Life insurance #insurtech innovation Part I: No longer an oxymoron, expect an uphill climb


Photo Credit

This is a guest post by Amy Radin. It is a two-parter. The second part is tomorrow. We have also posted it onto the Fintech Genome to stimulate discussion there. You can find Amy’s profile on the Fintech Genome here.

While most insurance technology startup activity in the US is concentrated in health and auto, there are signs of life (pun intended) in the life insurance sector. Given the business model challenges reported in my April post, optimists will see upside and big commercial white space throughout the ecosystem.  People with the skills, smarts and guts to envision how life insurance could work can lead the sector in new directions.

Life insurers ignore the facts at their peril. According to the 2014 Insurance Barometer survey cited in AM Best – Buying Insurance: Evolving Distribution Channels, 83 percent of consumers would use the Internet to research life insurance before purchasing a policy if they had the option. While face-to-face contact with an agent remains the preferred purchase channel, nearly one in four said that given the option they would prefer to research and purchase online.  This year’s Insurance Barometer update reports an improving marketplace for life insurance, citing favorable millennial generation attitudes, and people’s willingness to share data in exchange for better product pricing.

A check-in on what is happening suggests three groups of potential innovation generators emerging:

  • New entrants developing client-centric offerings sitting between the carrier and the client, displacing traditional agents with a digital experience business model
  • Startups providing B2B solutions to carriers or distributors, addressing pain points in the traditional product and sales model
  • Carriers themselves, a number of whom are experimenting either in the market themselves, or via investments in startups and/or accelerators

This post assesses these the three sources of innovation. Tomorrow’s post will highlight players across these categories.

New entrants can change the game … and that will take time

A big beef with the traditional life insurance model is that it is not client-centric.  Nonetheless, even the most change-resistant executives will at least nominally agree that a focus on the client is now essential.

From that consensus, though, all bets are off with regard to incumbents’ ability to transform from a model where many of the industry’s own employees believe that the agent is the client, to one where the client (i.e., the person purchasing the insurance product) and his or her needs drive the business strategy.

It is almost impossible for a time-tested, embedded culture to accomplish a 180-degree pivot, so I am more optimistic that successful models of client-centricity will more likely come from outside.

New entrants who succeed will:

  • Establish presence and meaning for their brands among client segments whose unmet needs can be supported by the business model, creating differentiation and marketplace advantage.
  • Extract insight from wide sources of data, many not used at all today within the industry, to drive product development, client segmentation, personalized offers and communications, a client journey built upon new models for distribution, servicing, payments and account management, or a pivot from protection to prevention  – all with heavy focus on digital possibilities
  • Avoid naivete about the inherent complexity of this industry, starting with:
    • Managing the reality of 50 states’-worth of regulation plus federal oversight from multiple agencies
    • Adhering to tight compliance requirements
    • Assessing the financial and risk implications of claims that won’t occur for decades
    • Recognizing that people are irrational to some degree when making financial decisions
    • Having patience (and patient investors) as even new entrants will be impacted by sector dependencies and client dynamics that may take years to evolve

Start up companies will provide B2B carrier and distributor solutions, aiming at resolving automation, speed, productivity, technology, compliance and client experience pain points.

When I began to take a close-up look at the insurance industry four years ago, it was exciting to see the low-hanging fruit that could have positive impact with limited downside.  Carriers lacked digital and multi-channel capabilities, big data analytics, and technologies that had been introduced in consumer financial services at least a decade prior.

There are signs of progress. Entrepreneurs are honing in on specific problems, and executives are more open to outsiders. Consider as a starting point three buckets that are filled with pain: Agent, Client, and broader Capabilities.

  • The traditional agent model is riddled with issues, e.g.: 
    • A continuous decline in the agent workforce,
    • A mismatch between agent demographics and overall population trends,
    • A prospecting model out-of-touch with the times, and
    • A compensation model that encourages churn and does not align interests between the agent and either the carrier or the client

Emerging agent solutions can successfully focus on reducing sales funnel inefficiencies especially in the areas of:

  • automation solutions to ramp up agent engagement in digital channels (website and mobile app development, social media, compliance, content development, marketing campaign management),
  • hand-held device-based data capture and submission for policy applications; and
  • improved underwriting and application processing for faster approval, reducing error rates, and minimizing or eliminating the need for applicants to provide blood and urine specimens.

