How #Wearable #Technology is Influencing The Insurance Industry. A nice #infographic about Wearabble Insuretech from LifeInsurancePost.com.
The post Wearable InsurTech Infographic appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
Last week, #Visa’s Chief Executive Charles Scharf went on a bit of a rant describing the complicated relationship between #PayPal and payment networks. At a different conference yesterday, Dan Schulman, PayPal&8217;s chief executive, didn&8217;t seem concerned about the dire warnings coming from Visa: I know that there has been a long historyRead More
Bank Innovation
I have been involved in many conversations over the past few months which have included a number of potential ideas around how #PSD2 will revolutionise the customer experience. Having thought about it a bit more, I have concluded that there are 4 primary use cases for PSD2 and that all of the ideas fit into one or more of these use cases:
1) Aggregation & Cash Management/Payments Management
Whether such aggregation and #payment initiation is managed through an existing banking relationship or an external entity such as a Google etc. this can be seen as a key use case for the consumer and corporate to manage their cash in a real time manner and initiate payments between accounts as well as to third parties.
In the corporate space, this can see the demise of the SWIFT cash management services which have prevalent over the past 30+ years and a migration from the overnight/intraday MT940/MT942 messages and use of realtime balances and transaction data enabling realtime reconciliation
2) Checkout
Today we see the likes of Amazon, Paypal etc use the credit/debit card as the means to effect checkout settlement – PSD2 offers the opportunity to display realtime account balances and initiate the push payment for goods and services. For the likes of Amazon, this could lead to incentives similar to those offered to Prime customers who are willing to sacrifice the next day service and receive a £1 credit to the digital wallet to be used against MP3 or Kindle purchases.
There is a down side to this approach that consumers will need to be aware of which is the consumer protection that is afforded from using credit cards.
3) Comparison Websites
Today the comparision sites provide information on utilities, credit cards etc. By allowing access to realtime information, these sites could provide the automated management of savings to the best deals available with selected institutions. The next step to that could be the virtual banking with the website as they will manage the banking current account relationship. Using CASS to move the current account to the best deals in the market. A user could indicate they bank with the comparrrison website, be assigned a virtual sort code and account number which links to the physical sort code and account where the account is presently held.
4) Credit Management/Decisions
Finally, when applying for a loan or other form of credit, the ability for the consumer to allow the credit insitution/provider to be granted access to latest transaction data as a basic for making the credit decision. Moving to a more ‘knowledgeable’ basis of decision making will allow for better control of credit decisions which should reduce risk and could/should lead to lending at lower cost.
If I’ve missed anything outside of the above then please let me know, I’d be very happy to add to my list above.
What will make these use case a reality is the adoption by various actors (#Banks, Google, Amazon, Comparision sites etc.) but also the #Fintech community to develop the apps to drive and expand the horizons of what and how any or all of the use cases can bring added value to all parties.
[linkedinbadge URL=”https://www.linkedin.com/in/bobford” connections=”off” mode=”icon” liname=”Bob Ford”] is Payment SME, Consultant at Bob Ford Associates, and this post was originally published on linkedin.
A new #London #School of #Economics #paper suggests that #blockchain tech #could alleviate #custody #risks for securities owners.
CoinDesk
Fast moving #fintech startup #Digit closed a $ 22.5 #million #Series B today just a year after closing an $ 11.3 million Series A. Ribbit Capital led the round with support from all prior investors including General Catalyst. This new round brings their total fundraising to $ 36 million. The San Francisco based startup, founded in February 2015, operates in the #savings space and has been doubling… Read More
ESMA has released a new paper on blockchains and #distributed #ledgers as part of a fact-finding effort into the #technology.
fintech techcrunch
#Auto #Insurance is growing fast in emerging markets as people get their first car. Telematics can create a more personalised risk premium. Claims processing is in transformation as auto body shops and consumers form into networks through maps and mobile phones. Meanwhile consensus is emerging that greater adoption of driverRead More
Bank Innovation
#Blockchain startup R3CEV has added Hong Kong-based #life #insurance group AIA to the ranks of its global banking #consortium.
