New business models: Fintech & Insurtech

June 18, 2021

The world of technology has changed a lot in the last decade, only in Panama has the increase of Startups been noticed that have been created. Many of these are born from competitions or projects developed by the central government, which has bet on investment in this sector, and today generates millions of dollars worldwide.

Fintech and Insurtech are part of this technological revolution, which I know today as a novel topic but has been going on for many years since its beginning.

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What are Fintech & Insurtech?

First, we must understand, Fintech is a financial company that was born as a startup and based on technology, it bases all its operations on the cloud. On the other hand, Insurtech can be defined the same way, it is an insurance company that is born as a startup but bases all its operations on the Cloud.

This represents an invaluable agility in the sector, allowing you to access all its products and services from your mobile device or web. This also makes it a flexible business because you don't have to depend on timetables to manage your business.

Although in this way it sounds like infinite possibilities, most Fintech and Insurtech currently only have one product or service.

Why is your portfolio so small?

Because unlike a traditional financial or insurance company, they do not have the same infrastructure or capital. In order to change this, they have chosen to generate shareholders and investors by generating the profitability of their business.

From this point, a crucial role is played. Most of these companies are not interested in becoming a traditional company, but maintain their business model, many others have chosen to collaborate with traditional companies so that through their services they can reach more customers. And this is something that will continue for a long time because it is working.

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What is the role of Fintech and Insutech in Panama?

Although this business model has not had such an impact in our country, there are some Fintech companies operating today. Insutech, on the other hand, is a model that has not been adopted. The problem with this business in Panama, is its regulatory base established by the Superintendence of Insurance and the Superintendence of Banks in addition to its profitability in the market because although there is a great acceptance worldwide, people prefer the traditional business model.

Even so, there is a promising future for these industries, which has taken advantage of the development of Mobile Applications and Websites to attack the weaknesses of the traditional industry, to offer products and services in a more innovative and simple way.