and then have them underwritten by established insurers. One of the responses to this problem is for the insurers to find other ways to get close to the customers. Here, the big hope is the so-called internet of things, in which anything from your car to your TV to your fridge would be connected to the internet. Insurers see several opportunities here. The first is the chance to learn more about how customers behave. They have been using this principle in cars for years, installing telematics boxes that provide data about how well (or badly) the customer is driving.
5 things that made me smarter this week
We aren’t meant to be happy all the time—and that’s a good thing. Recognizing that no one “has it all” can cut down on the one thing psychologists know impedes happiness: envy.
The world has its first “space nation.” Scientists have proposed the formation of Asgardia, which would, among other things, develop a shield to protect Earth from space threats.
Your favorite TV characters could be reborn as AIs. The digital recreations might appear in new episodes or take over for Siri on your smartphone.
There are 10 times more galaxies than previously thought. The new estimate is at least 2 trillion.
Italy is running out of exorcists. Young priests find the job too scary, leaving 79-year-old Fr Vincenzo Taraborelli to expel up to 30 demons a day.
Also published on Medium.