Fintech moves into insurance...but so does regulation

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FinTech or financial technology has been evolving faster in the banking sector than it has in the insurance industry, but the process of catching up is now ongoing.

Wu Jun is the CEO of Ensurlink, a company that focuses on developing finance technology for the insurance industry.

He noticed the absence of FinTech in insurance after 20 years working in the health insurance business and started Ensurlink earlier this year.

The company has raised tens of millions of yuan in A-round funding and has many leading insurers in China as its clients, including China Taiping, Zhongan Insurance and AIA China.

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“Health insurance providers have had to collect a lot of paper receipts manually, but that can now be digitized as artificial intelligence technology continues to improve. FinTech can also help insurance firms to better determine how much liability the company has for the individuals it covers,” Wu said.

Top Chinese Internet firms including Ant Financial, JD.com and VIP Shop have also been granted licenses to sell insurance.

Accounting firm EY recently reported that the FinTech adoption rate in the insurance industry has tripled in the last two years to 24 percent, and is expected to hit 45 percent or more within a year.

But Internet companies’ crowding into financial services has alarmed regulators. Last month's National Financial Working Conference warned that more regulation on FinTech is coming.

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Henry Zheng, Associate Director of FinTech & Innovation at EY China, said FinTech can actually help with regulation, so it’s important to have regulators that really understand the technology and motivations behind it before they can work with it or allow it to spread.

“Almost every single component or technology in FinTech can be used in regulation, which is RegTech. So big data, blockchain, all these technologies can be used in FinTech, and at the same time, as RegTech,” Zheng said.

EY’s FinTech Adoption Index sampled 20 markets globally and found that the global average adoption rate has doubled since 2015, and now stands at 33 percent.

China ranks first with 69 percent of the population using FinTech.

India comes second at 52 percent and the UK took the third with a rate of 42 percent.