Startups offering B2B solutions will succeed by:

  • Demonstrating real knowledge and expertise in the vertical
  • Connecting the dots between their solution and drivers of financial success, especially the core metrics against which the industry and the analysts have historically measured performance.
  • Having a constructive attitude – no one wants to hear that the sky is falling, especially executives and advisors within striking distance of their own retirement.

Carriers are innovating to connect directly to the people who own their products, and also to motivate agents to sell 

The goal of client-centricity is on top of the list for US life insurers. The challenge is translating what starts off as an intellectual abstraction into resource allocation, structure, governance, talent, prioritization, investment and daily tactical delivery… not to mention demonstrable financial impact that will satisfy boards and investors.

The pressure is on. Carriers are choosing a variety of areas for focus, and stepping beyond expense reduction to shore up results.  Commonly on the short list:

  • Advisors – whether captives or third party – have the direct relationship with the client, and tend to maintain connectivity only with their top clients who represent additional sales or referral potential.
  • Client relationship management – Carriers transact infrequently with clients or their beneficiaries – contacts focus on premium notifications, claims, and questions about policies.
    • Even when clients or beneficiaries reach out, most carriers are in the early days of figuring out responses beyond answering the immediate question.
    • Across the industry there are millions of clients referred to as “orphans” – people whose agent has died, retired, or is no longer affiliated with the carrier.  Even if “assigned” to another agent, these clients do not have strong relationships with whoever issued their policy.
    • Carriers have not done a good job understanding their clients and how to improve the effectiveness of these relationships based on behavioral segmentation or other proven tactics. In the language of the carriers, “in-force management” is a relatively new area of focus, driven initially by risk and expense reduction strategies, with some signs of effort to impact client loyalty and satisfaction.
  • Capabilities – Ranging from basic automation to big data to digital and multi-channel experience platforms, e.g.:
    • data management platforms that unify disparate data sources making them useful in one, dynamic dataset, speeding up execution as well
    • data analytics, e.g., to enable proactive and relevant product migration as well as additional sales. product development, and exploration of new business models
    • integrated experience for agents and clients across channels
    • data security enhancements
    • e-document management

The business model and culture that enable results to happen, along with the distractions of running a business of such high complexity, will compete with carrier-led efforts.  Without restating the obvious challenges, two worth noting are:

  • The dependency on agents and advisors to drive sales, which makes any direct-to-client conversation controversial, as it may be perceived as competitive with the sales force

A 2015 World Economic Forum research study entitled The Future of Financial Services concluded that while, “the most imminent effects of disruption will be felt in the banking sector … the greatest impact of disruption is likely to be felt in the insurance sector.” For entrepreneurs and investors who see the upside and can tackle the complexity, life insurance is territory that appears, at least for now, to have considerable reinvention white space.

Daily Fintech Advisers provides market development services to Fintech ScaleUps, Financial Institutions and Investors and operates the Fintech Genome P2P Knowledge Network.

Three’s a crowd – 3 fintech IPOs to hit ASX in coming weeks


It’s fintech IPO season down under, with three companies planning to list on the Australian Stock Exchange (ASX) in the next few weeks; ChimpChange, Kyckr and Coassets. The last two plan on leveraging the services of another Australian fintech startup, OnMarket BookBuilds, to attract investors. OnMarket BookBuilds claim to be the world’s first free-access portal into capital raising’s.

It’s a contentious time here in Australia for IPOs in general, with the ASX recently proposing plans to cut back the number of shareholders who are required to participate in a listing, from 300-400 to just 100 for large IPOs. Many, like OnMarket, see this as a direct threat to small investors and are petitioning the ASX to scrap the changes. If the proposal is successful, it certainly doesn’t bode well for other fintech IPO’s coming through the pipeline over the next few years.

But, while there’s still a chance for every day stock market punters to turn a dollar before the big institutions do, here’s the low down on one upcoming IPOs, automated KYC startup Kyckr, due to list on the 8th of July.

About Kyckr

Kyckr Limited is a new entity that has been incorporated in Australia in order to acquire existing compliance business Global Business Register Limited (GBR).  Today GBR connects into 150 business registers globally across 88 countries, automating KYC checks for banks, non-banks and domain and SSL providers. Depending on the region, its connections into registers are made via an API, a live data scrape or are conducted manually by customer service agents. Fintech clients on its books include Stripe and PayPayl, with big tech and financial players like Dell, Bank of Ireland, American Express and Swift also listed.

