How Health Insurers Are Using FinTech to Cut Costs

For health insurers, business doesn’t come cheap, which was especially problematic when the industry faced the Covid-19 pandemic. Insurers had to continue funding treatments, tests, and other care services. Adding on to this, there was significant revenue loss without the ability to perform surgeries or offer the other bulk of their services. One example is major American health care provider Humana which saw a loss of nearly $460 million in 2020. 

This was a significant dip from 2019 when the company saw profits of just over $590 million. The fluctuation was due in part to the influx of hospital patients being treated for Covid-19 which lowered the utilization of other care resources by 15%. Not to mention that these companies had to terminate employees and accommodate/navigate a hybrid work environment in the midst of all this.

Making Necessary Changes

The shift made companies realize that they’d have to pivot to keep up with their industry's changes. These changes specifically needed to be focused on administration in areas such as communication and payment methods. This is where FinTech technology came into play; by shifting to electronic payments and digitally corresponding communications between members and providers, the industry was able to cut costs and retain members. 

Insurance companies recognized that digital transformation is necessary to keep up with consumer demands. The particular technology that revolutionized the insurance industry is primarily made possible through ​​the Automated Clearing House network and Virtual Credit Card (ACH/VCC) which eliminate paper records and reduce customer service requests. In effect, this is attractive for members as well as companies who have benefitted from reduced support costs.

At this point the message is clear: a digital landscape allows providers to focus their efforts on the competencies that make their services useful. Though this was inhibited by the constraints of the pandemic, it may have been the cold awakening businesses needed to scale through the next decade. Insurance is a highly competitive market and although the service is not mandated everywhere, it is something that people need and will look in-depth for the best option.

The insurance industry is moving quickly, and again, there will always be a need for this service, but providers need to roll their sleeves up to bring the best product. With advancements like InsurTech, AI, ML, IoT, and other software tools like them, health insurers can operate cheaper and far more efficiently. Here are some examples of how technology is likely to change the industry:

• Customized Options: Product manufacturers and distributors teaming up to embed insurance within products and services (IoT) would allow consumers to find options that support their specific lifestyles.

• Product Flexibility: Coverage that accommodates specific needs for one's lifestyle, wellness, or current life stage and that is event-driven, time-flexible, adjustable, and modular. It is likely we could see a dominance in technology that takes this data into account when developing coverage plans.

• Automated Underwriting: AI and technological algorithms individualize pricing options based on the risk that potential customers carry.

• EZ Value Options: Taking into account the shopping habits of consumers in new markets, those who offer products that are flexible in terms of timeline, and who do not lose sight of underwriting (to weigh risk) will be successful in this market. 

AI and the machines in its technological hemisphere are changing the insurance industry from underwriting to distribution to pricing and claims. After seeing the beneficial changes InsurTech brought to the industry, companies are using these outlined methods among others to make their operation run effectively for themselves and their clients. 

This technology puts consumers in the driver's seat of their healthcare and well-being. For companies, this makes the sales process easier as they can understand their clients better. It’s made connecting with consumers easier which led to over $2.7 billion generated in revenue for the insurance industry during 2021 using AI. That number is expected to reach around $46 billion in the next decade.

Reasons Behind the Growth

Insurance companies continually investing in AI and Machine Learning dramatically increases collaboration between solution companies and insurers. Additionally, insurance services looking for personalized solutions contribute significantly to the global expansion of the solutions development market. 

Common worries about limits on the market stem from high usage costs and talent shortage. However, this risk is mitigated with initiatives from the government and surging investments which make the market highly lucrative and sustainable long term. 

The Takeaway

Finding solutions that serve the best interests of your business is not an inducement but a requirement for a software company to earn business. The technology serving the FinTech industry isn’t exclusive and this is something insurers have tapped into. We can expect to see other industries following the same embracement of AI & Machine Learning so long as the right solutions are there to serve them.

