Only half (50%) of the Australian insurance sector believes enough is being done to maximise the value of insurtech collaborations and drive real digital innovation across the industry, according to a new report released today by Ernst & Young, Australia (EY Australia) and Insurtech Australia.
The third annual survey of Australia’s insurtech ecosystem found that partnerships between incumbent insurers and insurtechs are becoming increasingly common – 80% of insurers are currently collaborating with an insurtech – but most are still occurring on a small scale, for specific point solutions within individual pockets of the business. To move to the next stage of optimisation and fully harness the benefits of insurtech, insurers will need a clear, holistic digital strategy and an implementation roadmap that addresses legacy technology issues.
Pivotal areas that Australian insurers, insurtechs and insurance industry providers agree are ripe for digital innovation include efficient administration, claims, pricing and underwriting agility, and developing new products to deliver differentiated customer propositions.
Andrew Parton, EY Oceania Insurtech Leader said: “While it’s pleasing to see more collaboration and partnerships occurring, most Australian insurers are still only using insurtech tactically, rather than trying to develop a more strategic whole-of-business digital ecosystem.”
“For the sector to fully realise the transformative potential of insurtech, insurers will need to move beyond random acts of digital and put the right infrastructure in place so that their legacy systems can connect with new technologies and support plug-and-play integration capabilities,” Mr Parton said.
“Over the next few years, we are likely to see the sector moving beyond simple alliance models. In fact, our research shows that the Australian insurtech ecosystem may look quite different in three years’ time, with 58% of insurers anticipating a high level of acquisition activity as they seek to obtain their own capabilities in this space. Fifty-eight percent of survey respondents also expect to see consolidation of insurtech providers during the same period.”
“Currently, 63% of insurers have current partnerships with between 1 and 3 insurtechs, but only 14% are partnering with 5 or more. This will change over the next few years as insurers seek to increase their number of insurtech partnerships to broaden their digital ecosystem and extend insurtech use across their entire value chain. However, such innovations will rely on insurance processes being able to easily interact with external APIs, cloud-based systems, and IoT devices and sensors. Digital enablement platforms could provide a short-cut to making these connections and support the transition from old to new distribution channels, without needing to entirely replace core legacy systems,” Mr Parton said.
Rita Yates, Insurtech Australia CEO said: “It is positive to see that the majority of the industry agrees that insurtech will play a major role in helping incumbents become more digitally capable in the future, and that incumbents and insurtechs were both aligned in this level of thinking.”
“It is clear that insurtechs in Australia offer a wide range of potential solutions. We now have a real opportunity to optimise future partnerships so that their value can be realised at scale. In order to do this, a clear understanding is needed of what elements are critical to get right during the partnership process,” Ms Yates said.
Everyday Uses of Chromatography
Chromatography is a term that many people may not be familiar with, but in many ways, chromatography affects our lives every day. Chromatography is essentially the process of separating a compound from a mixture, so it can be useful in many industries to analyze data and draw conclusions. Even if you don’t necessarily use chromatography every day, the benefits associated with the process affect your life daily.
Of the many everyday uses of chromatography, crime investigation via forensic testing is one of the more well-known. If you have ever seen a crime show on television, you have seen chromatography at work. In a real-life criminal investigation, gas chromatography is used to investigate cases. When investigators assessing the crime scene and collecting evidence, forensic labs use chromatography to analyze the evidence. Chromatography is also used to investigate arson. Gas chromatography can detect whether a liquid accelerant was used to start the fire. Another form of chromatography used in forensic testing is ink chromatography. Ink chromatography is used to match the ink on a document with the pen that belongs to the suspect.
Chromatography is used to test food from the source to the final product. There are many chromatography applications in agriculture, as well as in the food industry. Basically, chromatography gives us a better understanding of what exactly is in our food and whether is it safe to ingest. Chromatography is used to identify any harmful pesticides in food. Chromatography also keeps consumers safe by fact-checking nutritional value and ingredients. This is especially important for anyone with food allergies or sensitivities. For this reason, chromatography is used to test food that is gluten-free or vegan, as well.
