The future of insurance
LESSONS FROM FINTECH
Fintech is changing the face of banking, making it more customer-focused and efficient. There are lessons there for the insurance industry
“There’s an opportunity for insurers to learn from banking’s experience of fintech,” says Ben Robinson, chief strategy officer at Temenos, the Swiss banking IT specialist. “The digital wave that is transforming banking is now coming to insurance.”
Of particular interest to insurers is how fintech companies are helping banks to capitalise on data to manage their businesses more efficiently, driving down costs, improving risk management and delivering customer intimacy at scale.
“Insurance is a highly data and IT intensive industry, where the gains can be just as exciting – especially regarding risk,” points out Mr Robinson.
Temenos supplies core banking systems to some 800 of the world’s banks. Its experience of working with fintech companies to help deliver digital services to satisfy an increasingly customer-driven sector is informative.
Innovative disrupters have rewritten the banking business model. New banks such as Canada’s EQ Bank launched from scratch in just months to offer an online savings account with higher rates than competitors thanks to its lean and efficient cost base – it is branchless and employs just 27 people. M-Shwari, a new mobile bank in Kenya, is able to onboard a customer, make a loan decision and disburse the monies – all in under a minute.
But innovation doesn’t necessarily come cheap, nor is it swift. This is where fintech firms have been pivotal, developing not whole systems but discrete applications and services made available through application program interfaces. These offer fast, efficient and secure mechanisms to connect customers and technologies. Banks such as Santander, for example, use APIs to provide same-day business loans.
This “fintegration”, where banks access new technology from nimbler fintech firms, represents a win-win situation and one the insurance industry should emulate. “For insurance, the opportunity would be to work with partners to gain more data from sensors and to help improve data analytics. That way insurance could become more granular and the range of products would increase,” says Mr Robinson.