The business has indicated money raised will go towards further global expansion and towards building a compliance platform on the blockchain. In this regard they aim to be one of the first ASX-listed companies to do so. Kyckr competitors today include, Avox, Clarient and SmartStream, to name a few.

Revenue model

Kyckr splits the current GBR revenue generation into two models:

  • People model – one time revenue, with a charge per report issued.
  • Automation model – recurring revenue for ongoing monitoring.

53 percent of 1H FY16 revenue was attributed to its automated model, with the company looking to transition most of its client book to recurring, clearly a far more attractive proposition to investors.

Competitive advantage

Kyckr claim a key differentiator (among many) is in the fact their GBR platform accesses data in real-time, rather than extracting and storing data in their own repository.


A Tower 81 research report has highlighted a possible lack of adaptability of existing APIs if and when rules around AML/CTF and KYC laws change, which could lead to issues with existing client integrations. Other risks flagged by the company in its own prospectus are its inability to register key intellectual property rights in Australia and technology that is not protected by any registered patents in any jurisdictions. There’s no question the regtech space is heating up – see last weeks regtech wrap for our Daily Fintech coverage – so copycats aren’t out of the question.

Listing Details

Kyckr will be listed on the ASX under the ticker KYK on the 8th of July 2016. The company is looking to raise between $5 and $6 million, with 30,000,000 shares on offer at a offer price of $0.20 per share.


As someone who heads up a business fintech banking line that is directly impacted by on boarding constraints around KYC, anything real time and API driven will always be a bonus. How plug and play the APIs are is a question mark, as each financial institution has its own compliance models and risk tolerance profile. Could smart challenger banks who are already API driven simply build their own connections to registers, negating the need for a Kyckr? On a local scale maybe, but on a global scale, this would be hard and where the GBR platform could be leveraged. At some point, compliance starts to bite for fintech startups, and if Kyckr can find the right price point to compete against the large incumbents, they might just carve out a nice little niche for themselves in the space.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

Help us decode the Fintech Genome

Genome A

Daily Fintech is 2 years old today. For the record, here is the first post on June 29th, 2014. It is worth a read and, as it had only a handful of page views, it is quite possible that you missed it 🙂 Here is our Happy Birthday Post on June 30th, 2015 (it is more about how to create high quality content in the digital age than about Fintech).

Today we are launching a peer to peer knowledge network that we call the Fintech Genome (using “genome” from genetics and DNA simply to connote the complexity and importance of Fintech). We need mass collaboration to decode the Fintech Genome. That is why, on our second anniversary, we are asking for your help to decode the Fintech Genome.

Anybody who is a parent will know that you start by celebrating days, then weeks, months, years, decades and that you celebrate all achievements no matter how small, but even this proud parent does not want to record how many eager readers we had on June 29th, 2014.

For our second anniversary we have something to celebrate – our baby can crawl! Yes we have a committed and influential group of subscribers. As of today, that number is over 10,000 (you can see the number on the right side of the front page where it asks you if you want to subscribe) and has been growing rapidly month to month. We are happy to report that we have used no marketing gimmicks to grow that subscriber base. We believe that organic growth is the only sustainable growth.In this way, we are very old fashioned – evan a bit purist. We reckon your time is precious and that as long as we keep delivering value, you will keep coming back.

But we discovered a problem on the Internet. 

The problem is how to have good conversations online. Comments are broken. So the conversation moved to Twitter, LinkedIn and Facebook. That fracturing is a pain because we don’t know where the conversation is taking place. We have to jump between comments here on the blog to LinkedIn, Facebook and Twitter because the conversation is happening in all those places. If somebody says something insightful and contextually relevant on Twitter, you won’t see this if you are commenting on Facebook.

Some entrepreneurs have tried fixing the comments problem, most notably Disqus. However Disqus feels too much like a Social Graph. Daily Fintech is more about the Interest Graph. Our readers are not interested in each other’s comments across all subjects in a chronological river.  We want to be informed by subject, in context,  by our peers. We want answers that will make us more effective at work, the digitisation of financial services.

