Reinventing Insurance > Who’s hitting it off on Fintech Love Island?

Auditions for Love Island 2019 are in full flow. But Fintech Love Island has already begun. So, we’ve headed to sunny Mallorca to find out which Fintech Trends are hot … and which are not.

So, grab your wide-brimmed hats and sharpen your eye for Fintech magic! Here we are at the Fintech Villa, where this year’s 10 Fintech Trends are busy enjoying some spring sunshine.

Big-dog acronyms AI and VR are floating in the shallow end of the pool, having dispatched API and P2P to fix them up some cocktails. Mobile Wallet and Gamification are playing volleyball against Blockchain and Robotics. And, under a distant palm tree, Chatbot and Roboadvisory are locked in a long, sangria-fuelled debate about semantics.

Today, we’re judging our 10 assembled Fintech Trends based on, among other things, scalability, maturity, hype-to-reality and customer impact. Let the judging begin!

#1 AI: Hottie

Financial services have become somewhat of a home away from home for AI and machine learning. With massive volumes of customer, market and risk data needing to be processed daily – upon which billiondollar decisions depend – it’s like Christmas came early for algorithms.

Take insurance for example: thanks to AI, underwriters can draw in real time from as many data sources as they care to, getting closer than ever before to the “real” price of risk, and even see accidents before they happen.

AI isn’t just being talked about in financial services, it’s actually happening – and I think we’ll all agree that that’s pretty hot.

#2 Gamification: Hottie

As our attention spans get shorter and shorter, we can’t just expect people to process raw information. Whatever we wish to convey must be cooked into some kind of game.

As a result of this, personal finance has got so fun that I can think of little else. Investment apps like Moneybox have made putting away the pennies as fun for adults as gathering bananas was erstwhile for Donkey Kong.

On the insurance side, a host of wearables and black boxes (and often just mobile apps plain and simple) promise to make pretty much every aspect of locomotion and nonlocomotion a game too, from sitting and reclining to jogging and driving.

If there’s a free coffee in it – or even a rebate on petrol – then it’s definitely worth doing.

#3 Mobile Wallet: Nottie

Leading the way on mobile wallets is India, where the market is set to grow by over 150% in the next 5 years, with transactions totalling $4.4 billion.

Adoption in the US and UK lags however. In a survey of 706 financial institutions run by the Federal Reserve Bank of Boston at the start of this year, 80% reckoned industrywide adoption was 3 to 5 years away.

Close but no cigar.

#4 Blockchain: Hottie

Off its native terrain underpinning cryptocurrencies such as Bitcoin, the Blockchain has for some while been a bit of an Ugly Duckling. Endless talk about its applications left, right and centre, but scant action to talk of.

2018 may go down as a bit of a breakthrough year, then. Blockchain is not the full Swan yet by any means, but it’s got plenty of white feathers.

It’s making strides in Proptech, for example – next time your fourth cousin five times removed asserts ownership over your house, she’ll have to contend with a digital ledger that is not only immutable but distributed too.

Now let’s take commerciallines insurance. Carriers XL Catlin and MS Amlin, global shipping giant Maersk, EY and tech firm Guardtime recently banded together and launched an actual working prototype for blockchain in marine insurance.

And, last but not least, we have the personal lines. Looking to the future, our ambition is to take home insurance onto the blockchain – so that claim pain can become a thing of the past.

#5 Roboadvisory: Nottie

Until recently, roboadvisory was all the rage, with a clutch of new entrants seeking to disrupt wealth management, including Nutmeg (2011), Moneyfarm (2011) and Wealthify (2014).

However, adoption appears to have hit a temporary ceiling, with recent growth in assetsundermanagement due more to the uptick of the stock market and consolidation of existing accounts than to new customers.

Until we see more sustained massmarket adoption, we feel this is a trend it’s best to wait on.

#6 Chatbot: Nottie

I have tried, on many separate occasions, to have meaningful interactions with chatbots. And the problem isn’t with them – they are often surprisingly astute, endowed with an almost maternal intuition – the problem is with me. I just can’t prevent myself from plying them with nonsense, inanities and filth.

