Wave Mechanics: FT Partners Report Highlights Trends Driving Rise of Insurtech


“Insurtech” isn’t about providing financial assistance to distracted gamers who injure themselves playing Pokemon Go (though there is that). It’s a growing, thriving aspect of financial technology that is becoming a category of its own – apart from the world of payments, robo-advisors, and PFM that characterizes much of what we call “fintech.”

The new report just released from FT Partners helps financial services execs better understand the rise of insurance technology. Prepare for the Insurtech Wave: Overview of Key Insurance Technology Trends is a 247-page research report that details trends in insurance distribution and administration, data and analytics; and sales, marketing, and engagement; and puts into context the opportunities from the “new technologies and transformative business models” that are “targeting all areas of the multi-trillion dollar global industry.”


A few key metrics from the report:

  • Total premiums for all insurance sectors in 2015: $2.0 trillion
  • More than 6,000 insurance companies in the U.S. employ more than 2.5 million.
  • Property and casualty (P&C) insurers generated $64 billion in net income in 2014. Life and health insurance companies generated $38 billion.

What makes insurtech especially interesting is where it sits at the nexus of the pace of technological innovation and the reality of an ever-evolving regulatory landscape. Prepare for the Insurtech Wave reveals an industry responding to this challenge in a variety of ways from starting ventures arms to teaming up with startups tackling key pain points, as well as those best poised to take advantage of new technologies such as the Internet of Things. This, the report notes, has “huge implications across the insurance value chain.”

The report highlights the “Disruptors” of insurtech, a group of 40 startups that includes Finovate alums CoverHound and Sureify, as well as what it calls “established tech-enabled companies” such as insurance software developers Ebix and even 3D aerial measurement services and reports startup from Seattle, EagleView Technologies. Also listed are major recent insurtech M&A and financing transactions such as the $500 million raised by Zenefits and the $160 million to Clover.


Prepare for the Wave underscores the importance of convenience, speed, and transparency for the modern insurance consumer, encouraging the industry to embrace multi-channel engagement and new products like micro insurance. The report also looks at the role of the insurance agent, noting that a growing preference for insurance shopping online (61% of consumers between the ages of 18 and 54 saying that would purchase life insurance online in a recent PwC poll), as one of many factors that are likely to undermine one of the industry’s historically most relied-upon distribution channels. “At a time when life insurance ownership is plummeting,” the report reads, quoting the PwC poll, “life insurers are waking up to an inconvenient truth; Decades of relying on an agency distribution system have left them woefully unprepared to survive in today’s consumer driven economy.”


At the same time, the report notes that “the incumbents do not have their heads in the sand.” Note that:

  • Among traditional insurers, 43% are planning to “acquire or have already acquired innovative startups to help expand digital capabilities.”
  • More than half have “already invested” in social media, data mining, and predictive modeling
  • Approximately 68% embracing mobile technology.

Additionally, Ptolemus Consulting is cited, pointing out that insurance companies have “launched nearly 230 telematics programs worldwide, in twice as many countries as two years ago.” Telematics is the intersection of telecommunication and informatics, and is a part of the Internet of Things (IoT). Specifically, it refers to the collection and transformation of data via sensors in a “connected” vehicle or building for the purpose of risk assessment. The report concludes with an extensive Selected Transactions section, detailing fundraising, mergers, acquisitions, and other relevant deals involving insurtech companies.

About FT Partners

Founded in 2001, Financial Technology Partners is the only investment banking firm dedicated exclusively to financial technology and a long-time sponsor of Finovate events. The firm named Investment Banking Firm of the Year in 2016 and Deal Maker of the Year in 2015, has offices in San Francisco and New York. Steve McLaughlin is founder and CEO.

Finovate Alumni News

Around the web

  • Fiserv inks deal with FCTI to provide transaction processing for 8,000 ATM in 7-Eleven convenience stores in U.S. Video of Fiserv’s recent live demo from FinovateFall is now available.
  • NCR launches cloud-based developer portal.
  • ACI Worldwide and Vocalink partner to provide real-time payments solution.
  • Let’s Talk Payments interviews Linkable Networks founder and CEO, Tom Burgess.
  • Visions FCU signs with MX for money management app.
  • Zopa releases its first-ever rating of a batch of securitized Zopa loans.
  • Sezzle Wins $10,000 from Securian in MN Cup Startup Competition.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

SocietyOne Strikes Up Partnership with Beyond Bank, Reeling in $1.5 Million


Australia-based P2P lender SocietyOne announced a new bank partner today. The company has teamed up with Beyond Bank Australia, a $4.8 billion customer-owned financial institution.