Written By Ben Brown

—

ISU Corp is an award winning software development company, with over 17 years of experience in multiple industries, providing cost effective custom software development, technology management, and IT outsourcing.

Our unique owners mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.

Learning to Code For Beginners: Tips From Professional Software Developers

When you hear the term “coding,” you likely correlate it to an image of a programmer with headphones on in a dark room typing their fingers to the bone. To someone who isn’t familiar with the process, this may make coding seem like a robotic task consisting of nothing but numbers and letters. There’s a lot more to it than typing colourful lines on a black screen; the process itself is not for the fainthearted. Everyone interested in technology should at least have an understanding of coding, especially as society moves to a dominantly digital consumer landscape. 

Coding in its most basic form can be defined as people communicating with and teaching computers how to function. When a developer goes into the system, they use code to instruct what actions the computer and other relevant hardware must perform. The apps, websites, and technology you use daily are brought to life through coding languages and frameworks. As technology becomes more relevant in people's everyday lives, the need for programmers grows.

Today, over 50% of jobs require skills in technology which has placed coding in high demand among those skills. We expect that number to reach nearly 80% in the next decade. This will trigger the vast majority of businesses to rethink their digital landscape and search for talent that is keeping up with/exceeding the demands of today.

So now that we’ve established what coding is, let's go into the specifics of what it takes to adopt the practice as a complete beginner:

Mindset

Coding is a problem-solving task that not only challenges but requires you to use critical and logical thinking. You have to see problems from a different perspective and then break that problem down into digestible tasks (Examples: Make a flowchart or divide it into sub-problems). In forming those tasks, the programmer is observing the situation and uses their knowledge of languages and frameworks to find a solution for each. 

The code you're writing is meant to serve a purpose, this purpose needs to be in the front of your mind the whole time so you understand not only what you're doing but why you’re doing it. This will mean keeping a calm and collected attitude as you navigate the programming process. Essentially, coders need to understand that every problem has a solution and they have to do whatever it takes to find it.

Learn one language

To understand coding, it will be useful to master one coding language to the best of your ability. Some examples would typically be Java, Python, C, or Ruby as your best starting points. Aside from being among the most commonly used, they are easy to learn. Once you know one language, there will be carry-over concepts and knowledge that will make it easy to learn others. Additionally, it’s best to have one language that you’re more proficient with as your go-to since you’ll likely use it often.

Coding doesn’t require you to be a genius computer scientist. If you are a serial problem-solver, then you can learn the rest. One tool that will be a great resource is Harvard University’s free introductory to computer science course (CS50) that all first-year computer science students take. In this course, they teach you the basics of coding such as Algorithms, Data Structures, CSS, Python, JavaScript, and more. As you learn the fundamentals, you’ll move to execution, leading us to the next point.

Identify the purpose of your coding

When you build an understanding of coding principles and feel ready to put them into action, the next step is identifying your “why”. What needs are your solutions going to fill? We use coding to find ways of bringing concepts to life. Who in the 1970s would’ve thought you could send a text or FaceTime someone? These big changes in technology start with small advancements which will be a beginner's best friend.

Start coding something small such as crafting a simple message like “what is your name?” There are numerous methods to do even this specific task such as reverse alphabet letter correlation, manipulating the orientation of letters, or even using symbols to represent letters.

When one has built a solid understanding of software methodology and embraced a coder's mindset, one will see these simple tasks in different ways. It starts with an idea that becomes a vision. Essentially, when coding, you want to identify and try to solve your problem before you begin using algorithms. Seeing the solution and having it clear in your mind will stick with you as you find ways to fill in the gaps. 

Get your hands dirty

Branching off of the last point, no experience will compare to what a great team can teach you. The coding community is very welcoming and will not refrain from sharing their knowledge and advice with a beginner. As you network within the settings where you are learning, find out if there are hackathons you can participate in. A hackathon is a big coding project crammed typically into a 24-hour window. Beginner-friendly hackathon events use basic coding languages which would be a great learning experience. 

