Fintech Trends in 2019

This week, we published our Fintech Trends to Watch in 2019 report.

The report analyzes fintech investment data from 2018 and walks through 10 of the key themes we’re paying attention to this year.

One key data point that the report highlights is that North America is no longer powering global fintech funding growth as we progress into 2019.

One market we are paying more attention to is Southeast Asia and, in particular, Indonesia. Today, Indonesia features one of the most compelling macro backdrops for investment globally, with a young, optimistic, and upwardly mobile population of 264M. Consider that:

• Half of Indonesia’s population is under the age of 30, with the number of millennials (aged 17-35) in Indonesia currently at 79.5M.
• Among major Asian economies, people in Indonesia feel the most optimistic about their opportunity to advance in their careers, develop new skills, and build their finances, according to a LinkedIn study.
• By 2050, Indonesia is projected to have the third-largest middle class among emerging markets.

Meanwhile, insurance literacy in Indonesia actually fell from 17.9% in 2013 to 15.8% in 2017. As such, regulators are encouraging the use of digital channels in insurance and have publicly voiced that “currently there are no regulations needed to regulate insurance marketing through digital means.”

We put together a detailed report on the current insurance landscape in Indonesia and five themes to watch when it comes to the future of insurance innovation in the region. Read it here.

Warning shot

There’s been some differing takes regarding the new Circular Letter No. 1 that the New York Department of Financial Services sent to life insurers on the topic of external data sources and algorithmic underwriting.

The National Law Review, for example, writes:

While Letter No. 1 acknowledges that the use of technology can “improve access to financial services” and “benefit insurers and consumers alike by simplifying and expediting life insurance sales and underwriting processes,” imposing the blizzard of burdens on insurers will weigh down the development of the very processes that can yield these benefits.

The Wall Street Journal, meanwhile, focused its attention on the use of social media, though only one insurer out of the 160 that the NY DFS queried said it was using social media, retail purchases or internet activities in life underwriting.

Recently, more headway has been made in incorporating medical records. In November, MIB Group signed an agreement with Epic to utilize its electronic health records system. Under the agreement, MIB’s 400 US life insurance members will be able to access electronic health record (EHR) data via Epic’s Chart Gateway for life insurance underwriting.

Per MIB EVP Stacy Gill, “Some accelerated methodologies, rely on non-medical data that are, in effect, efforts to try and approximate what a medical underwriting result would look like for life insurance.”

What are your thoughts on the letter? Let us know and we’ll publish a few responses in our next newsletter.

Have a great weekend,

Matt

@mlcwong