JAX FINANCE BLOG

JAX Finance, 3-6 April 2017
The Conference for Technology in Finance
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Tech Giants and InsurTech: The squeeze of classic insurance

The squeeze of classic Insurance

Tech Giants and InsurTech. Source Shutterstock

Tech giants have quite a lot of aces up their sleeve, including access to their customers’ mobile phones. FinTech Influencer Spiros Margaris predicts that they are going to take the insurance industry by storm —
incumbents are already feeling the pressure.

JAX Finance: What got you interested in FinTech?

Spiros Margaris:

I love the fact that FinTech has such a huge and increasing impact on everyone’s lives. Through innovation and technology, a lot of smart and great people can change and influence the financial industry for the better. It is an incredibly exciting time and space to be in FinTech.

Always remember, no matter what the financial markets do, you must know the FinTech industry is here to stay for as long as we use some form of computer.

 

JAX Finance: Do you think the phrase “evolve or die” describes banks’ situation right now?

Margaris:

Evolve or die” absolutely describes the banking industry situation. The faster we understand that there is no status quo but only up or down phases in our lives or businesses, the faster we will likely evolve for the better if we try.

I believe, for the incumbents, it must feel like being between a rock (FinTech) and a hard place (tech giants).

JAX Finance: Does FinTech still deserve the label “disruptive” or has it outshined this tag?

Margaris:

Good FinTech start-ups should be disruptive if they want to succeed because why else would someone become a customer if the start-ups don’t offer something better than what’s out there by incumbents or other start-ups. So, to answer your question, great FinTech companies never stop trying to be disruptive and providing value to customers.

 

JAX Finance: What are the biggest (and most important) trends in FinTech right now?

Margaris:

As people who follow my tweets and comments probably know, I am a big believer in the InsurTech (insurance technology) space because I am convinced it is an industry in which we will see big disruptive changes happening. The insurance industry future will look very different from what we know now or even from how most insurance people assume it will look in the future.

The insurance future will be crowded with incumbents, InsurTech players and tech giants (not necessarily the tech giants we know now). However, the tech giants will increasingly take over the insurance industry because they are much closer to the clients, especially the next generation of customers from Millennials to Generation Z (post-Millennials) to future generations. Whoever controls the gatekeeper, now the smartphones, will have the first access point to customer needs and therefore will be the first to offer whatever they need. In my view, the tech giants have a compelling business case, which is very hard for the traditional incumbents from banking to insurance to replicate. Now, you know the dilemma the incumbents are in. I believe, for the incumbents, it must feel like being between a rock (FinTech) and a hard place (tech giants).

 

No. 3 FinTech Influencer Spiros Margaris
No. 3 FinTech Influencer Spiros Margaris

 

JAX Finance: Do you think the investment potential will attract entrepreneurs to FinTech?

Margaris:

The smart money will invest in FinTech no matter what the market sentiment is because FinTech is here to stay. So, it is better not to try to time the market but to invest in good people and FinTech businesses. Valuations will fluctuate, but sound investment should always provide for good returns if investors apply sound judgement. Just try not to be greedy because greed is a bad source for wise investment decisions.

 

JAX Finance: How important is blockchain in this equation? Can FinTech help it go mainstream?

Margaris:

Eventually, we will see blockchain use cases that people and firms will love to use and then it will likely go mainstream. However, in my view, the blockchain silver bullet that works wonders for the many industries people say it will work in does not exist, but the huge potential of the technology is obviously there. So, to answer your question, yes, the FinTech industry does provide a constant blockchain interest, and in that respect, it helps the blockchain industry to stay in the minds of people and investors.

I believe it will be similar to when we look for an address and can’t find it and then ask someone for help. Often, when we receive the address information from the person in the street, we are very, very close to it. In other words, when we feel like giving up on blockchain, we will probably be very close to a mainstream breakthrough.

In my opinion, the future of finance will be like nothing we know now and nothing like we imagine it—even in our wildest dreams.

JAX Finance: What does innovation mean to you?

Margaris:

My definition of innovation is an idea that provides something new or improved but only in combination with the most important element, which is that it must also provide a real added value to the customer.

 

JAX Finance: What does the future of finance look like?

Margaris:

In my opinion, the future of finance will be like nothing we know now and nothing like we imagine it—even in our wildest dreams.

Isn’t it unbelievably exciting to be a very small part of that unpredictable change that happens in the financial industry and the huge impact it will have on our lives? It is for me and for many people I respect in the FinTech industry.

It is not about money but about trying to make a difference, in our case in the financial industry, with wonderful FinTech ideas, solutions, and people.

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