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The rise of the “on-demand economy” has ushered in a new breed of businesses that operate based on the idea that customers can play a larger role in their experiences. Companies such as Airbnb, Snapgoods and RelayRides have all burst on to the scene as a result of the push toward putting more control in the hands of the modern customer. Perhaps no company exemplifies the disruptive potential of the on-demand economy more than ride-sharing company Uber. While Uber is already making waves in the transportation industry and turning the traditional taxi business upside down, peer-to-peer (P2P) lending companies pose a similar threat to traditional banks.
Uber’s Big Splash
Most of these new on-demand economy businesses come about when a traditional, established business leaves open a window of opportunity due to inconvenience, inefficiency or high costs. In the case of Uber, the traditional taxi business in major U.S. cities has historically included a bit of all three of these characteristics. Uber founders recognized that the idea of standing on a street corner and helplessly flailing a hand in the air or calling a dispatch operator and hoping that a cab will show up within the next several hours is not the optimal way to get from place to place in a modern city. In a matter of years, Uber has gone from an unknown startup to a $41 billion company with 160,000 active drivers that have generated more than half a billion dollars in fares.
Take Control Of Lending Banking customers have the same helpless feeling of someone standing on a busy street corner hailing and whistling for a lone passing taxi. To borrow money, you must meet the bank’s qualifications, the bank’s credit score, pay the bank’s interest rates and bend over backwards for the bank. On the other hand, if you want to get paid interest on your capital, you must agree to whatever interest rates and terms the banks set on CDs or other financial products. When it comes to traditional lending and borrowing, there is little to no negotiation and little choice in the matter. Sure, one bank’s terms might be slightly better than another, but there is generally very little difference between competitors’ lending and borrowing standards.
The Freedom of the Marketplace Marketplace lending companies have recognized that both lenders and borrowers want more freedom when it comes to loan creation. Instead of a complicated, time-consuming process, borrowers can go online, enter a few critical pieces of information and be matched with a lender within a matter of hours. Instead of being turned down because a particular loan does not meet the standards of a bank’s core lending business, these online platforms allow both borrowers and lenders to create loans that are outside the box of traditional bank lending.
Disruptive Power Traditional banks likely looked at marketplace lending the same way that the taxi business looked at Uber when it first launched. However, like Uber, marketplace lending’s true potential is beginning to turn heads. According to a PricewaterhouseCoopers (PwC) report, P2P platforms accounted for about $5.5 billion in loans in 2014. While this number is only a drop in the massive present-day banking ocean, PwC analysts project the market could balloon to $150 billion over the next decade.
Wake-Up Call The on-demand economy is still in its infancy, and certain segments, such as ride-sharing, have gotten off to a strong head start. However, more people are beginning to recognize the true potential of putting the power in the hands of the customer. As the movement toward alternative finance continues to grow, traditional banks could be in for a major wake-up call.
Disclamer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. Although we promote products and services form our partners, our opinions are our own.
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Goldman Sachs-backed Even Financial, a digital matchmaker between banks and customers, just bought an insurance startup as life insurers are seeing policy applications boom
Even Financial has acquired LeapLife, a leading insurtech platform. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Business Insider wrote an article about it, interviewing our CEO and Founder Phill Rosen.
Even Financial Launches Insurance Offerings With Strategic Acquisition of LeapLife, a Leading Insurtech Platform
Pioneering B2B Fintech Expands its Industry-Leading Financial Services Monetization Platform to Help Insurance Carriers Find and Connect with Consumers New York, New York – April 22, 2020 – Even Financial (Even), the leading API for financial services search, acquisition, and monetization, announced today that it will be launching services for the insurance industry through the acquisition of LeapLife, an insurtech platform and digital life insurance agency. The addition of LeapLife allows Even to immediately commence its insurance capabilities, aimed at simplifying and enhancing the way consumers search, compare, and get matched with insurance policies (LeapLife’s existing platform will continue to operate from leaplife.com). Even and LeapLife now offer the only full end-to-end, multi-carrier digital life insurance marketplace experience. Over the coming weeks, Even will further integrate LeapLife’s technology and insurance offering into its industry-leading API, making turnkey insurance marketplaces programmatically available to a vast network of channel partners — when and where their consumers are most in need — while also enabling the company to expand to other insurance sectors, including homeowners, renters and auto insurance. This adds to Even’s peerless breadth of real-time, personalized financial product offers — an expansive suite that already includes loans, savings, credit cards, and more. “Even’s goal to evolve how financial institutions find and connect with consumers is not limited to loans or credit cards, but applicable to all financial products and services, including insurance,” said Phill Rosen, Even Founder and CEO. “Despite its importance, purchasing life insurance is often an overwhelming and inconvenient experience. With more than $600 billion in premiums paid each year, and only 6% of policies sold completely online, we see tremendous opportunities to help modernize the life insurance industry and offer solutions that solve challenges for consumers and carriers alike.” LeapLife is an established insurtech platform and digital life insurance agency that utilizes data science, deep underwriting knowledge, and proprietary technology, enabling consumers to apply for instant-decision life insurance policies with real-time quotes. LeapLife works with many best-in-class insurance carriers to offer consumers a seamless experience from beginning to end. This approach made Even and Leaplife a perfect match. As a digital insurance broker, LeapLife offers personalized life insurance recommendations based on a consumer’s unique needs. Paired with the Even API, which enables customer acquisition for insurance to be native and programmatic, consumers benefit from a more streamlined, transparent, and highly personalized experience when shopping for life insurance. Just as Even’s 2018 acquisition of Birch (the award-winning credit card rewards app) allowed the company to accelerate its expansion into credit cards, the addition of LeapLife will similarly put Even at the forefront of consumer insurance offerings. Charles Svirk of MassMutual Ventures, an investor in Even, said “The Even and LeapLife teams share a vision that the future of insurance acquisition will rely on the power of data-driven, programmatic distribution. We are thrilled to support them as their industry experience, impressive technology, and trusted relationships will help scale Even’s insurance offering and build partnerships to provide these critical innovations in insurance acquisition.” The Even API and platform solve significant, long-standing pain points in financial services acquisition by seamlessly connecting supply and demand. Even has continued its rapid growth trajectory in 2020, surpassing over $1.5 billion in credit issued through its API and expanding its platform to over 400 partners. Even has secured over $55 million in funding from major financial institutions, venture capital firms, and fintechs to back its goal to evolve the financial services acquisition ecosystem. About Even Financial Founded in 2015, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. By seamlessly bridging financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as TransUnion and The Penny Hoarder) via its industry-leading API, Even turns any consumer touchpoint into an ROI-driven, fully customizable, programmatic acquisition source for financial product offers with full compliance, security, and scale across loans, savings, credit cards, insurance, and more. Even is backed by leading financial services firms and VCs including American Express Ventures, Canaan Partners, Citi Ventures, F-Prime Capital (Fidelity), Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Even is the leading search, comparison, and recommendation engine for financial services. Media Contact: email@example.com
Even CEO/Founder Phill Rosen quoted in Protocol Braintrust Newsletter
Our CEO and Founder Phillip Rosen was included in the most recent Protocol Braintrust newsletter along with answers from some thought leaders from Plaid, Slack, and DuckDuckGo!