As the FinTech and InsurTech industries grow, products are emerging that incumbent institutions have not been able to provide, including access to financial services for consumers who have previously been denied. These customers have previously been assessed as too risky but startups are now using Big Data analysis and biometrics to verify potential customers and manage their risk. Banks can offer near instant access to accounts for consumers with no financial footprint or permanent address, and insurers can offer policies to consumers living with chronic illness.
This is made possible by the ubiquitous nature of smartphone ownership, the ability to quickly crosscheck many data points, and more sophisticated biometric analysis. Here are our four favourite innovations that are making the financial world more inclusive:
AllLife provides life insurance and disability cover for people living with HIV and diabetes. The policies are created using data-driven algorithmic pricing and continuous underwriting, in order to make them affordable for previously uninsurable segments. In addition, customers must commit to an adherence programme of ongoing health monitoring and treatment.
This startup aims to bring financial access, choice and control to everyone, by providing micro-loans to those who don’t have a formal credit score or banking history. Tala evaluates a potential user’s risk and capacity by using 10,000 points of data from their smartphone, based on past purchases, social media use and search history.
Digital-only bank Monese, aims to provide services to those newly entering the UK, such as immigrants. The bank allows users to setup a current account instantly, without a UK address or credit history, directly on their mobile.
Around 30% of consumers in the USA and EU15 derive their primary income from short-term, independent work. Slightly over half of them do so out of financial necessity. Bunker offers insurance for workers in the gig economy, with flexible, simple and quick policies to ensure compliance. Freelancers and small businesses seeking insurance to fulfill a contract can buy it on Bunker, who will also let the client know insurance has been purchased.