Insurance business model is one of the oldest business models out there dating back to Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. The principle of distributing the risk among many players is unchanged but the surrounding wrapper of services is changing rapidly. As an offer, insurance has been commoditised. It has become a part of the bundle. Whenever you buy a car, you want that car to be insured. Insurance is not a product anymore, it is becoming a service add-on that is bundled up during the buying process. This is further fuelled by the rise of sharing economy, where transaction frequency has increased dramatically and a new way to serve insurance is needed. New routes to market will emerge and distribution channels will see major changes.
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What comes after Marketplace Lending?
By Bernard Lunn
Now that Lending Club is past its crisis mode and is just another mature company that has to impress investors with predictable growth in financials on a quarterly basis, we look at where the puck is headed in lending. What innovation will change the lending game and create companies as big as Lending Club ten years from now? There are four innovations that focus on two big imperatives facing any ‘lending’ entrepreneur – reducing Customer Acquisition Cost (where Customer = Borrower) and reducing Cost Of Capital (reducing the intermediary cost) – the next generation deposit account, just in time borrowing by consumers, big data for the lending to micro entrepreneurs, automated working capital financing for SME.
There’s been a lot of talk about fintech lately. We talk about the billions of dollars being invested in fintech; the wave of unicorns and startups in this space; the challenge they bring to banks and incumbents; the way in which they’re reaching new spaces and places – but what is fintech? It’s no longer this big bucket of finance and technology. In fact, saying ‘fintech’ is like saying ‘retailer’. But what exactly are they retailing, and in the fintech sense what areas of finance are these companies automating? Chris provides a very detailed breakdown two part post.
Is the Facebook of Banking Still Possible?
By Diana Asatryan
If you picked up the New York Times Business section this morning, you probably saw the photo of the fintech guru, Brett King, looking out the window of a dimly-lit room. The caption read: “Brett King once hoped his company, Moven, would become ‘the Facebook of banking.’” Those hopes are gone now, the article suggests, as King has shifted Moven’s business model from being a standalone challenger bank, to selling its software to the banks. “We realized that if you want millions of users as a bank it is a very different proposition than building a social media network,” King told the Times.
Financial institutions have always known the data they possess could yield tremendous insights. They just haven’t figured out how to tap this goldmine. The vast amounts of customer data — device details, login information, transaction histories, payment behaviors, etc. — give banks and credit unions a truly unique opportunity to learn more about- and deepen relationships with consumers. Why cross your fingers and hope staff guess which product they should pitch your existing customers next? A data analytics system deploying the principles of machine learning can take the guesswork out of your cross-selling program. Transport your marketing from the crude “fries-with-that?” mentality of yesteryear to the Netflix and Amazon world we live in today.
Also published on Medium.