FinTech
WealthTech and InsurTech
Arunava Bandyopadhyay,
Jindal Global Business School,
O P Jindal Global University, Sonipat
06-Oct-2022
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Impact Investing
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WealthTech
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Key categories of WealthTech
• PERSONAL FINANCE MANAGEMENT applications
• Investing tools
• Digital Brokers
• Investment Platforms
• Robo advisors
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Key Trends in WealthTech
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Robo Advisors
• Technically, a robo-adviser works in the same way like financial
advisors do - recording customer goals/time horizon, assessing
risk profile, suggesting and executing investment strategies and
reporting portfolios.
• Examples: Betterment, Wealthfront (both U.S.) and Nutmeg (the
U.K.)
• robo-advice providers offer asset allocation strategies,
executing through index/passive (mostly ETFs), tax harvesting
to optimise tax - all with a focus on long-term goal-based wealth
creation.
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WealthTech in India
• While some players offer ‘direct’ mutual funds (with no embedded
trail commissions), they still prefer selecting active mutual funds over
passive ETFs; we assume they intend to charge the clients a fee at
some point
• Some players offer ‘goal planning’ helping users to calculate the cost
of goals and how much they need to invest and ‘goal tracking’
showing if users are on track to meet their goals
• Very few offer full financial planning, rebalancing, tax harvesting etc
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License - mutual fund distribution (MFD) vs
registered investment adviser (RIA)
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InsurTech
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Classification by Milken Institute
Milken Institute, “InsurTech Rising: A Profile of the InsurTech Landscape,” December 2018.
• Segmentation of Insurtech Firms
• A “traditional” view: Full-stack / Agents / Brokers
• A nuanced view of sub-segments: Carriers / Enablers / Distributors
• Full-stack Insurers: Platforms that underwrite policies, assume the risk,and, in most cases,
manage the process from beginning to end
• Agents: Platforms that act on behalf of a carrier, essentially acting as an extension of an incumbent
carrier
• Brokers: Platforms that provide customers with a variety of policies offered by both incumbent
carriers and insurgent InsurTech platforms
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Capgemini World InsurTech Report 2018
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