Everybody’s talking about the latest offering from Apple, the Goldman Sachs-backed Apple Card, and the insurtech dynamos at KASKO are no different. Here we quiz its CEO and Co-Founder Nikolaus Suehr on the world’s coolest, not to mention hardest (it’s made from titanium, don’tcha know?), credit card…
The services offered by the new Apple Card have been described as “rare but not unique”, how is it going to compete in a crowded market?
I think that this is fair, after all, most financial services are not truly unique, at least not for long. Is there really much being offered here that isn’t in existence on Monzo, N26, Revolut, Curve, Starling or one of the plethora of other starter banks out there?
What really matters in this case, from the start, is distribution access. Low cost, high scale production costs and an unfair advantage through brand or bundling, whether a fanboy/girl or not, one thing that Apple has in spades is brand. Apple can pass its usual financial services margins on to the consumer as they earn a high margin on their existing services and products, or even subsidise the service at a loss if it extends overall customer lifeline value.
Is there really much being offered here that isn’t in existence on Monzo, N26, Revolut, Curve, Starling or one of the plethora of other starter banks out there?
Do you see the partnership of Apple, Goldman Sachs and Mastercard as a sign of things to come? What does such a union signify?
It certainly signifies the age of corporate ecosystems, it’s interesting that Apple doesn’t pretend to control the entire value chain but shouts about a partnership with a best-in-class provider. In terms of consumer brands breaching into financial services (payment, credit, insurance) we will see two main partnership plays happening.
Large international corporates banding together for international footprint (as is the case here)
Selection of national networks of best-in-class services provided by both corporates or consumer facing fintechs
In both cases, enabling fintechs and tech providers will glue the ecosystems together.
Does the partnership spell trouble for the smaller fintechs?
Potentially, unless smaller fintechs enable large corporations to deliver technical capabilities into these types of partnerships or even own-branded services in the long run. At KASKO, over on the InsurTech side of life, we were just that, a smaller firm going it alone until we realised our core product strength, now we work with some of the largest insurers on the planet, adding startup speed to their well-established networks.
As big tech moves ever closer to big finance, what measures if any, should governments be taking?
Governments need to ensure that big tech adheres to local financial regulation. Customer data for offering free advertisement-funded digital services is one thing, but destabilising and monopolising finance and insurance services (without which commerce and the economy doesn’t function) is another. Especially given the reputation of US-based tech giants and their history of limited corporate citizenship, for example, Governments need to be careful of enabling local jobs and services to continue to work whilst allowing a new financial future for its citizens.
Anything else you have to say on the matter?
Yet another flickering light of the advent of ecosystem-based value networks where cluster focus, connectivity and openness trump the traditional IP resource-based view.