Dynamic Product Creation – the new killer app.

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Fintech Service Providers sell to Finserv incumbents either cost reduction or revenue generation value propositions. Disruptive fintech startups or initiatives from Finserv incumbents focused on distribution channels – digital banking, digital insurance brokerage – secure engagement, lower churn and cement the delivery of new products or services to new generations of customers.

Schematically and simplistically, companies either compete on cost – cost reduction and optimization – or on revenue – revenue expansion. Service providers either provide cost reduction value propositions or revenue expansion value propositions.

So far, so good. Even if the value propositions seem too simplistic for my tastes.

Lately, I have encountered business models that have the potential to break out of the dualistic cost or revenue approaches. Let me paint the picture more precisely.

Example A – fintech service provider sells to finserv incumbent: SaaS startup sells a cutting edge data analytics platform to reinsurers and insurance carriers. Original value proposition was focused on reducing cost of risk analytics, compiling of historical underwriting data, optimizing of the cost structure of underwriting pricing. While selling its platform the startup stumbled upon a golden nugget: Several reinsurers asked whether the data analytics platform, rather than be focused internally could be focused externally, in a dynamic fashion, to help the carrier craft a new insurance products to sell to its clients based on real time data crunching and what if scenarios.  One scenario the startup encountered involved presenting in real time weather related data, presenting said data and creating weather related indices for insurance coverage, thereby creating new sets of products.

Example B – fintech disruptor helps finserv incumbent: Mobile insurance startup acquires retail clients, helps clients make sense of their insurance coverages off of a wallet on their mobile phone. Startup then advises clients on relevant or optimal insurance coverage based on data clients provides directly or indirectly via phone. Startup starts notifying its clients about upcoming needs on an ad hoc basis.  For example, Startup will notify one client they may need a coverage as they embark on a one week trip to another country for a specific vacation or a specific business trip.  Multiply this by 10,000 times and the Startup will turn around and share its data findings with an insurance carrier or reinsurer and help them create a new insurance coverage: one week coverage to cover an entire family visiting Oktoberfest in Munich for example, all risks included.

I make a distinction between revenue generation from contextual presentation of existing products or services to clients off a digital channel with dynamic creating of new products or services. The gap is immense. Think of data analytics aided by aggregation of data and behaviors off of mobile phones to not only suggest new demand from a client, but also new supply from a product/service providers. A new paradigm for sure, and one I believe many apps will gravitate towards.

In a way one can view a stack of revenue generation from least to most sophisticated. Least would be presenting and selling existing products or services known to a client contextually using data analytics. More would be presenting existing products or services not known to a client, contextually, using data analytics.  Most would be presenting new products or services not known to either client or provider, contextually, using data analytics.  The latter is truly a game changer and killer app.

How far are we from this vision?





Pascal Bouvier

Life and work experiences have given Pascal an unmatched vantage point, seeing things as both venture capitalist and aspiring entrepreneur. He currently is a Venture Partner with Santander Innoventures – Santander Group’s Global Fintech fund.

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