That is why we are launching the Fintech Genome today.  It is a 24/7 digital party where you can have some great conversations about Fintech. We call it the Fintech Genome because the digitization and democratization of financial services is such a complex subject that matters to all of us (like the structure of human DNA). After two years writing every single day at Daily Fintech, the need for a place where everybody in the community had a voice and where we could all have a great conversation became apparent and pressing.  

Fintech Genome is where you can learn from each other and make connections. 

Anybody who has studied how college education works finds something interesting (and rather annoying to professors). We learn more from our peers than from our teachers. So we want the Fintech community to have that benefit. That is the 24/7 digital party that you are invited to. This is a party where you can stay as long as you like. You can come and go as you please. Hopefully each time you come, you will find some interesting conversations that make you more effective in your work and some people that you want to get to know.

The digital conversation problem

We have been studying the digital conversation problem for some time. It is an area where there has been remarkably little progress despite the massive growth of the Internet. If you go to forums and Q&A sites in 2016, you find yourself in a weird time machine, transported to a late 1990s era (an era that is now taught as history to people who were too young to experience it). Some sites, catering to a more technical and early adopter community have made great progress – think of Stack Overflow, Reddit and Hacker News. What all of them have done right is to use peer ratings to “float the good stuff to the top”. So, we have incorporated community ratings. The community will rate how knowledgeable you are on a specific subject based on what you write about on that subject. You benefit from writing insightful and useful stuff by getting the respect and attention of your peers (which may lead to profitable business). If you just want to consume content, that is perfectly OK, we understand that most people want to read and only a few people write; you use the Genome in whatever way suits you best. However, to gain the trust of your peers in the community that will allow you to go from simply reading, to opening a new topic, and later to editing a wiki topic, you need to engage on the Fintech Genome platform.

If blog comments are broken, why not simply use social media sites?

The people running Facebook, LinkedIn and Twitter clearly want us to do this. We will be using Facebook, LinkedIn and Twitter to amplify the conversations and bring more people into the conversations. However we don’t want those conversations fractured across multiple sites. It would like having a great conversation in one party and then running out to a different party across town because the conversation on the same subject has moved to that party – pub crawls are fun if you are walking with your friends, but frantic rushing between venues is just a time suck. We want to bring all the conversations about Fintech into the Fintech Genome. 

The Fintech Genome also fixes a problem we have been facing that has been created by our success. As Daily Fintech started to grow in reach and influence we were being inundated with requests to take guest posts or write about specific ventures or do more interviews or write about a specific news event. This was a conflict because we have a very firm signal to noise ratio policy. We only do one post per day. It is fun to remember the days of wondering if there would be enough material to fill a daily schedule! Today we could easily have 2 or 3 posts per day. The community is offering us the content and there is plenty enough happening that is interesting to write about. However, sipping from a firehose is neither fun or useful. We respect your time, so we don’t want to inundate you with information. Daily Fintech is highly curated. Our experts are hand-picked and work on a specific schedule on specific subjects. We can also see a large number of experts who have a huge amount to offer who do not want the constraints that Daily Fintech experts accept.

We created the Fintech Genome for busy people who have a lot of knowledge and insight to offer, but not the time to write full articles/research notes on a regular basis who want to contribute in little time snippets by:

  • offering an insight/opinion on an existing topic
  • answering a question by contributing to an existing topic
  • asking a question that starts a new topic
  • editing a wiki to contribute new data or augment or correct an existing data point.

The Daily Fintech experts play an important role in the Fintech Genome as peers, but we will not be curating or rating the content. The Fintech Genome is an open, permissionless network where any registered user can create and rate content from their peers. 

Our role is three-fold.

  • First we intervene where needed to ensure a civil conversation. Spammy and hateful stuff will usually get down voted and ignored, but the ingenuity of promotional spammers, scammers and haters is unlimited. So we may occasionally have to intervene to ensure good behaviour.
  • Second, more positively, we create the content structure. This is needed because Fintech is such a broad subject (and we take a broad interpretation of Fintech as outlined in this post). Fintech includes technologies such as Blockchain and AI. Fintech also encompasses range of business models and is changing the landscape of the financial industry directly and all business indirectly (as Finance is so important to business).  Fintech also encompasses societal and demographic change, as well as economic development and economic empowerment. These are all good conversations. Our job in structuring the content is to help you find the right rooms where these conversations are taking place. We will show you linkages. For example, you may decide to go in the room where the Blockchain conversation is happening and then hear how it is being used for real time clearing in capital markets and so you decide to go to the room where the real time clearing in capital markets conversation is happening. Some other folks from the Blockchain room may join you in the other room. What we are doing by creating the content structure is simply putting a sign on the doors to each room so you can easily see which room to enter. For now, we start with only three categories – WealthTech, InsurTech and General FinTech.
  • Third we invite people from the Fintech Community to make contributions. 

