Dear reader,

from Insight to Impact - that is our motto. Please allow us to share with you our five top insights of the week. We wish you a wonderful weekend!

#1 - Insurers fall behind banks in effective AI adoption

Insurers are falling behind banks with respect to the adoption of the most effective AI technologies - such as natural language processing, image analysis, robotic process automation, predictive analysis, and machine learning. These five technologies have the potential to significantly drive operational efficiencies and boost the customer experience. As such, leading insurance companies are set to accelerate the use of these applications to realize the associated benefits. Lagging insurance companies may, as a result, fall even further behind. 

#2 - Two primary neobanking business models

Neobanks are digital-only banks with industry-leading capabilities that don't operate physical branches or rely on legacy systems. As such, neobanking business models can essentially be divided into two categories: 1) full-stack neobanks, which have a banking license and control their front and back ends, and 2) front-end-focused neobanks, which don't have banking licenses and only control the customer interface.

#3 - As competition grows, neobanks could enhance their features 

The neobanking business models tend to offer several features that have sent user numbers (and in many cases expenses) through the roof. Most important among these are low or even fee-free offerings. Indeed, the majority of neobanks offer a free basic account — with no monthly expenses or account maintenance fees — which is a major draw to users but can also represent a big hit to their balance sheets. 

As competition for users heats up, neobanks may be forced to roll out increasingly extravagant features to stand out to users. 

#4 - Path to neobank profitability

Neobanks have several operational advantages that help minimize losses — but only to an extent. For example, they lack expensive legacy back-end systems or legacy channels. This allows them to have better operational efficiency (i.e. lower cost-to-income ratios). Moreover, they have lower distribution and customer acquisition costs, and their modern backend systems allow them to better use APIs to layer third-party services.

Looking ahead, these foundational advantages could help neobanks become profitable at scale. To grow at scale, three further factors are set to help: 1) building on the freemium pricing strategy, 2) multilayered premium subscriptions, and 3) targeting niche demographics (e.g. SMBs, women, etc.)

#5 - The joy of being wrong - activating the power of intellectual humility

Intellectual humility is a super power. It is the willingness to recognise that what one thinks and believes might be wrong. It is also a learned skill - and it can enrich one's life! 

In this exceptional short video, Dank Pink poses four questions to test whether one is really willing to challenge one's own assumptions and expose oneself to differing perspectives. These questions won’t bring the current complex state of the world under control. But maybe they’ll help a little. 
Intellectual humility is a super power  - the willingness to recognise that what one thinks may be wrong. 
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Stay healthy, stay inspired, and have a weekend at home!
Your RFS team.
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