CoinDesk
#Credit card penetration is one of those problems that isn’t really a ‘problem&8217; in the West. In the U.S. alone, 232 million adults are said to own at least one credit card, with 18 percent of consumers in the country owning two or three cards. Read More
In the past three years, 100 million people have opened #bank accounts for the first time in Africa. In China, there are 500 million people who are ‘newly banked’. In India, 187 million new accounts were opened in just one year on a governmental scheme. In the UK, around 100,000 people came into the #banking stream, either for the first time or after a long break, in the last three years.
This growing segment of the newly banked, who have emerged from the unbanked population and not-quite-yet-in-the-fully-banked category represents one of the biggest challenges for traditional and challenger #banks in the world (yet, is not talked about as much as it should be!). They have a unique set of problems, and deserve a unique set of solutions – that are not available in the market today.
The newly banked population does not find a bank account useful
India’s unbanked population halved in the last four years, according to a report, which means 324 million new accounts were taken in that period. In just the past year, under a Prime Ministerial PMJDY scheme, 187 million new accounts were opened. However, 43% of these accounts lay dormant, with no balance and no deposits or withdrawals.
In the UK, around half of the people with new, basic bank accounts still chose to manage their money and make transactions in cash. Around 15% of newly opened accounts were closed or abandoned.
These figures paint such a dire image that it’s a mystery why banks are not taking more steps to bring the newly banked into the well-banked, or at least, the underbanked groups. Offering financial literacy is just one obvious element to fix the problem – the most important change needed is for the bank accounts to offer relevant transaction channels and sensible costs. In Africa, for example, mobile payments on basic phones have taken over the transaction ecosystem, and banks offering viable alternatives is a difficult proposition, yet possible.
This is because the experience of moving into banking hasn’t been great
The newly banked population probably used cash for transactions before the bank account, and transferred money using either mobile phone text messages (Africa) or specialised remittance firms (India and UK). In reality, it probably worked fine for them. There was a clear lack of perceived need.
The expected customer experience (once the bank account is opened) is that it caters to a specific niche challenge the customer visualises would be solved with a bank account. It could be something like reduced bill costs or ease of bill payments, better loan facilities for agriculture, or sometimes availability of online shopping. A good example of catering to a specific demographic is that of six Zambian banks coming together several years ago to provide a secure money transfer mechanism that effectively replaced cash and cheques in the region. In China, a #technology firm offers a SIM overlay that can be used on any phone to access bank accounts remotely.
Solutions from banks, including those in partnership with technology firms, have to cater to these niche socio-demographic and geographic challenges. If appropriate pricing along with these direct solutions to solve niche problems are not present in a newly opened bank account, it’s unlikely this population will stay with the bank. They will either go back to their old ways with cash, or will look at #fintech apps or technology solutions to meet their specific needs.
The newly banked population may not have access to a branch
Over 66% of the newly banked population were considered “rural” by a study. If this population doesn’t have access to a branch, it is likely they will not get the personal customer service support or financial product aid they would otherwise be getting. Despite all the branch-bashing that banks face on a regular basis (especially from us fintech fans), branches are in fact one of the best ways to put the newly banked at ease. If full branches are not viable, banks could consider using retailer shops as mini branches, or using field agents to encourage financial access (both models being used exceedingly well in Ghana and Kenya).
How do we keep them there?
The only solution to keep them with a bank is unfortunately not quite pleasing: a bank will have to exert greater focus on customer service, financial literacy and access channels specifically targeting the newly banked. This does mean increased costs, increased effort and investment into segment personalisation, but in the long run, without this investment, this population is unlikely to remain with the bank. A simple preventative measure like this will also help them face the fintech competition head-on. A student lending app or an app that helps improve your credit score may appeal more to this young, financially untapped population than having a bank account that provides no clear benefits.
Banks are increasingly partnering with fintech firms to handle this gap. Technology investments are great, but banks need to know and be in control of what those investments are being made for.
Read the full blogpost at http://banknxt.com/56824/newly-banked/
View my slides from the Dot Finance Africa event on fintech trends in the region:
http://www.slideshare.net/DevieMohan1/africa-fintech-investment-trends
Disclaimer: These are my personal views.
[linkedinbadge URL=”https://www.linkedin.com/in/deviemohan” connections=”off” mode=”icon” liname=””] is FinTech Market Strategist | Industry Speaker, Blogger and this post was originally published on linkedin.
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