Click here to join conversations happening right now (email us at if you need help).


Daily Fintech readers are 31% from  USA, 11% from UK, no other country is bigger than 4%


People often ask where our readers are based. We have been writing about Fintech every day for nearly 2 years (our anniversary is tomorrow) and our community is growing strongly (subscriptions have been growing over 10% month to month and are now over 10,600). So the sample size is starting to be meaningful. This snapshot is for May 2016, but analysis for other periods show a similar pattern. We did not seek readers in any specific location. We just write and our readers find us. People sometimes assume that because the Daily Fintech team is based in Switzerland, our readers are mostly in Switzerland; but much as we admire the emerging Fintech scene in Switzerland, the stats show that Switzerland is # 6 in traffic and accounts for about 4% of the total.

If London is the Fintech capital of the world, the Daily Fintech stats don’t bear that out. The UK is # 2 in traffic and accounts for 11% of the total. Yes, USA is nearly 3x that in the # 1 slot with 31%. We will report back at end of the summer to see how much impact Brexit has had on this.

The long tail has over 130 countries and accounts for 30% of the total.

The ratios between USA and UK remain pretty consistent on any period we look at. The ranking within the top 10 does vary a bit based on what we covered in that time period. For example, if we write a lot about ventures and trends in India we will see a lot of India readers in that time period. With that proviso here are the stats for the top 10 countries:

United States


United Kingdom


















TOP 10






This clearly skews English speaking. When we can crack auto translation or get people to write in Chinese, German, French and Spanish this will change (although note Switzerland and France, neither of which are English-speaking countries).

Daily Fintech Advisers provide strategic consulting to organizations with business and investment interests in Fintech. Bernard Lunn is a Fintech thought-leader

From P2P to Matchmaking; the Fintech recruitment scene


If you beleive that people are a growth accelerator, like Macquarie bank does and Janos Barberis describes in his fresh off the press piece on post Brexit consequences on human capital, then pay attention to those involved in Fintech.

Fintech recruitment space is not a boring business by any means. It is demanding, it is evolving, and it is also being disrupted. is the early mover (2009) who took the business online and brought a strong media aspect to it. The platform approach has been adopted from Fintech Recruiters, a 2yr old online global recruitment agency. The disruption is deepening however, in other marketplaces. Angel List is one example, of an equity crowd funding Fintech that has added a strong recruitment component to their services; coined Apply for a job & Recruit talent. Another example, of a startup with an early stage Fintech focus is F6S, which offers services for startups mainly focused on match making with accelerators, funds or investors. Matching talent is one of their services coined “Find a Job”.

The Fintech recruiting landscape is trying to decide whether they are in the headhunting business or the matchmaking business. Matchmaking obviously fits more with the Peer-to-Peer innovation. But the reality currently is that the matching process is far from being handed over to a sophisticated classification algorithm. The stakeholders involved in financial services range from established financial service providers, Fintech startups, tech companies getting involved in Finance, consultancies, trade organizations and payment providers.

From the navy to joining the pirates – Wall Street towards Fintechs

Banks are continuing to consider joining the Fintech party mainly, by launching incubators. The established consultancies traditionally into financial services, are more aggressive in their approach of getting involved in the disruptive technologies. The market lead taken by EY is being more closely followed by others (Deloitte, Mckinsey etc).

I spoke to Nicole Curtin, an established recruitment agency with an IT focus by tradition, who shared their experience of the European market. They confirmed to me that

the urge to leave the large financial institutions and join the startups is there.

There are two major clusters:

  • People with technical expertise, like risk analytics, or IT know-how; that genuinely want to join a Fintech vision and be part of it.
  • People from the business side that see a business problem and ache to solve it in a more entrepreneurial way or taking the investing approach. Anshu Jain, the former head of German financial giant Deutsche Bank, joined SofiHuy Nguyen Trieu, who just last week left Citi to start his own Fintech.
  • Experienced people from the incumbents that see no more upside to the business, simply because of reduced risk appetite and broad regulatory restrictions.