Source: Christina Duron is a freelance writer for multiple online publications where she can showcase her affinity for all things digital. She has focused her career around digital marketing and writes to explore topics that spark her interest.
Payment Service Provider PingPong Payments Secures E-Money License in Luxembourg
PingPong Payments, a payment service provider for e-commerce sellers, announced on Wednesday it has received its authorization as an Electronic Money Institution (EMI) by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Founded in 2015, PingPong stated that its mission of helping global e-commerce sellers keep more profits, by beating the rates traditional banks offer.
“Today, the company serves more than 600,000 online sellers worldwide, has processed more than $10 billion in cross-border payments for e-commerce merchants to-date, and transfers more than $100 million per day for international e-commerce sellers. Global merchants around the world trust PingPong Payments to help them save on cross-border payments, VAT & supplier payments, and more.”
PingPong reported that the license enables it to offer a more flexible array of services and increase the scope of customers in the future. Speaking about the license, Ning Wang, Co-Founder and Chief Business Officer at PingPong, stated:
“We are extremely proud to announce obtaining an EMI license in Luxembourg, a world-renowned fintech hub and pioneer within the EU market. This will strengthen our existing services which can support customers on different market places such as Amazon, eBay and Walmart and grant us the flexibility to broaden our business model to beyond e-commerce platforms.”
Pierre Gramegna, Minister of Finance, Luxembourg added:
“Today, Luxembourg is one of the leading payment and e-money hubs in the EU and I’m happy to see that it continues to grow. In this sense, I welcome that PingPong has just upgraded its Luxembourg presence with a new e-money license that will help it better serve its European customers.”
Do China tech giants pose a risk for European banks?
China’s Ant group may have been dealt a setback with the shelving of its IPO but European banks remain wary that Chinese tech giants may soon be their main competitors.
The European finance sector has in recent years seen the emergence of a large number of startups—called fintech—which have sought to disrupt brick and mortar banks by offering digital services.
While they have yet to really threaten established banks, the fintechs have forced them to dust off their operations and invest massively into providing similar digital services.
“The real competitor of tomorrow will likely be the GAFAM or the Ants of the world which have the capacity to invest considerable sums,” the head of France’s Societe Generale bank, Frederic Oudea said recently, using a French acronym for Google, Apple, Facebook, Amazon, and Microsoft.
US tech giants have been making more beachheads in financial services an area where their Chinese rivals are already well advanced.
From chat to super app
Ant Group, which was hoping to raise a record $34 billion with its IPO before the Chinese government pulled the rug out from under the operation, is the owner of Alipay, a payment platform which is now an unavoidable element of daily life in China.
Its prinicipal rival in China is WeChat Pay, owned by Internet giant Tencent.
“The companies which originally developed chat software have a strong interest in enhancing these activities as they enable them to cover an even broader range of people’s day-to-day activities,” said Christopher Schmitz, an expert on fintech at Ernst & Young.
“Gradually, an ever larger-growing share of people’s spending goes to these companies,” he added.
The Chinese have widely adopted paying by flashing QR codes of vendors on their smartphones using Alipay or WeChat Pay due to its convenience.
Alipay alone has 731 million monthly users.
In just a few years these two platforms have transformed China from a country where cash was king to a society where smartphones are the payment medium of choice.
These companies are not content with just offering payments. They offer more financial services, including the ability to obtain a loan with just several clicks.
“Alipay generates more revenue from the financial services that it offers, such as investment schemes and loans, than the payments themselves, which is really just the tip of the iceberg of what has become a super app,” said Adrien Boue, a consultant on the electronic commerce market.
He said “the goal is that users stay in the app as long as possible. From morning to night, there is always a functionality there: speaking with friends, ordering a taxi, ordering food and even working on collaborative projects.”
