The Rise and Rise of InsurTech
In another sign that InsurTech is one of the fastest growing and exciting FinTech sectors, the first InsurTech firm went public recently. ZhongAn Online Property and Casualty Insurance, floated on the Hong Kong Stock Exchange at HK$59.70, raising US$1.5bn, valuing the firm at US$10bn.
According to the Financial Times, Zhongan is backed with venture capital and equity finance by some of China’s largest finance groups and the public floatation has helped bring in prominent investors including the Japanese firm, SoftBank. Additionally, the big Chinese online firm, Ant Financial (an affiliate of Alibaba), is also a large shareholder in the online insurance firm.
Importance of Big Data and IoT for Financial Intelligence
The always-connected ecosystem in everyday lives has gained further traction with more and more sensor embedded wireless connected devices. Connected cars, smart healthcare wearables, and smart homes, are some of the active components of an IoT network today. Together with the hyper-mobility adoption, more data is being generated seamlessly in real-time. Increases in computing power and cloud deployments have also enabled this big data to be stored, processed and analysed at great speeds.
The Competitive Advantage of HPC
In an era of financial convergence, faster processing speed (HPC) is the mainstay of faster analytics and quick decisions. Growing regulatory demands also call for speedier insights in trading, risk management, and customer care. Greater operational agility to respond faster to market changes is often the game-changer in Fintech and Regtech, saving billions and ensuring timely regulatory compliance.
Bringing Sensor Data Analytics To Insurance (InsurTech)
A major development in the ever growing insurance and technology industry – known as InsurTech – is in the realm of sensory data analytics. Technology is improving such that a greater and more accurate range of data can be collected with regard to activities that are typically insured – the main and most obvious of these is obviously driving but more increasingly it is being expanded to day-to-day activities which are of interest to health and life insurance firms.
FinTech Credit Market Structure and Potential
While the FinTech credit market in most jurisdictions currently makes up less than 5% of the countries’ new credit applications, the market has expanded rapidly and considerably over the last few years. Between 2013 and 2015 alone, the credit market more than quadrupled in most European and North American jurisdictions. In China, it expanded by a multiple of nearly twenty. In short, the market potential for legitimate and reliable FinTech credit providers is increasing.
What are the Main Risks of FinTech Credit?
FinTech is booming, as more and more people seek out alternative financing methods to traditional banking and investors. The benefits of these methods are numerous. They give entrepreneurs access to finance that they may not otherwise qualify for. They also give investors the opportunity to put money in new innovative ventures which might otherwise never have entered the market. But, these types of investments also come with their own risks and their fair share of scandals. Those looking for and investing in the alternative FinTech credit market would do well to get to know and understand these risks.
5 Types of Fintech Business Models
Fintech Credit market lacks a globally accepted format. The heterogeneity has led to the development of quite a few business models that are functioning in the industry world over. While we’re sure these will change over the years as Fintech becomes more established and focuses on developing risk and fraud management, these are the 5 types of Fintech business models.
FinTech’s Biggest Concerns in 2017
With the FinTech market being on an all-time rise, the industry needs to now look at how it can work on improving regulatory frameworks, risk management, and fraud management.
Currently, there are no globally accepted standards for regulatory frameworks of the Fintech Credit market. Most governments have designed the regulations by modifying the existing financial frameworks or by developing a new system altogether.
Cyber Risk and Reputation Management
In recent years, more and more companies have succumbed to cyber attacks. This is particularly an issue in the financial services industry, where hackers and cyber terrorists launch attacks on banks and other financial firms in order to profit monetarily, usually by holding the company to ransom. These are often known as the denial of service attacks whereby hackers will launch an organised attack on a firm to shut down a range of services and then demand payment in order to cease the attack.