In Europe, the German market is experiencing a great boom in the entire tech startup sector and there is

an across the board shortage of talent in Germany.

The recent Fintech Frankfurt boom is adding to this staffing shortage. However, as the German “market” is realizing this, they are shifting to operating more in English and opening up to importing talent.

Switzerland, a much smaller and more conservative market, is experiencing also its own version of staff shortage. The reason is that

the Swiss market need, is for a mixed skillset: technical skills combined with functional (preferably risk and regulatory expertise).

This has largely come about due to high cost of labor that is forcing startups to look for staff that is multi-skilled in the way described above.

London also is in shortage for different reasons. Mainly the tech scene has grown too fast and more than 50% of vacancies, is the market status right now. The

core of the shortage in London is in the area of “Digital” skills and experience for Fintechs that are all on the Digitization bandwagon.

The tech demand is in the areas of computer science and data analytics and digital marketing people.

As per Nicole Curtin, banks are also looking to lure Fintech talent in house. The problem is the graduates these days, fresh out of universities, include startups in their target list, whereas they used to be ONLY looking to join banks and get their wardrobe full of suits. They now want the Banana republic look (despite Jamie Dimon’s V shaped T-shirt style) and the opportunity to see the whole business and of course the upside and the joy of building something.

I see that the boom in Fintech has not allowed for the human resources dimension to adjust and adapt. Bankers coming up to speed, techies realizing the complexity of the financial business, and the market forces of digitization altering the rules as we speak. Mismatches, vacancies, and shortage of talent; is the state of affairs.

In Asia, the Fintech scene is in early explosion stage. There the need isn’t for IT talent. Fintechs are looking for bankers skilled at hiring client relationships. Barcaly’s earlier this year closed their cash equity and convertible bond trading businesses across all Asian countries. Efinancialcareers, reports on the career choices of some of the bond traders that were laid off. The moves were to the buy side or to Fintech.

Checking on the US, I spoke to Fintech Recruiters. Their business has been mainly US and Asia. They reported that mobile marketers, data scientists, developers; were in demand. Their web site info graphic showcases many insights on the current trends. For example, a Chief Data officer salary is on average Double that of a Business analyst. In terms of Fintech compensation, there has been a 6%-10% average increase.

Fintech Recruiters, reported a shortage of Python develops and a high demand of Javascripts developers specifically for front end & add-on expertise for back-end pieces. The new job title that they see emerging is: Distributed Systems Engineer.

The challenge they see is in the developer recruitment space. Job seekers are looking for:

“A job that can pay in Ether”.

Most developers want to get paid in crypto-currencies, as per Fintech Recruiters.

Matching employees skills with employers needs, but also matching compensation demands and capabilities. The Fintech Recruitment scene is being fed Fintech food.

Democratization of the Fintech recruitment scene

I searched for more Fintechs focused on the recruitment space, that is very alive as financial services undergo digitization. In addition to Angel List, F6S, Fintech Recruiters, that I mentioned above; I found:

The Banking practice, a UK based a 2yr old practice which positions itself as a online talent platform for financial services.

New Finance, the financial network operating out of London via Meetup, is also stepping into the jobs space.

Ashmore Stark, is focused on disruptors, innovators and sales recruitment; so fintech for startups or established firms with a specialty on sales rather than tech.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Efi Pylarinou is a Digital Wealth Management thought leader.

The Daily Fintech Index post Brexit


EXIT is only celebrated in the VC world

No matter what your stance or vote was before June 23rd, there is no celebration going on after the UK referendum.

Brexit doesn’t qualify for me as a Black Swan event (others disagree), simply because it wasn’t unpredictable like the Swiss National Bank’s move in January 2015. Brexit was clearly underestimated and we are now entering into a period of some type of Chinese water torture, during which various events will unfold from the Domino effect. In Seeking Alpha, there are more insights on the topic.

Brexit will probably win top position in events that have multiple and long lasting domino effects. A dozen domino effects or more are foreseeable (i.e. highly probably) and then more that aren’t yet in our peripheral vision, as we live a very interconnected world. A world with intertwined economic and political relations and Big Data is a nascent discipline yet to display these soon and help us prepare.