Beyond Bank has contributed $1.5 million for an equity stake in SocietyOne and has increased its funding commitment in personal loans on the site to $10 million. The bank anticipates the investment will expand its footing in the fintech sector; CEO Wayne Matters describes the partnership as a “perfect example of our approach to innovation, customer service and new product opportunities.”

This isn’t the first time SocietyOne has received funding from a bank. In 2014, the company received $5 million from Reinventure, a VC management funded by Westpac Bank. Westpac was believed to be the first bank to take an equity stake in a P2P lending organization.

SocietyOne’s online platform uses risk-based pricing to connect borrowers and investors to loans using its ClearMatch technology, which it launched at FinovateAsia 2012 (Finovate returns to Asia this year: Hong Kong on November 8). ClearMatch allows investors to bid together at different interest rates and amounts against a single loan.

In August, SocietyOne announced it had facilitated $38 million in personal loans in 2016. Since the company was founded in 2013, it has facilitated $150 million total. In April, SocietyOne announced it brought on a new CEO, Jason Yetton, and a new CFO, Anna Harper. The company has raised almost $55 million from 8 investors.

CrowdFlower Brings AI to Business Processes via Partnership with Microsoft


Best of Show winner CrowdFlower is leveraging Microsoft’s Cortana Intelligence Suite to bring new AI functionality to its human-in-the-loop platform for data scientists. With CrowdFlower AI, the company will apply artificial intelligence to a range of business processes including support ticket classification and sentiment analysis, accessing Microsoft’s technology via its Azure Machine Learning cloud service.

“With the Azure Machine Learning offering, the CrowdFlower platform now allows data science teams to train and deploy machine learning models with humans-in-the-loop,” CrowdFlower CEO Robin Bordoli said. “This is an exciting step toward making AI a business reality rather than a science project.” Writing at the CrowdFlower blog, Bordoli described CrowdFlower AI as the product of a “shared vision” between his team and the team from Microsoft Azure Machine Learning to bring machine learning to the enterprise that is a year in the making.


Bordoli, who took over the helm as CEO in February 2015, also emphasized that the combination of human and machine intelligence was a critical factor in what makes CrowdFlower’s solution unique. He added that it was also a better description of the likely future of AI compared to the way AI is portrayed in the media and even the way it is used by the “technology elite” like Apple, Facebook, Google, and Uber. “Machine learning without human-in-the-loop leads to bad outcomes,” Bordoli wrote, referencing the incident this summer when Facebook fully automated its Trending feature only to have its algorithms publish fake news stories. “AI is Machines augmenting Humans, not replacing Humans,” the CrowdFlower CEO explained. “Machine and human have complimentary strengths. AI is about the art and science of combining the strengths of Machine Learning and human intelligence.”

A data enrichment platform for data scientists, CrowdFlower specializes in managing data from an on-demand workforce of more than five million contributors. The company’s platform automates management tasks like data categorization, image annotation, and transcription that require human intelligence, and has been used, for example, to help automate data collection, learning and labeling from financial transaction data. CrowdFlower’s customers include Flickr, Bloomberg, and Home Depot.

Founded in 2009 and headquartered in San Francisco, California, CrowdFlower demonstrated its platform at FinovateFall 2014, earning a Best of Show award. The company has raised a total of $38 million in funding; its most recent investment was a $10 million Series D completed in June.

Finovate Alumni News

On Finovate.com

  • CrowdFlower Brings AI to Business Processes via Partnership with Microsoft.
  • Fintech Trending: Bots Break Out, AI Gets Personal, and Blockchain Buys the Farm.
  • SocietyOne Strikes Up Partnership with Beyond Bank, Reeling in $1.5 Million.

Around the web

  • Payoneer to facilitate cross-border payments for e-commerce marketplace, Rakuten, in new partnership.
  • eWise unveils its new financial transaction Categorization-as-a-Service (CaaS) API for FIs.
  • Let’s Talk Payments interviews Swych CEO Deepak Jain. See video of Swych’s Best of Show winning performance at FinovateFall.
  • Bank of America, Santander, and the Royal Bank of Canada to form global blockchain payments network with distributed ledger technology from Ripple.
  • Project Juno highlights Featurespace in its European Machine Intelligence Landscape
  • Larky partners with Credit Union Association of the Dakotas (CUAD).