I’m clearly not alone. If Microsoft’s Tay is anything to go by, plenty of other people have had even less wholesome relationships with chatbots than I have. Designed to learn from what Twitter users tweeted at her, Tay fast became a raving, genocidal maniac that Microsoft was forced to shut down.

Every serious company and its auntie now has a chatbot. But research shows: large sections of your customer base actively dislike them.

Despite all this, chatbots are definitely here to stay, and they will definitely get better. But are they hot? Not since the lovely ELIZA in the summer of ’66.

#7 API: Hottie

Application Programming Interface. OK, this one is admittedly quite broad, with the “API economy” disrupting pretty much every sector, from public transport and windfarms to telecoms and shopping malls.

From a Fintech perspective, what particularly interests us here is the alluringly entitled Open Banking Initiative, whereby banks are to make customer data available via APIs to thirdparty apps and service providers of the customer’s choosing.

This unlocks, among other things, a richer service on comparison sites, personalised offers from retailers and insights on customers’ spending, saving and financial health.

In the past it seemed the banks had the customer around their chubby fingers. Now banks will have to work innovatively with startups to provide added value to their customers. Personal finance just got a damn sight more interesting!

#8 VR: Nottie

There may be a few niches where VR makes sense for Fintech – witness the BioBall game pioneered by Health Insurer Cigna and Microsoft HoloLens as a remote means to gather customers’ vital stats.

Aside from this, VR mainly appears as a bellsandwhistles extension of customer selfservice, as we see with PNB MetLife’s conVRse platform or BNP Paribas’ VR Banking Apps.

This seems pretty impressive … But, in a world where we can interact with brands via our mobiles, and where even having to boot up our laptops is often seen as too inconvenient, can we really expect a mainstream audience to go to the bother of whacking on a VR headset to check their bankaccount details? Probably not.


#9 Robotics: Hottie

Out of all our Trends, Robotics is the least sexy by a mile – and he doesn’t make up for this with heart or humour, or even with a good back story.

Yet, with silent and unflappable perseverance, he is working his way through every branch of every department of every sector of financial services. He’s probably at it right now, somewhere in your building …

Take insurance for instance, which has traditionally had high backend costs, representing the bloat of paperwork and manual processes. With Robotic Process Automation (RPA) now viable for large swathes of underwriting, claims and frauddetection work, insurers are gradually moving towards a leaner model: management by exception.

The eyes are drawn all too easily to fancy AIpowered pricing, or even IoT initiatives promising to eliminate claim events before they happen. But with such a high percentage of the typical insurance premium made up of admin costs, a greater costsaving can be passed on to consumers – at least in the near term – by engaging in a bit of RPA.

While our other Trends are too busy being admired by the pundits to notice, we’ve the sneaking suspicion that Robotics could eat everyone’s lunch – a dark horse for the winner’s cheque.

#10 P2P: Nottie

PeerToPeer has made waves as an insurance buzzword. The idea is laudable: replace today’s broken model (insurance by The Man) with something spangly and new (insurance by The Peers).

The thing is, the brokenness of today’s insurance is not necessarily to do with the model of insurance we’re experiencing. And the reinvention we’re talking about already exists under the ageworn, less techhippy moniker: mutuality.

You might instinctively point to Lemonade as a P2P success story – but has Lemonade ever really been P2P?

Within Lemonade’s model, peer groups exist for the dissemination of underwriting profits to different charitable causes but that’s it. In fact, P2P was seen as a sufficiently poor descriptor of what Lemonade does that the company dropped the P2P angle from their marketing way back at the start of 2017.*

Genuine P2P Insurtechs do exist but the going can be tough, with a steep hill to climb in terms of adoption and scalability – as witnessed by the collapse of UKbased P2P Insurtech Guevara in late 2017.

A cool idea – but there’s enough work to be done tinkering with the execution of insurance as we know it without trying to tinker with its essence as well.

*we think Lemonade is a great Insurtech company btw and this is why.


So, those are our ten Fintech Trends: 5 hotties and 5 notties. Who will be crowned the hottest Fintech couple of 2018? Judging sure is thirsty work, and it’s time for a cool drink and a game of dominoes in the shade. In next week’s instalment of Fintech Love Island, we reveal our 4 finalists – who’s made the cut? And whose door’s been shut? Only one way to find out …


>> Click here for Fintech Love Island 2