FINTECH to Improve Personal Investing

FINTECH in Insurance, Retirement Plan and Real Estate

Hello FINTECH enthusiasts, in previous article we discussed how Robo-advisory has disrupted the personal financing and investing. Today I’m going to discuss about the FINTECH involvements in insurance, retirement plans and real estate segments which are sub segments of personal financing and investing.

Welcome to the future!!!


Insurance sector has been redefined with the introduction of Insuretech. Medical insurance/life insurance has become more flexible, cost effective and efficient with the introduction of technology. In many parts of the world insurance is done by just a click on a mobile app with lot of flexibilities.

FINTECH also has created a secondary market for insurance policies. Life settlement market is the secondary market where people can sell life policies they no longer required. The seller receives a payment and buyer continues to pay the premium on behalf of the policy holder. More people deciding to sell the life policies they no longer need to get cash for unexpected expenses or to put forward retirement.

This market has been run through brokers. However now there are online platforms which have launched consumer direct campaigns. Policyholders just have to enter some information about themselves and the policy they want to sell and the system generates a quote. Once accepted, the policyholder receives the payment.

Convery Health care is one such insurance solution provider

Retirement Plans

Retirement plan is a crucial element of any individual. As a result this market can be considered as one of the largest and growing market worldwide holding roughly over $140 trillion worth of assets. Therefore FINTECH startups consider this as a lucrative market. Retirement plans can be divided in to two categories as defined benefit plans (where employees guaranteed a fixed set of benefits upon retirement) and defined contribution plans (where employees allocate their contributions themselves to achieve retirement benefits they desire). In the last decade defined contributions market grew more rigorously as it gave the flexibility and ability for employees to achieve their desired retirement targets.

However the individuals required to have knowledge in asset allocation based on changes of income level, inflation and other variables or get a professional advice to do so. This is where FINTECH steps in.

With the introduction of FINTECH solutions to the retirement plan space, the companies started offering highly customized solutions. These retirement plan platforms gather some personal information of the clients such as age, gender, marital status, and salary and create a default setting for retirement age, contribution rate, and desired target retirement income etc. protected for inflation and risk for income level. Then algorithms and simulations are used to create an optimized profit allocation strategy for each individual.

The interesting part is, the participant’s investment allocation is then change dynamically in response to changes in income, accumulations, contributions and market conditions while participants were not required to have any involvement in the process. In other words, FINTECH managed to take away all the stress about your retirement plan from you and ensure you get what you desired when you retire.

Dimensional Fund Advisors is an example for such retirement solution provider.

Real Estate

Real Estate can be considered as another huge market which got the involvement of FINTECHs in past decade. Technology has revolutionized Real Estate market in several ways.

  • Real Estate Renting.

I’m sure you have heard of Airbnb. It’s an amazing platform started in year 2007 and became a premier online market place where home owners and bed and breakfast property owners could turn vacant rooms in to nightly rentals. Airbnb created an online reservation system to facilitate transactions, which included a reputation system to build trust and reliability among market participants. Now there are many FINTECHs which have entered this market competing with Airbnb.

  • Shared spaces.

Shared space is another innovative concept in Real estate which made working space more affordable and flexible. Now it is not really necessary for a SME or for businessmen to invest huge amounts of money to rent, build or buy office spaces. There are many co-working spaces/shared office spaces for even daily rental making your life so much easy.

  • Property Crowd funding.

Have you ever worried about not having enough capital to invest in property? Well, FINTECH has solved your problem. Property Crowd Funding is now a solution as it allows you to invest in a property with any amount you can afford. There are many property crowd funding platforms allow you to own a fraction of a property located in anywhere in the world and to earn a rental income or capital gain, proportionate to your investment.

As an example, a group of people will invest and buy an apartment. The Crowd Funding platform will rent this apartment and takes care of its maintenance. The platform will charge a fee from your investment to facilitate that. Then at the end of the month you will receive a portion of rental income. Also at the time of selling this apartment, you will receive part of the sales proceeds including a capital gain.

  • Smart Buildings/Smart cities

In smart buildings and smart cities, the technology being used to automate processes to automatically control operations such as heating, air-conditioning, lighting, security, ventilation etc. This allows to use energy and many other resources in a much more efficient and effective manner. Also the centralized data collection system helps to significantly improve the management of these buildings and cities. There are few concept smart buildings and cities being built and we may see many more coming up in the future.

I believe you had a fairly good idea about the FINTECH involvement in Insurance, Retirement plans and Real Estate segments and I hope this knowledge will help you to make better decisions on your personal investment and wealth management. However FINTECHs are just entering these markets and have barely scratched the surface. There is so much of potential.

The question for you is will you trust a robot with your retirement earnings? Will you trust a robot to make sure you got the right price for your house? If you will, how good that robot should be? Think about it.

I will discuss about blockchain and crypto currency in a simple, understandable way with my next article. Until then stay curious, stay tuned and be safe friends!!!

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