Decades ago, it was hard to imagine buying plane tickets through the internet or booking hotels and cars with only a click of a mouse. Today, this is the reality, including the financial services industry.
Fintech is the use of technology to provide new solutions and innovative changes that disrupt current practices and business models in the financial services industry. According to Accenture’s Fintech Innovation Lab Report, investments in fintech companies quadrupled from $880 million to $3.5 billion in just nine months in the Asia-Pacific region (including Australia and New Zealand). In this year’s World Economic Forum in Davos, Switzerland, a panel discussion was held on the importance of fintech in emerging markets, and how the world’s largest financial services firms stand to lose $150 billion in revenue to financial technology startups.
Financial comparison websites fall under fintech. These platforms provide efficiency to conduct research, access to comprehensive information, and innovation to disrupt current practices toward financial services and products. They function in the same way as Agoda does for hotels and Skyscanner for plane tickets.
Besides comparison websites, fintech companies can range from social and commercial trading to digital wallets and lending. Now the question is: why is so much investment going into these financial comparison websites? What value do they provide?
A consumer-centric landscape
Gone are the days that a generic information template is perceived to fit all types of financial product consumers. The information in comparison websites is personalized according to the user’s preferences through demographic filters, such as for instance, for car insurance, like gender, age, location, and car model so that the potential customer will only look at relevant car insurance prices and not waste time. This can also be applied to preference filters like ranges of interest rates and payment terms, among others.
This makes information at the comparison platform give the best solution toward the objective of the customer visiting a financial comparison website—finding the options with the best rates or best product inclusions at the fastest time possible.
An unbiased and wider market coverage
Comparison portals compile information on a variety of financial services and products based on their independent research. More advanced comparison portals, as those in other countries, go further by covering everything from car and travel insurance policies to personal loans and savings accounts. On the other hand, financial institutions such as banks and brokerage firms may be focused on a limited array of financial products, to which they specifically cater.
An eye for the future
With technology being such an integral factor of growth in these businesses, current systems and practices are continuously being redefined. In previous decades, cash on hand or checks were personally deposited in a local branch. Today, money can be transferred through the internet with an electronic banking account or cashless payment systems like Zap and Tagcash. Tomorrow, digital currencies like bitcoin may become the norm.
Applying for car insurance or a credit card had always been done through an agent. When it comes to comparison websites, it can now be done online. That possibility would have seemed impossible in the ‘90s, but this is one factor that makes financial comparison portals a platform for conveniently finding information and acquiring financial products. They continually grow on their current practices and technologies to meet the ever-changing needs of consumers.
Bridging tech and finance
Financial comparison websites contribute to the digital and economic landscape through dynamic innovation and technological leadership. Through them, financial services and products have been made more accessible to consumers while also creating a more customer-centric landscape rather than an institutional-dictated one. In turn, this is shaping the way consumers interact and purchase these services and products as the need to purchase them arises.
Bea Bongat writes about personal finance at MoneyMax.ph and has also contributed articles to Yahoo! Philippines and Rappler.com. MoneyMax.ph is a financial comparison website aiming to help Filipinos save money through diligent comparison of financial products.