Daily Review: How Will the Bank-FinTech Narrative End?

The ability to develop and adopt advanced technological solutions has been widely attributed to the startup community rather than to corporate players (banks, insurers, etc.). The year 2018 and the years ahead will be very different – corporations are gradually taking over the game by either aggressively pressuring startups in developing niches with own solutions, or by monopolizing the areas of advanced technologies applications by democratizing their adoption.

Prices will fall, technology will get more accessible to businesses, and the startup community will face not only peer pressure but a revival of corporate players that are re-exploring channels, niches, and products/solutions after going through a learning curve in various forms.

The bank-FinTech narrative may pass the stage of beautiful friendships and head straight to institutions using startups’ own weapons against them, leading to a massive consolidation in an unviable and expensive community of 11,000+ financial technology firms operating around the world.

Pick #1. AIA Enters InsurTech Arms Race with Snappy 3-Minute-To-Buy Online Platform

AIA, the largest life insurer in Hong Kong in terms of market share, has launched a new online sales platform that will enable customers to buy insurance products in three minutes.

Known as the AIA iShop, the platform will allow customers to search nine simple insurance products. The products include life, medical, and personal accident cover. Customers can access the platform via their smartphone or desktop computer. The claim process has been shorted by two working days if the documentation is submitted electronically.

AIA introduced a robot last month called Andy to answer insurance-related questions from customers.

In January, Manulife introduced electronic methods to receive claims. Meanwhile, in October, MetLife Hong Kong started using big data to analyze the behavior of customers to determine medical premiums, while Allianz has started using big data to determine motor vehicle insurance premiums.

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Pick #2. Westpac Ends Prospa Deal as Banks Plan More Unsecured SME Lending

Westpac has ended its referral relationship with Prospa.

We did not continue our contract with Prospa because we are working on developing our own products that will satisfy more of our customers’ needs, a Westpac spokesperson said to The Australian Financial Review.

CBA has also formally ended its referral agreement with Nasdaq-listed business lender OnDeck in order to focus on its own product offering. CBA also established this deal in 2015; it is understood the decision to end it was made after a 2016 pilot program and it formally concluded earlier this year.

We regularly review our strategic partnerships and have made a decision to end our agreement with OnDeck. We have a range of competitive lending options that are suitable for our small business customers, a CBA spokesperson said.

NAB is ramping up its own unsecured small business lending product – QuickBiz, which was launched in 2016 and now makes loans of up to $100,000. NAB said it can make credit decisions within 60 seconds and offers a fixed annual interest rate of 12.95%, compared to an average annual rate of 41% offered by Prospa. However, NAB is understood to apply tougher lending criteria to prospective borrowers. The bank says more than $3 billion was lent to SMBs during FY2017 on an unsecured basis.

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Pick #3. Zurich Insurance Buys Minority Stake in InsurTech Startup CoverWallet

Zurich Insurance Group has acquired a minority stake in CoverWallet, a digital business insurance agency startup. The February-announced partnership helped CoverWallet’s bring its US platform to Europe, enabling Zurich to provide small businesses with a platform to learn about types of policies, get quotes, purchase insurance, and manage their coverage online in minutes.

The CoverWallet platform provides users with real-time quoting, underwriting, binding, billing, and servicing capabilities. Zurich leverages CoverWallet’s B2B platform to sell its policies directly to small businesses online.

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Pick #4. Credit Card Companies to Launch ‘Finger Vein’ Payment System

Credit card holders will be able to pay with their fingertips at convenience stores in Korea starting October. Three major card companies – Shinhan, BC, and Hana Card – announced that they were developing a biometrics payment system that authorizes transactions by scanning fingertips.

To implement this system, credit card companies signed an MOU with two IT service providers: LG-Hitachi and NICE Information & Telecommunication.

It’s not just finger vein technology, we are trying to diversify payment methods that can reinforce each other, a Shinhan Card spokesperson said to the Korea Times.

Lotte Card introduced the vein-mapping payment method when it launched its hand scan system in May 2017.

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Pick #5. How to Complete Your Temporary Residence Registration Online?

According to article 39 of the Exit and Entry Administration Law of the People’s Republic of China, expats who reside or stay in accommodations other than hotels and those who accommodate them must process entry registration formalities with the public security office closest to their place of residence within 24 hours after the foreigners’ arrival.

Now, those expats don’t have to go to the public security office. Instead, they can register their entry to China at home through WeChat. Shenzhen is the first city in China to allow the complete registration to be done online.

How to do it:

  • Find the menu pertaining to the registration of residence for expats.

  • Fill in the required info (phone number, email address, ID number, and household information),

  • Scan the QR code on your apartment door to get your household information.

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Pick #6. IBM Unveils an AI Supercomputer

Summit, a 200-million-dollar system designed by IBM for the Department of Energy’s Oak Ridge National Laboratory, is tailor-made for big data and AI workloads. Capable of 200 quadrillion floating-point operations per second when fully operational, Summit is expected to handily beat out the Chinese system that currently tops the charts.

IBM won the contract to build Summit and a smaller system back in 2014. The deal came in the early days of IBM’s effort to bring new life to its POWER chips. Summit features more than 9,000 of IBM’s POWER9 processors, as well as roughly 28,000 GPUs from NVIDIA. The system can move 25 gigabytes of data per second between nodes.

In the press release announcing the deal nearly four years ago, IBM explained the need for an architecture built around the movement of data: The current approach to computing presumes a model of data repeatedly moving back and forth from storage to processor in order to analyze and access data insights. However, this approach becomes unsustainable with the onslaught of big data because of the significant amount of time and energy that massive and frequent data movement entails.

IBM had to design a new system architecture to solve the problem posed by big data. This architecture is already available commercially in IBM’s latest Power AC922 system, which launched late last year.

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