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Blockchain buzz masterclass

Alec Ross in The Industries of the Future states that blockchain will be to banking, law, and accountancy as what invention of the Internet was to media, commerce, and advertising. Blockchain is expected to lower costs of transactions, disintermediate multiple layers of business activities, and reduce waiting time. In one of the TED Talks Bettina Warburg explains how blockchain is to transform economy through it decentralization, leading to a change of roles of traditional institutions such as governments, banks and many others.

In a very simplified way, blockchain can be explained as a digital file set for recording transactions between parties which collectively have agreed to adhere to protocols of communication and validation of the data stored in the file. The word block in the blockchain would stand for container data structure and chain would imply multiplicity of the blocks. Key enabler of blockchain technology is Internet and peer-to-peer networks, which are prerequisite for Internet users to exchange any files.

Data stored in blockchain due to adhered protocols is resistant to modifications once it is recorded. One of security mechanisms in blockchain are called time stamps, which refer to possibility to record transactions in the blocks only for defined period of time and no possibility of altering transactions after.

Hence it’s believed that blockchain increases trustworthiness of transactions between those who interact through blockchain and further authentication of transactions by higher instances such as governments or banks is no longer needed. As a result of this digitally-increased trust, parties agree to eliminate reconciliation processes and reconciliation institutions, such as external, formal, or higher instances. If you are still feeling fuzzy about blockchain basics, you can find a step-by-step explanation of blockchain phenomenon, enriched with infographics, in short post by Mohit Mamoria available in this place.

In the light of theory of technology innovation blockchain is still a technology that emerges from other technologies competing for serving the same purposes. Such state is called standard battles and design dominance battles. Dominant designs once established set up stable architecture for technology development and encourage companies to use it, what spurs its prevalence and related global adoption.

Examples of dominant deign battles from the past included e.g. Video Home System (VHS) vs Betamax, or Blue-ray vs High-Definition Video. Once you realize that this is actual status of blockchain technology as a standard in adoption stage competing with many other standards, you’ll easily understand why discussions around blockchain are so dynamic and vivid in events, such as e.g. recent set-up of Blockchain Partnership by 23 European countries (joined by 2 other countries later), or creation of European Union Blockchain Observatory with significant budget planned to spend for technology development.

As blockchain belongs to so-called general-purpose technologies, what means its final application have not been exhaustively discovered yet, it can enable a new way of working in multiple  domains. Currently discussed domains include monetary exchange, energy and health management, legal contracting, supply chains transparency, and also governmental activities such as voting, handling birth certificates, or property records. As emerging and not finally regulated technology in design dominance battles, blockchain actively competes with cloud technology and other technologies from pre-cloud era enhanced by interoperability solutions.

In The Business Blockchain Promise, Practice, and Application of the Next Internet Technology William Mougayar pointed out that proof-of-concept for development of blockchain technology, also in other domains, was electronic cash, which was able to survive & participate in economic exchange outside formal & regulated financial institutions, such as banks. After proof-of-concept relating to cash other virtual currencies serving value transfer emerged, which enable to buy and sell goods, they are subject to economic exchange, and are listed at dedicated technology stock exchanges.

Applications of blockchain don’t limit to electronic cash and financial services. For energy market blockchain offered instant metering solutions for local energy generation that allow communities to buy and sell renewable energy. Blockchain is also discussed in electricity grid optimization context, and some companies apply combination of blockchain and so called smart plugs to allow electricity users to purchase energy in the real time and change suppliers if energy prices they agreed to pay diverge.

In healthcare domain blockchain offers health care and medical record solutions, such as the possibility of saving medical records (traditionally stored in paper form) on a secure and convenient digital file, which are being developed are portable and safe, and offer clinicians up-to-date patients  files available everywhere any time with patient’s permission. One of large-scale implementation of blockchain in healthcare takes place in Estonia, where health records have form of distributed files, which can be opened with Estonians digital ID Cards.

Storing health records in blockchain might foster interactions of patient with multiple healthcare delivery institutions, research on aggregated patient’s data by scholars, reduction of frauds toward national healthcare payers and healthcare insurance institutions as all clinicians visits and medical procedures within blockchain based healthcare record would leave the time stamps, explained in earlier part of this post. Blochchain-based solutions in healthcare also cover enterprise medical imaging or genomics.

Additional dimensions of blockchain for healthcare are  elaborated in Who Will Build the Health-Care Blockchain by Mike Orcutt, or Potential for Blockchain to Transform Electronic Health Records by John D. Halamka, Andrew Lippman and Ariel Erkblaw. Start-ups and entrepreneurs developing blockchain technology in European Union might be interested in start-up accelerators located in France, Italy, or Poland; and also World Blockchain Forum dedicated to this technology planned in London between 5th-9th of September 2018.


