Mobile Financial Services
In this chapter, we look at how the financial services industry is leveraging digital channels to drive revenues and attract new customers. From a resurgence in direct operator billing to the proliferation of ‘neobanks’ redefining banking for digital natives, the financial services industry is undergoing fast change. The digitalisation of payment, banking and insurance services has only been accelerated by the need for remote access to essential services during the pandemic, along with the move for many societies to become cashless in the coming few years.
As part of the wider movement towards embedded finance, embedded insurance is predicted to become a lucrative space in the coming years. Embedded insurance is about presenting customers with more relevant, affordable, and personalised insurance offers when and where it is most meaningful to their experience and when they are most likely to avail of them.
New research also confirms that consumers have a keen appetite for embedded insurance. According to a survey by Cover Genius published in July 2021, 71% of digital banking customers in the UK would be highly interested in receiving embedded insurance offers based on their transaction data, as would 64% of traditional banking customers. ‘Convenience’ was the primary motivation for their interest at 49%.
As a market example, Hepster is a German insurance distributor founded in 2016 which provides embedded insurance and raised $10 million in funding in early 2021. Hepster offers the ability to purchase insurance coverage online for things like bikes, electronics, and travel. Coverage is offered on an annual basis or through a monthly subscription. Embedded insurance is enabled by abstracting insurance practices and optimising them through technology. This allows for risk mitigation solutions to be integrated directly into the customer journeys created by the provider.
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