Recently I came across quite a few news and articles around the future of financial services, and found a common pattern. It seems to me that they all lean to 3 key words:
- Decentralized (or Peer-to-Peer)
- Real-time
- Low fee (even zero)
FinTech
Thinking about the Bitcoin technology, which decentralizes the currency control, enables real time money transaction, and with low transaction fee due to the characteristics of digital currency.
Sending money to your family or friends is as simple as sending emails. It happens real-time and nobody charges us additional fee in between (unlike wiring money thru a bank to your family living in another country).
InsurTech
InsurTech (i.e. Insurance Technology) is another form of financial services that has been centralized by insurer (insurance company). What if that 3 key words are applied to the existing traditional insurance service?
Imagine, if I have 10 friends and we all agree to put $1000 USD every year to a pool called “Buddy Rescue Fund”, and we also agree that if any of us got hospitalized and need some urgent money to pay for surgery, we will use this Buddy Rescue money to help each other.
RealEstateTech
What if the seller and buyer can make a deal without a real estate agent in between getting 3% margin from the seller and another 3% from the buyer. If the deal can happen in the Internet – digital contract, digital money, etc., agreement and transaction happen real-time without an agency, means no admin fee required.
Seems that airbnb has a very similar model. The contract of borrowing a place to stay is digital, money transfer is online with credit card. However, airbnb takes a certain % of service charge. I believe airbnb has some value added services with this charge (e.g. they act as regulator if problem happens).
Food For Thoughts
When we run out of innovative idea, it may not be a bad idea to try applying these 3 key words to existing traditional services and see if they can be transformed into something new and interesting.
Image Source: http://banknxt.com/55331/fintech-insurance-insurtech/
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