How Start-ups Disrupt Insurance Business?

Recently researched insurance providers acknowledge that their business is undergoing massive disruption. It occurs due to insurance technology (InsurTech) start-ups, which overcome regulatory issues quicker,  understand platform economics better, dig out market insights deeper, and deliver customer experience not available before.

What is there for insurance holders?

If you are a car owner who pays their car insurance each year and doesn’t drive that much, you might feel insurance prices are a little bit unfair for you. Metromile proposes pay-per-mile car insurance model, which results in less money spent on insurance for those who drive only occasionally.

Extensive drivers might be interested in comparing vehicle insurance offerings in their area before they decide which one to purchase. Everquote provides such quotation, comparison and connection of drivers with insurers in their areas.

Goji also aggregates insurance company’s data in once place and presents you low price insurance options based on your car, driving profile, and needs.

Drivers, who insure their cars, but want to avoid situation when issuing insurance claim is needed might appreciate Zubie. Zubie promises to make your car exploitation smarter by enabling scheduling maintenance alerts, providing trip analyses, and delivering driving style feedback for greenhorn drivers.

Benefits offered by companies are also the domain of InsurTech disruptors. This area might be particularly interesting for companies eager to attract and retain employees, for whom personalization of benefits portfolio matters. Liazon enables employees to configure their non-financial benefits mix including health, lifestyle, saving plans, and of course insurance items.

Stride Health enables employees to optimize and manage health & dental services on their mobile devices, and also offers concierge and preventive services aiming at discounts and savings for their customers.

Those who travel with their valuable items could be interested in Trov. Company offers on demand insurance for damages, losses or thefts for laptops, tablets, digital cameras, and music instruments.

Insuring cars, travels, real estates or business activity might not be easy, and people often need solid advice with human contact. Therefore Coverhound, PolicyGenius or Finance Fox along with identification of insurances matching customer needs provide you with time of licensed advisors to walk you through them. As advising on particular insurance product could be biased by commission fee received by advisors from products sold, these companies transparently explain how they remunerate their advisors.

Some InsurTech start-ups focus on single product and specific type of customer. On of such is Ladder Financial providing value for customers interested in personal insurance. Artificial algorithms of Ladder Financial deliver initial insurance quotation matching person’s profile and needs within blink of an eye. Issuing insurance policies takes place online and is backed-up by existing, reputable insurance companies.

Quotations of personal insurance policy on demand, which take into account vide tapestry of people professional profiles are offered by Next Insurance.

What is there for insurance carriers?

InsurTech start-ups haven’t forgot about companies thattraditionally have been offering insurance policies.  EIS Group for example offers a multi-line insurance platform, which fosters customer’s relationship management (CRM) of insurance carriers. It’s modular in design and support processing policies, billings and claims, offer analytics, and enable engagement with customers within whole insurance lifecycle.

Acquisition, retention and growth of customer base is essential in every business. For companies that use call centers in daily operations with their customers Cogito offers solution enabling real-time analysis of phone conversation to provide immediate guidance for better engagement and connection with customers.

One of the most important parts of operations management in insurance business is claim management, which relates to request to insurance companies for payment relating to insured incident, damage, or loss. Snapsheet offers technology that enables settling claim between insurance holder and insurance carrier in virtual environment.

As claims to insurance companies are often unjustified, and might be an object of frauds, Shift Technology provides insurance carriers with artificial algorithm analyzing insurance claims to prevent such situations.

As insurance business in essence is about managing calculated risk, some carriers might appreciate proposition of Cloudcover with virtual risk diagnostic analytical tool and real-time risk visualization panes enabling advance risk analytics.

Calculating risk is crucial to determine insurance policy terms. Therefore in certain types insurance use drones or satellite images, which enable to predict certain events impacting on risk. Orbital Insight for example offers analysis of millions of satellite images at a time, which can support anticipating crop, or oil shortages, predict deforestation and other natural and social disasters.

What is there for InsurTech start-ups?

InsurTech start-ups require good orientation in regulated environment to hone their MVPs and run pilots of their products. Innovation ecosystem stakeholders, which might be supportive here, include company builders or start-up accelerators partnered with insurance companies. One of InsurTech company builder is FinLeap, which seat is in Berlin. FinLeap provides access to specific technical consulting, development platform, stakeholders’ network, and also up to EUR 5 mln seed financing.

One of star-up acceleration programs focused on InsurTech is Huge Thing organized in Poland with application deadline at 2nd of April 2017. 10 start-ups qualified to the program will experience mentoring from one of the biggest financial institutions in Central and Eastern Europe and travel to Berlin and London. They’ll also be able to apply for EUR 45k equity free investment within the program.

What will be the next InsurTech big thing?