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Fintech Trending: Bots Break Out, AI Gets Personal, and Blockchain Buys the Farm


Is it fair to judge a fintech conference based on the way it reflects, anticipates, and even uncovers what’s most important in the field? We think so – and we were once again impressed by the way FinovateFall this month helped spread the story of fintech in the second half of 2016.

After all, we read about new technologies every day. But once the wow factor subsides, there’s always the question: does it really work? Is anybody, any bank, any business in the real world actually putting this great looking, great sounding technology – these bots, this blockchain – to the test?

The good news is that the good news is true: new technologies like chatbots not only work, but were demonstrated live on stage by companies like Personetics (F16), Fiserv (F16), Kore (F16), and FinovateFall 2o16 Best of Show winner, Backbase (F16). We can even include companies like Clinc (F16) in this category of innovations that make it easier for people to communicate with technology. Clinc, which also won Best of Show honors at FinovateFall, developed and demonstrated an artificial intelligence-based natural language-using intelligent assistant that earned rave reviews from both attendees and the media.

  • “Backbase promises 60-second customer on-boarding with new solution” – Banking Technology
  • “Bots Are Everywhere, But Are They Ready for Banking?” – Bank Innovation

What about the blockchain, you ask? Earlier this year at FinovateSpring, our attendees awarded a Best of Show trophy to BanQu (F16), a company that uses blockchain technology to help refugee and displaced persons re-establish community ties through identification and financial inclusion. This month at FinovateFall, we met Full Profile (F16), an Australian company leveraging the blockchain to support real-time settlement, financing, and provenance tracking of agricultural commodities.

  • “Blockchain technology extends to agricultural contracts” – The Australian

But FinovateFall was about more than the most headline-grabbing technologies. As our Best of Show voting revealed, the appeal of technology to solve more everyday problems like buying a car – or a gift card – remains strong as well.

“You’ve Got A Car!” and a Digital Revolution in Regifting

This certainly seems to be what Finovate attendees had in mind when it came to Finovate newcomer and Best of Show winner AutoGravity (F16). The Irvine, California-based startup founded last fall, leverages the smartphone to make every aspect of the car buying experience easier – from initial selection of a vehicle all the way through the financing process. As with a growing number of fintech solutions, AutoGravity combines several innovations we’ve seen individually in fintech demonstrations over the years – document scanning, the integration of social media with credit application, geolocation – to produce a solution that seeks to disrupt traditional auto financing as we know it.

Swych (F16), the mobile gifting platform that also won Best of Show, is another example of technology making magic out of the otherwise mundane. The company facilitates the purchase, sending, redemption, and exchange of gift cards using digital technology that puts the smartphone at the center of the process. Based out of Plano, Texas, Swych’s technology brings the gift card industry into the 21st century, potentially helping breathe new life into what is typically thought of as the “gift of last resort.”

  • “Mobile tech for automobile lending, gift card redeeming snag top prize at Finovate” – Bizjournals
  • Brief: FinovateFall 2016 Best of Show – CrowdfundInsider

Security: Short and Sweet

It is no exaggeration to say that Trusona (F16) – a two-year old security specialist out of Scottsdale, Arizona – provided one of the most well-received demos of the year. And a large part of what made it so successful (and such a must-watch) was the way the demo itself embodied the dream of a simple security solution that works the same way every single time.

By quickly and effortlessly authenticating and logging in repeatedly in the course of six minutes, Trusona CEO and founder Ori Eisen did what every person who has ever racked their brain for their most recent password, or struggled to enter a captcha code on a mobile phone, wants out of a security solution: make it fast, make it easy, make it work the same way every single time. With plenty of competition in the security space from innovators on stage and off, it is no surprise that Trusona, with its #nopassword campaign and did-I-mention-it’s-free offering, stood out from the pack.

  • “Trusona Wins ‘Best of Show’ at FinovateFall 2016 – MarketWired

Everybody Loves a (Six-Time) Winner

And no discussion of FinovateFall would be complete without a tip o’ the hat to MX (F16). The company took home it’s sixth Best of Show trophy, impressing audiences with its PowerSwitch technology that allows an FI to quickly establish a new card of reference for consumers across a variety of platforms such as Netflix, Uber, Hulu, and Amazon.com. This gives financial institutions a powerful tool to when it comes to both attracting new customers as well as providing new options to existing customers. It also gives FIs potential access to what MX CEO Ryan Caldwell called “a mountain of interchange” – more than $200 billion in 2015 according to MX – that banks and credit unions can’t afford to miss.

