Consumer’s become the currency
Vastly successful e-commerce and communication mega-platforms are fast becoming the go-to means for conducting all kinds of day-to-day commercial activities. We see it in Amazon’s one-click purchasing. We see it in friend-to-friend payments through Facebook Messenger.[1] And we see it in Pinterest’s in-app “buy” functionality.[2]
It’s all about fast, simple, and convenient commerce. And it’s no longer even restricted to our laptops or smartphones. The number of voice interfaces sold globally is expected to grow by 84 percent by 2021. And other connected devices – appliances, clothing, fashion accessories, sensors – are creating new ways for consumers to make secure, frictionless purchases.[3]
Cryptocurrencies like Bitcoin, and other distributed public blockchain networks like Ethereum, are revolutionizing how consumers think about financial services. Fueled by smartphones, sensors, and blockchain technology, these networks offer the potential of leapfrogging incumbent financial institutions, real estate services, capital markets and identity platforms.[4]
But established players are in the business of disrupting commerce too. Joining rivals like Venmo and Square Cash in enabling peer-to-peer payments, Apple Pay Cash made its debut in December 2017. Using the Apple Pay wallet and a linked credit/debit card, users can quickly and easily transfer money to friends, or pay for commercial services that accept Apple Pay.[5]
All this tells us something important: speed, simplicity, and convenience are today’s watchwords for commercial success.
Interesting changes coming
A big shift in banking is underway. In the US, roughly $30 billion is set to change hands between the Baby Boomers and the Millennials. And that younger generation is looking for new and different ways to invest. Less concerned about in-person advice and high-net-worth strategies, they want cost-effective transactions, and a unified view of their investments and wealth. And that’s exactly what they’re getting from wealth management platforms like Wealthfront and Betterment. So, for the new generation of investors, it’s out with the oak-paneled office, and in with the low-cost robo advisor.[6]
And those robo advisors are getting smarter. Driven by the availability of vast amounts of data, better processing power and storage capacity, and breakneck advances in AI modeling techniques, these digital advisors are heralding a new era of low-cost personalized financial advice.[7]
Cost-effectiveness is one thing. But Millennials also want ethical purpose in their financial services. Startup Lemonade, for example, uses AI to provide tailored ‘micro-insurance’ to protect new assets at different durations – perfect for Generation Rent. But they also donate all unclaimed money to charities of their policyholders’ choosing.[8]
Technologies like blockchain are also changing approaches to ethical lending. For example, BanQu is a startup building an economic identity platform on top of the Ethereum blockchain. It’s enabling users to build their own transparent economic histories and credit profiles, and helping credit recipients avoid some of the pitfalls of existing microfinance models, such as the persistence of middlemen.[9]
With faster, more secure payments through digital wallets, with cashier-free convenience stores, [10] and with cryptocurrency payments seamlessly converted into dollars,[11] digital is changing everything about commerce – from wallets to wealth management to store windows.
Wealth meets health
The digital connections that have transformed commerce will finally begin to do the same in healthcare. They’ll simplify the complex and arduous steps that persist in today’s processes. And they’ll enhance access, transparency, and the management of healthcare finances.
The confusing paper-heavy billing that has plagued healthcare for years is being replaced by simpler interactions between payers, providers, and consumers. Startup Medxoom is enabling employees and employers to monitor and manage their healthcare finances in a smarter, more user-friendly way, using a mobile app to make healthcare payments and arrange financing.[12]
Likewise, Instamed adopted Apple Pay early on to make the settlement of consumer co-pays easier and more convenient.[13] And Memorial Herman found it could boost satisfaction and reduce costs by launching an ‘Amazon-like’ platform to simplify the way patients pay medical bills.[14]
One area where digital is particularly effective is in radically cutting down healthcare fraud and waste. And the big players are getting involved. Xerox is spinning out a standalone company, Conduent, offering state-of-the-art analytics to determine the appropriateness of funds and payer liability and enhance the detection of health insurance fraud.[15]
Those analytics have other uses too. EasyScripts makes software that gives physicians a window into the cost-effectiveness of their drug prescription processes. It also tracks how well patients stick with their treatments and provides analytics tools to support physicians’ decision making.[16] And DenialsIQ is an analytics platform from GE Healthcare and Accenture which is reducing healthcare providers’ lost revenue by cutting the cost of reprocessing denied insurance claims.
As personal finances and healthcare finances become ever more entwined, it’s possible to envisage a future in which financial advisors manage everything from investment portfolios to healthcare insurance premiums.
[1] TechCrunch; “Facebook Introduces Free Friend-To-Friend Payments Through Messages;” posted online March 17, 2015 at https://techcrunch.com/2015/03/17/facebook-pay/
[2] Forbes; “Pinterest Reveals Its Buy Button, Lets Pinners Make In-App Purchases;” posted June 2, 2015 at https://www.forbes.com/sites/kathleenchaykowski/2015/06/02/pinterest-reveals-buyable-pins/#4e8117f33b34
[3] Forbes; “Three Payment Trends That Will Change How We Pay in 2018;” posted October 27, 2017 at https://www.forbes.com/sites/michelleevans1/2017/10/27/three-payment-trends-that-will-change-how-we-pay-in-2018/#5501d5f96c2c
[4] Recode, “Bitcoin is at $10K — and that’s just the beginning of how it will revolutionize money;” posted November 29, 2017 at https://www.recode.net/2017/11/29/16716014/bitcoin-price-10k-ethereum-blockchain-cryptocurrency-value-creation-global
[5] Fortune, “Apple Pay Cash Debuts in Challenge to Venmo;” posted December 5, 2017 at http://fortune.com/2017/12/05/apple-pay-cash-ios-11/
[6] Forbes; “Robo Advisors And The Great Money Movement;” posted September 12, 2017 at https://www.forbes.com/sites/stephaniemacconnell/2017/09/12/robo-advisors-and-the-great-money-movement/#79b0e4ea11d7
[7] Venturebeat; “3 trends powering the rise of financial robo-advice;” posted November 24, 2017 at https://venturebeat.com/2017/11/24/3-trends-powering-the-rise-of-financial-robo-advice/
[8] Forbes; “How Startup Lemonade Is Redefining Insurance For Millennials;” posted July 12, 2017 at https://www.forbes.com/sites/jefffromm/2017/07/12/how-startup-lemonade-is-redefining-insurance-for-millennials/#755b0bf311b0
[9] Coindesk; “Microlending Startups Look to Blockchain for Loans;” posted December 8, 2017 at https://www.coindesk.com/microlending-trends-startups-look-blockchain-loans/
[10] The Verge, “Amazon just launched a cashier-free convenience store;” posted online December 5, 2016 at http://www.theverge.com/2016/12/5/13842592/amazon-go-new-cashier-less-convenience-store
[11] https://bitpay.com/
[12] https://medxoom.com/
[14] FierceHealthcare; “How one hospital system transformed patient collections, improved satisfaction;” posted May 12, 2015 at http://www.fiercehealthcare.com/finance/how-one-hospital-system-transformed-patient-collections-improved-satisfaction
[15] https://www.conduent.com/insights/healthcare-payer-solutions/health-insurance-fraud/
[16] Built in Chicago; “This MATTER startup has a plan to cut healthcare costs — and make patients safer;” posted September 12, 2017 at https://www.builtinchicago.org/2017/09/12/eazyscripts-takes-on-healthcare-costs