Industry voices Insurtech North America

Trellis: The Race to Develop the Ultimate Finance Super App – And How Insurance Is Key to Winning

Personalisation has become a huge buzzword in the fintech space. As this trend continues to grow, more and more services are looking to provide an all in one personalised experience for their consumers through a super app.

Speaking to The Fintech Times, Demetri explains how the key to a fintech super app is tapping into the insurtech space to provide a personalised insurance experience:

Daniel Demetri, founder and CEO of Trellis
Daniel Demetri, founder and CEO of Trellis

Fintech leaders like Truebill, Chime, and Mint are racing to secure their position as consumers’ go-to finance ‘super app’. In other words, they are competing to integrate every aspect of a user’s financial life into a single, comprehensive, digital platform.

Incumbent financial institutions have lagged in digitally delivering holistic financial services, but we see them expeditiously working to catch up. Both Chase and Bank of America have introduced new budgeting features in their mobile apps, and Capital One has acquired a slew of budgeting apps throughout the last decade, including Bundle and Level Money. Even major retailers have joined in: last month, Walmart shared plans to create its own finance app and announced its acquisition of two fintech firms.

As competition heats up, both startups and established players are working furiously to develop a financial super app that will dominate the US market – and some frontrunners are discovering powerful solutions in an unexpected place: insurance.

Why 2022 will be the year of the US super app  

Once upon a time, I believed consumers wanted “the best” from their MP3 players, their phones, and their cameras, and that this demand for functional excellence would prevent consolidation into a single device. Whoops. Learning that lesson the hard way helped me clearly understand how deeply consumers – and particularly US consumers – prefer to get everything done in a single place. Their financial chores will not be different. But why now?

For one, the digital transformation of financial services is nearing the end of its first innings. Until now, firms could win merely by constructing best-in-class services like Affirm‘s buy now pay later and Venmo‘s peer to peer payments. This has been like the first stage of Monopoly where deeds can be won just by stumbling on their grounds by chance. Now that most valuable verticals have clearly established winners, competitors will start eyeing their neighbours’ turf.

Additionally, until last year, the need for a finance super app was mitigated by the existence of social media super apps, which offered hyper-targeted advertising programs based on aggregated third-party data. Mortgage lenders, for instance, used to be able to find and advertise to first-time homebuyers who had recently visited a realtor’s website. In the wake of iOS 14, digital marketing must rapidly shift to first-party data. Collecting first-party data requires consumer engagement inside of a single digital platform.

Finally, millennials – the first-ever digitally-native generation – are maturing into new categories of financial services. For instance, in 2020, Rocket Mortgage originated over $320billion in mortgages – roughly twice as much as its next two closest competitors – which can largely be understood as the millennial generation adopting a digital leader on their path to homeownership. As millennials’ finances reach increasing levels of complexity, they demand a higher bar for digital financial services that work in concert to accomplish their goals.

How fintech leaders are tapping insurtech to get ahead of the pack

For fintechs, the path to super app domination will be paved by user data and user engagement. Only with a rich awareness of their customer can financial service providers deliver the right products configured the right way. And only with broad-based relationships can they ensure they find an open ear at the right time.

This is where insurance – and especially, insurance data – comes in. Insurance applications and policies provide a wealth of customer profile information that facilitate better-targeted financial recommendations, and insurance shopping and renewal touchpoints create valuable opportunities for broader member engagement.

The $300billion market for personal lines of insurance has not gone completely unnoticed by financial services strategists. USAA, the highest-rated bank in the country, provides auto insurance for more than half of its 13 million members. Citigroup merged with Travelers for a time. Enterprising insurance agents have found clever locations for their agencies, including next to my home in Salem, NH.

The most common mistake has been trying to manufacture both sets of products in-house. Citigroup failed to integrate Travelers because being a Citigroup customer didn’t necessarily make you a good Travelers policyholder. The opportunity is to help customers find the best products and services in every category, not to develop them all in-house. If Amazon threw out everything other than Amazon Basics, their business would grind to a halt.

Helping members discover better insurance options has never been easier. Embedded platforms like Savvy – provided by my company, Trellis – seamlessly integrate end-to-end insurance marketplaces into partner apps like Rocket’s Truebill and Austin Capital Bank’s Credit Strong. At the press of a button, members can save hundreds of dollars per year on one of their largest household expenses, while generating hundreds of dollars in non-interest revenue to drive the referral partner’s growth.

Even better, when customers share their insurance profile, digital finance platforms get a trove of first-party data they can use to target and personalise other products and services. Armed with a user’s insurance data, a fintech company generally has enough information to offer a ‘one-click’ refinance of the customer’s auto loan. After that, the platform can suggest student loan refinancing to recent graduates and credit cards with cashback on gas to high mileage drivers. All of this is possible because insurance profiles include much more than just coverage limits and deductibles. They include a host of datapoints like education, occupation, date of birth, Vehicle Identification Number (VIN), and the name for every member of the household and their vehicles. 

Looking beyond simple marketing campaigns, the time has come for fintech companies to capitalise on this ‘alt data’ to introduce entirely new underwriting techniques. For instance, a customer with five years of timely insurance payments and not a single claim might be more creditworthy than her modern, thin file might otherwise indicate. Another customer carrying high limits and a broad set of coverages (such as personal injury, car repair, and substitute transportation) may be less likely to request forbearance on his loan.

In short, positioning insurance next to financial services has always made sense, and the technologies finally exist to make this convenient and accessible inside financial service providers’ digital platforms. The prize includes new opportunities for engagement, new streams of revenue, and data that can be used to out-innovate the competition. 

The real winners of the finance super app race? Consumers.

As fintechs evolve into super app platforms, customers will benefit from a singular interface that understands their habits, preferences, and real-time needs by delivering tailored digital financial solutions far beyond what is currently possible. The addition of embedded insurance to the super app movement will give an instant competitive edge, allowing companies to evolve from a handful of point solutions to a holistic, user-centric experience. 


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