Banking executives have told DigFinthe opposite: that most providers don’t like to see their products get so transparently compared by independent sites, while insurance companies’ agents view comparers with suspicion – especially those agents selling complex, expensive policies that wither under scrutiny.
For two regional fintechs running the most high-profile comparison businesses, their business models are evolving to make themselves increasingly relevant to the financial institutions – as sources of lead generation, not just as sites where retail consumers can analyze products in relatively straightforward, apple-to-apple ways.
“We win by helping partners,” said Sam Allen, Hong Kong-based CEO at CompareAsia Group, whose brands include MoneyHero in Hong Kong, SingSaver, and others in five more markets. The company now serves around 5 million customers a month.
Transaction to information
The original argument by comparison sites was that they could drive new customers to banks and insurers. But that’s not enough, particularly if a transparent model attacks the fees and commissions that underpin the industry.
In response, CompareAsia is pivoting into a data company. “It’s about how to use data to deliver a more personalized service” to bank and insurance partners, Allen said.
The company has begun to automate some partners, connecting with them via APIs. This enables real-time approvals of loans, credit cards or other products, removing the need for a human to follow up. The more information a customer shares, the more likely they are to secure an automatic approval.
Allen says there are some providers that have automated with CompareAsia this way – but most have not, meaning consumers can only browse the website to compare rates, and then submit an application via the site and wait to hear back from the bank.
A trusted source?
Customer data is increasingly the focus at GoBear, too. Adrian Chng, who joined earlier this year as its Singapore-based CEO, says the business model is shifting from purely lead generation for banks and insurers, to a source of data about those users.
“In the future, a retail lender will use GoBear to assess and price risk,” Chng told DigFin. As products commoditize – a process quickened by greater transparency and simplicity – banks and insurers will compete more on how well they can evaluate a potential customer.
“We’re a data-analytics source for providers,” Chng said. “We see consumer behavior.” The company has been collecting user data from its roughly four million monthly users, including permissions to view social media and other digital footprints. Now it’s looking to roll out services to give its partners a way to use it.
“Financial institutions aren’t trusted with that kind of information, so we are bridging the gap,” Chng said, saying GoBear’s use of data helps consumers by getting them access to higher approval rates and preferential terms.
A common challenge for these fintechs is how to work more closely with banks and insurers. Incorporating data into the business model requires partners to integrate their systems, and in some cases, upgrade their own I.T.
“Data requires infrastructure, warehousing, architecting,” said Sandy Lau, GoBear’s head of Hong Kong. “Banks have multiple data centers and they can’t just move it.”
CompareAsia’s Allen says integrating with partners requires them to improve their I.T. stack, as well as for comparison sites to jump through partners’ compliance hoops.
Will this change comparison sites’ revenue models?
For GoBear, the company is categorical: it won’t accept rebates or kickbacks or other inducements from financial service companies to favor a particular product or brand.
Allen says CompareAsia engages with providers on product design, but “We are mostly paid on a sales basis, which leads to a better outcome for users,” although he didn’t rule out special deals with partners.
So far, neither company has achieved the size of Asia’s biggest comparison site, Policybazaar, an Indian company focused on domestic insurance policies: it has over six million customers and annual revenues of $61 million (versus $1.2 million for GoBear, according to Crunchbase).
This may be because their two biggest markets are the heavily banked Hong Kong and Singapore: cities that are wealthy but with small populations, with consumers already tied into brick-and-mortar relationships. The companies are each operating in five other places, but their activities in these emerging markets are far more about education and awareness, with smaller sales volumes (although GoBear says its Thailand execution business is on par).
Both companies’ executives believe the advent of open banking and, in Hong Kong, virtual banking licenses will support their businesses. More online selling will mean a growing need for online sources of independent information…and, they expect, more demand among banks and insurers to reach customers through digital platforms.