Winning in Fintech & Insurtech Ecosystem — Big Win for Technology Innovators & Crunch-time for “Reach Focused” Players

Fintech — Insurtech Ecosystem from user perspective (Updated May 2017)

As promised I deliver an update to my post from last year on Fintech & Insurtech Ecosystem (post can be found here).

A year after I made my assumptions it looks like the world is turning into the predicted direction. Storage players with its platforms are winning the market from niche players big time. Microsoft with Office 365 (including OneDrive, Teams, Outlook) has taken over the productivity market only challenged by Google (with Gmail/Apps, Chromebooks and winning the education space). Sorry to say Apple and others: You are out. (Box is still around for good reasons while Dropbox is on the way to drop out). With Microsoft entering the Chromebook space and Windows S the main leaders are going head on head to dived the market while the rest is watching the show.

Despite everybody predicting the end of the old economy players in banking and insurance — those old guys are resisting and fighting back. As predicted it took time to sort out and revamp in-house development and shifting to agile structures in a legacy environment those companies are coming back. Deutsche Bank with its Digital Factory is leading the pack and gets the attention of the U.S. based VCs like A16Z to present their portfolio companies, hoping they will get an inroad to the European market and its challenges of regulations and currencies. Thanks to Brexit the continent will experience a mayor shift in personnel, geographies and market dynamics. All to the bad of London based fintecs and insuretech startups and benefit of Paris, Dublin, Frankfurt and Amsterdam. (Thanks to #Leave campaign).

Technology Innovators are outpacing the reach junkies among the startups in fintech and insuretech. Mobile banking and mobile payment is a very competitive space and we saw the first drop outs. More there to see in the near future. A concentration has already started and a decline in user signups has been seen in insuretech B2C focused companies. While copycat scenarios are known from certain startups in the past — today the incumbents are entering the markets with copies of startup models everywhere. With existing customer reach and analytics of success rates of new technologies and models, the investments and roll out of new features as part of their existing products and offerings is challenging cheap. The environment is the hardest for new beginners since a very long time. Check24 is the latest to entering the markets with pure copies of successful startup ideas. As predicted the acquisition of those startups would take longer and will cost much more than just creating and rolling out the services back on their existing platforms. We are still at the beginning of those incumbents getting into the markets by their own.

The call for rescue is to be heard in financial markets especially in fintechs focusing on lending products. While the risk profile of certain customers groups is still to high for incumbents to serve them those banks and insurance players are happy to support startups in those areas. Risks are still on the side of new players while the old financial economy revenues are reside on the banks these days.

So what’s the most promising playing field for Startups?

In a world where Voice Assistants like Echo, Google Assistant and Siri are becoming the default front end to consumers and AI is the default middelware of platforms innovative b2b technologies are the place to be those days. While user acquisition becomes more and more expensive and back-end services are still the foundation, the increased usability is key driver for platform owners. Enriching their functionality is a profitable place for new beginners.

The future of b2b is in SMB and medium sized companies. While enterprises will focus on one-stop-shopping at a platform provider. They expect Microsoft, Google, Amazon, Salesforce, facebook and others to deliver to their needs. Integrating various verticals for their needs will become more and more an obstacle in an overall cost evaluation based on SaaS and cloud optimized approaches. Keeping several clouds synced is expensive and hard to manage in an efficient way. Rather stick with the features of your cloud provider.

The biggest opportunity is in industries, where no dominant cloud platform provider is to be found. Small companies is one of those market opportunities. A provider like enfore will enable those 200mn small business to be seen as one platform and serve this markets as an integrated SaaS provider. Connecting the dots between storage and financial transactions transparent to the b2b customers at a very attractive price point will offer one of the biggest opportunity in the current markets.

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