We’ve been monitoring publicly traded companies through the Daily Fintech Index, and in the beginning of this year, we looked at some metrics to decipher whether the payment disruption story is reflected in their price behavior.

The pound (20+%), the British banks (20%-30%), and Spanish and Greek stock markets (10%+) took the hardest hit. The Chinese stock market and the US reacted the least, and of course, we are all relieved that the weekend gave a breather to everybody.

From Daily Fintech Index (see here listings ranked by market capitalization) there were 7 companies that dropped more than 10%

Ticker Price (S)

MarketCap (bil)

PE % PriceChange
ING 10.18




BBVA 5.38 36 14.3 -18.79%
UBS 13.95 55 10.3 -13.35%
Charles Schwab – SCHW 26.15 36 23.72 -11.92%
E*trade – ETFC 23.11 6 17.79 -11.76%
Nordea bank ADR – NRBAY 8.15 37 8.78 -10.68%
Yirendai -YRD 13.35


12.94 -9.92%

8 companies that dropped more than 7%

Ticker Company name Price (S) MarketCap (bil) PE % PriceChange
AMTD Ameritrade 28.17 14 18.4 -9.45%
WETF Wisdom Tree 9.94 1 17.2 -8.47%
SEIC SEI Investments 46.76 7 24.28 -7.75%
ACIW ACI Worldwide 19.91 2 13.62 -7.35%
GS Goldman Sachs 141.86 61 16.05 -7.12%
FDC First Data 11 10 10 -7.02%
SSNC SS&C Tech 54.94 5 21 -7.01%
JPM JP Morgan 59.6 223 10.1 -6.95%

The bulk are depositary institutions and brokerages (especially in the hardest hit first group). In the second group, we see some large providers of banking technologies (SEIC. ACIW, FDC, SSNC) and few in the investment management business (AMTD, WETF). Yirendai, is only one in the consumer finance and marketplace lending (Lending Club and Ondeck suffered a more muted reaction).

Seeking value in the Daily Fintech Index post Brexit 

A combination of an opportunistic and fundamental approach is recommended during these times. Start monitoring first. Create the Post –Brexit FIN portfolio to watch. Start with the 15 stocks above, add Lending Club and Square (pure fintechs that didnt drop as much and would be worth investing especially if the slide continues), add the four battered British banks HSBC, Loyds, Barclays, RBS and then go through the list of Global systematically important banks (G-SIB) to look for value.

Use TipRanks, that ranks analysts (from corporate analysts to financial bloggers) and stocks and offers a variety of tools for guidance of fundamentals on a portfolio. Check out your potyfolio with the visual snowflakes of Simply Wall St that offer fundamental and sentiment analytics in visuals.

If you believe that equity of Finservs can’t offer value, simply because regulatory fencing doesn’t allow for any risk taking, therefore no juice – expected return; then now is the time to find the financial services firms that are sound and buy debt (as close as possible to the equity part of the capital structure). Any Fintechs out there giving access to retail to research and to trade secondary market debt (smaller denominations and reasonable bid-ask spreads)?

Start by montioring CDS levels that are an important gauge of financial stress. Friday bank CDS spreads traded anywhere from 20% to 34% down for the major banks; but nowhere close to the high levels (see details here).

As Fred Wilson said in “Some Thoughts after Brexit” remember that change creates opportunity if approached correctly.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Efi Pylarinou is a Digital Wealth Management thought leader.

Wrap of Week #25: Regtech thematic week on Daily Fintech


Dailyfintech_logo_blue_2016-04-14-01Regtech is a cross sectional vertical that is emerging in all sorts of shapes and forms. It is global but with heavy concentration in the developed financial markets.

Regtech services are offered from both startups and established service providers. Last week at Daily Fintech the focus was on Regtech:

  • A high level overview of the issues at stake, similarities and differentiations in regulatory approaches and rules.

We mentioned: CappitechSilverFinchVoitrax, KoreConex, IDisclose, AlgoValueCrowdCheck, Suade, Simmons & Simmons, Abide FinancialREGIS-TR, FenegroAvox, Bearing Point, Flextrade, Telstra, Enepath, Starling Bank.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Efi Pylarinou is a Digital Wealth Management thought leader.