Insurance carriers have been collecting data and information since the Stone Age, it seems. The amount of data they have on their current and past policyholders as well as consumers that have inquired yet never purchased is far more extensive than that of any other industry. But what are they doing with the data?
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According to the Small Business Administration, the value of small-business loans outstanding in the United States is about US$600 billion. This large number, coupled with small businesses’ growing need for credit to start and run their businesses, makes this space an attractive one not only for financial institutions but also for the growing number of alternative lenders popping up and posing a threat to traditional ways of evaluating and originating credit.
Two recent articles—one in Reuters and the other in PYMNTS—tell a distressing tale of just one of China’s person-to-person lenders’ fraud schemes that in 2015 wiped out the investments of 900,000 individuals for a total of US$7.6 billion. The P2P lender (Ezubao) admitted to fabricating projects so that investors, seduced by clever branding and television advertising, handed over all those billions in just two years.
Paybefore recently announced its 2016 prepaid awards, which highlight a number of great innovations in the prepaid space. While the prepaid space has faced regulatory headwinds over the past year, merchant and consumer interest in the product offerings continue to grow. Here are a few of the standouts that caught my eye. These bring solutions to very real problems (unlike the erstwhile Kardashian card and its ilk, which are the types of offerings that draw regulator attention to the prepaid space for all the wrong reasons).
If there was one key takeaway from FinovateEurope in London this February, it was that the vast majority of fintech firms have changed their approach toward working with financial institutions and, for that matter, larger incumbent vendors. The focus is now less on “disruption” (whatever that means) and more on partnership. The biggest buzzword/concept of the event therefore appeared to be “white labelling”—taking these startup vendors’ tech and putting your own brand on it. In this manner, the financial institution or incumbent vendor gains innovation, and the startup gains credibility (albeit behind closed doors) and income.