“The most advanced model in the financial sector—it’s China,” said Oudea.
The question is just how much of this model can be reproduced in Europe, especially after Ant Group’s IPO setback, which some observers see as a move by the Chinese authorities to bring an overly ambitious firm to heel.
“Our banks are still a bit protected,” said Julien Maldonato, a financial services expert at the Deloitte France consultancy. “There are still cultural barriers, but these won’t protect us forever.”
One of those cultural barriers are QR codes.
“In Europe, payments based on QR codes are noy very popular,” said Ernst & Young’s Schmitz.
The fragmented nature of Europe with its different languages and cultures also makes it difficult for an outsider.
But Maldonato noted that American tech companies are already very much present in the daily lives of Europeans, and China’s TikTok has attracted young users who are “the banking clients of tomorrow”.
It is the capacity of the Chinese companies to plough money into developing new technologies and acquiring customers—they each plan to invest some $70 billion over the next five years—that could really change the game.
“That worries the Americans who will accelerate” their investments as well, said Maldonato, while European companies will have trouble coming up with even a few billion.
Nordigen launches first-ever free open banking platform to challenge Tink and Plaid
Latvian fintech Nordigen today launches the first-ever free open banking API platform. This will enable developers in companies of all sizes to access PSD2 open banking data from major banks from across Europe via a single API. In addition to offering free open banking connectivity, Nordigen will continue to provide premium data analytics and insights services, which it currently offers to more than 50 global fintechs, banks and lenders operating across 19 countries. Nordigen’s new platform provides connectivity to 29 countries in the European Economic Area, including the UK.
For the majority of fintechs, accessing open banking data is prohibitively expensive. Incumbent open banking companies require payment for every single connected end user, meaning the cost of access rapidly rises for fintechs as they scale. Moreover, the market is difficult to navigate – there are more than 380 AISPs in Europe, many of which offer connectivity as a service. Each of them has a different pricing model and API documentation. This makes accessing open banking data both expensive and technically challenging, while the limited geographical coverage of most existing providers forces clients to resort to a patchwork of different solutions. Usage of PSD2 is not yet mainstream beyond the UK. Nordigen’s new freemium, pan-European model removes the financial barrier while simultaneously simplifying the process of choosing and integrating to an open banking platform.
Rolands Mesters, CEO and co-founder, Nordigen, said: “In Europe, the business model of charging for open banking data, as Tink and Plaid do, will soon be history. Nordigen is the first to launch a free open banking data service, but we certainly won’t be the last. We believe the future of open banking is in the freemium model and that the rest of the industry will soon follow.”
Unlike competitors, who require heavy technology stacks using custom bank integrations built before the age of open APIs, Nordigen is able to offer a freemium service thanks to a lightweight technology stack that relies exclusively on PSD2 bank connections. Nordigen built its platform with pure open APIs in mind right from the start, focusing on providing the raw banking data that most developers are looking for. This is done in a steady, robust way and without the need for screen-scraping or reverse engineering.
Rolands Mesters, CEO and co-founder, Nordigen, continued: “By removing the barriers to accessing financial data, we’re aiming to enable more companies to translate their ideas into reality and drive the innovation and competition open banking regulation was originally meant to foster. It’s ironic that companies wanting to make finance more inclusive and fairer should find open banking data, of all things, out of reach for financial reasons.”
“Our new freemium model is there to help more fintechs solve real-world problems, and there has never been a more crucial time for this. The Covid pandemic is accelerating uptake and showing us a glimpse of the transformational potential open banking has to offer, but we need something more to help companies turn their bold visions into reality. Free access to open banking is that, ” he added.
Nordigen’s new data connectivity platform complements its expertise in data analytics. Since 2016, the company has helped clients across the globe extract more value from data to make better decisions, especially when it comes to assessing the creditworthiness of loan applicants. Nordigen is planning to raise a Series A in 2021.
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