  • “MX Achieves Innovation Milestone, Becomes First Company to Win Finovate Best of Show Six Times” – MX Blog

For more coverage on FinovateFall, check out our press round-up and our FinovateFall on Twitter post.

In other news

A hybrid debit/credit card

San Francisco-based startup Zero raised $2.5 million this week. While the investment sum is not particularly notable, what the company is doing certainly is.

Zero offers a Visa credit card that works in conjunction with a mobile app, but it’s not just another alt/neo/challenger bank. The differentiating factor is that Zero deducts money from the user’s account in real time just like a debit card, so there is no monthly bill. Unlike a debit card, however, transactions process on credit card rails so cardholders receive from 1% to 3% cash-back on purchases. It also touts no fees and pays higher interest (though they don’t yet specify how much) on deposits than traditional savings accounts.

The credit card is made out of solid metal and the app offers great looking PFM tools that forecast users’ balances into the future. Clearly, the startup has millennial users in its sights and claims to have the potential to increase a credit score, since there’s no way to default on payments.

The company makes money on merchant processing instead of charging users fees. It also saves money on advertising by using a pyramid-scheme referral approach (which worked on me… I shamelessly promoted them on Facebook yesterday).

With recent talk of credit cards falling out of favor with millennials because of their hesitancy toward debt, Zero offers an option that provides the best of both worlds– the cash back and credit-building opportunities that come with credit cards and the real-time transactional capability of debit cards.

Another just-launched startup doing something similar is New York-based Debitize. However, it does not issue a new credit card but instead aggregates customers’ existing credit card transactions and initiates a transfer from their checking account in real-time to cover the charges. Keep an eye on this space; we think we’ll see FIs picking up on this idea in the next couple of years (presuming regulators allow the practice).

New ACH regulation

The first phase of same day ACH transfer regulation lands on today. And while the final phase will not hit until March 2018, all bank and credit union accounts must now accept same day transfers.

To help banks move forward with the new rule, Dwolla (F11) launched a white-label API for same day ACH. The API, which is in a pilot program, currently supports credits only. Dwolla will roll it out with more partners in Q4 of this year.

The Clearing House, the organization behind the ACH modernization, has partnered with IBM’s (F16) Power8 to serve as the hosting program for Same day ACH. UK-based Vocalink (which was purchased by Mastercard in July) is set to deliver the platform, which will roll out to banks in the U.S. within the next year.

Friday Fun: Coffee and Banking (Redux)

Email from Starbucks announcing Lyft promo (23 Sep 2013)

Given how many times I’ve had coffee in the blog title, you might think I’m obsessed (or addicted). You might be right. Nevertheless, I love the combination of these two important parts of my life, so I’m going to keep on posting. But unlike my last coffee post dealing with the branch experience, today’s subject returns back to my comfort zone, the digital world.


Starbucks recently opened their rewards platform so that third parties could issue Starbucks stars as a reward. The first major brand leveraging this massive platform is ride-sharing service Lyft (promo landing page). In an email today, they offered 125 stars for the first ride (through Nov 9) plus 5 stars per “morning commute” on an ongoing basis.

Given, that 125 stars earns a free item at Starbucks, the Lyft program is essentially a free coffee for the first ride, then one free drink every 25 morning commutes (eg. about $0.20 value per ride). That’s probably a little stingy, but with rewards, even small numbers can be motivating. In addition, Starbucks is selling Lyft gift cards in its stores, offering an extra $5 Starbucks card for every $20 Lyft card back. That’s far more generous, but is likely a short-term promotion.

Bank opportunity:

With the Durbin-induced death of debit card rewards combined with ultra-low interest rates, it’s difficult to find rewards that are affordable and meaningful. But the Starbucks Star has potential, though you have to dole out rewards judiciously.

Let’s assume you can buy stars in bulk for 2 cents each (for major partners, I’m guessing it’s less than that, probably closer to a penny per star). You could incent deposits at 1 star per $10 annually with a balance cap of $5,000 or $10,000. For a $5,000 savings account, the account holder would receive 40 stars per month, enough for a free cup of coffee (or better, a sandwich).

Transaction accounts could provide 5 stars for every debit transaction, 10 for credit card charges, 5 for mobile deposits, 100 for paperless, and so on. That could easily add up to a free drink every month, a meaningful incentive. Perhaps even enough to get a bit of viral lift (aka word-of-mouth).

Yes, it adds costs, but free caffeine is one of the best retention devices on the planet. You already provide free coffee in the branch, why not extend the same courtesy to your digital customers?


Looking for more integrations? Don’t miss our upcoming techfest,
FinDEVr, in Santa Clara Oct 18-19.
The Starbucks is on us!





Inside Expensify’s New Concierge Bot


Online expense report processing company Expensify launched a new bot this week. Her name is Concierge (yes, they gave their bot a gender) and she is an “intelligent, virtual assistant” that combines Expensify’s data of billions of dollars of expenses with real-time pricing data of every flight, car, and hotel across the globe.

The automated intelligence bot uses machine learning to assist with new user onboarding, outstanding task notification, customer service, and other tasks and processes. In a blog post announcing Concierge, Expensify highlighted one feature in particular, Scheduled Submit.

After customers use SmartScan to upload their receipts into Expensify, Concierge reads and categorizes their receipts, then adds it to the user’s expense report. The bot even knows if transactions fall within company policy, and if they do, it sends the expense report to the user’s manager on their behalf. When combined with Expensify’s next-day reimbursement, users can have the funds back in their bank account the day after incurring the expense.

As Expensify explains, “it’s not worth anybody’s time to manually transcribe, submit, review, and approve a ton of tiny receipts, and Concierge is there to take all that drudgery off your team’s plate.”

Founded in 2008, Expensify demoed Expensify Invoices at FinovateSpring 2013. Next month, on October 18 & 19, the company will present at FinDEVr Silicon Valley in Santa Clara. Discounted tickets for the event are still available through tonight. Register today to save.

See What You Missed at FinovateFall: Demo Videos Now Available

29175062613_79b8fac89a_kAbove: MX jumps for joy to celebrate the company’s Best of Show win.

I should start this post by admitting that I missed FinovateFall this year. My wedding was the weekend after the show and there was no way I could swing both. While I think I chose wisely, I certainly felt FinovateFall FOMO after reading Twitter highlights and press coverage.

If you’re like me and missed out, there is hope. All of the 70 demos from FinovateFall are now available for free in our video archives and event photos are posted on Flickr. Also, there’s still time to catch more fintech this fall at our developer’s conference, FinDEVr (October 18 & 19) and our first event in Hong Kong, FinovateAsia (November 8).

The best place to start is by watching the six demos that won Best of Show:







Thanks again to all the presenting companies who braved the Finovate stage and to all who attended. We’ll see you next year!

NCR Unveils Business Banking Mobile App


If you are a community bank or credit union, then there’s a lot to like in the launch of Business Banking Mobile from NCR. The app brings the SaaS banking services platform to the mobile channel, giving small-and-medium FIs the ability to offer their business customers a range of services via iOS and Android devices. The solution features the user experience of Digital Insight’s Mobile Banking Apps, ensuring a familiar, retail feel, and includes TouchID and EyePrint ID biometric authentication options.

Speaking for Harborstone Credit Union (Tacoma, Washington), where the technology is in beta testing, VP of Marketing and Digital Experience Ken Bloomfield called the app “in direct alignment” with Harborstone’s commitment to providing an omni-channel experience for its business customers. Jim Huff, SVP of Marketing whose El Paso, Texas-based FirstLight FCU is piloting the new mobile app, highlighted the features that will be available to its businesses, including fund transfer, wire transfer approval, and account notifications. He added that the combination of NCR and Digital Insight helped “ensure that the product continues to evolve as financial technology evolves.”


Pictured (left to right): Shuki Licht (Sr. Enterprise Architect) and Kimberly Preto (Director, Business Development & Alliances, Digital Insight) demonstrating Transaction Data Manager at FinovateSpring 2016.

Headquartered in Georgia, NCR demoed its Transaction Data Manager at FinovateSpring 2016. A specialist in consumer transaction technology, NCR facilitates more than 550 million transactions a day in verticals ranging from financial services and small business to travel and telecom. Earlier this month, the company announced its partnership with six-time Finovate Best of Show winner MX with the launch a new data-driven money management platform, NCR Money Management. MX CEO Ryan Caldwell suggested that the collaboration, which began in the spring of 2016, was the start of an enduring partnership between the two companies. “We look forward to innovating together for many years to come,” he said.

NCR also announced a handful of development initiatives over the summer, launching a joint research effort into ATM and retail banking technology with Wells Fargo and opening a new innovation lab at its new global headquarters in Atlanta. Bill Nuti is president, CEO, and chairman.