In addition to building a network and becoming active as a developer, it will be helpful to look into pair coding. This concept is rather self-explanatory as it is two programmers at one computer. There is the old saying “two minds are better than one” which is relevant in software development teams and why they use pair programming as an agile technique. But in a strictly learning-oriented manner, you will learn more from others than from tutorials or books. 

Challenges to expect

Now, while this section has depicted learning to code as a bed of roses, there are several challenges you can expect to encounter on your journey. In this section, we’ve outlined 5 key areas to look out for:

• Not knowing what to focus on: There are so many aspects that go into coding which can make a developer's road map seem chaotic. As a beginner, this can be overwhelming and, in some cases, discouraging. However, a key characteristic of a good programmer is acknowledging and accepting that there is a lot you have to do to succeed. 

• Can’t understand what the user wants: When working as part of a team and faced with an outsourced task, you may run into difficulty understanding the user's intent. Programmers specifically run into this issue since they are not typically the ones sitting down with the client. Project managers make it less stressful to update software with scrum/agile approaches. However, this can only get you so far as a programmer when there is minimal interaction with the end user.

• Lack of communication: When you’re newly working as part of a team and haven’t established relationships with others, you may be reluctant to ask questions or coordinate with team members. When working in IT, this can be a significant downfall since communication needs to be a consistent force within the team.

• The time it takes: Becoming a developer that someone would want to hire (whether as part of a team or to handle an outsourced project) takes a significant amount of practice as well as establishing credibility in your craft. Everyone wants the shortcut, but just like anything worthwhile, coding takes time. You can’t learn these concepts in a week. Beginners need to understand the information and see it in action while acknowledging that there will be failures in the process.

• Panic after failure: Being a great software developer means you consistently interact with problems. As you implement your attempt to solve these problems, you will not have a 100% success rate, which means things will go wrong. Finding out what went wrong is called “debugging” which is a process that scans for errors to determine their cause. Though sometimes it can be hard to admit mistakes, having this form of debriefing will make you better. Instead of letting emotions get in the way, finding the source of what went wrong and learning from that will be much more valuable.

The Takeaway

At the root of all these challenges and the learning processes remain the focal point of having the will to not only succeed but use technology to create an experience. Google wouldn’t be the platform we utilize every day without its codebase, and even that started out as a concept. If you take your time to learn the fundamentals, you will have this as a competitive advantage when working with technology.

Written By Ben Brown

—

ISU Corp is an award winning software development company, with over 17 years of experience in multiple industries, providing cost effective custom software development, technology management, and IT outsourcing.

Our unique owners mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.

This is How Software Developers Build a FinTech App

Between 2020 and 2030, the global FinTech market value is expected to grow sixfold from $110 billion to nearly $700 billion. In this section, we’re shifting the focus from the services offered to the technology that provides an application to deliver them. We’ll start with the basic understanding that putting together a FinTech app is not an overnight process. Many components go into its construction to ensure both the quality and security of back-end data processing and front-end user experience. 

The IT technologies used in the development of FinTech services are what have pushed the industry to succeed. When consumers experience the convenience aspect of FinTech, the front-end functions are a mere puppet. The digital mechanics behind those functions pull the strings and interconnect to provide that convenience. These mechanics and their intended results are what we’re going to cover in the following sections.

Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML are two technologies that are dominantly used in the development of FinTech applications. The main reason is because of their ability to assist with processing large quantities of data. This data is collected from both consumers and global trends which, when processed, determine the service that is delivered. Here are some of the results from these processes:

Security and Identifying fraud: FinTech platforms work while processing a very high volume of data 24/7. This raises the risk of criminal activity which could easily slip by traditional processing methods that lack the resources of AI and ML. With these modern advancements, they can trace and detect patterns in the data, allowing them to flag a cyber-criminal when irregular data is recognized. Research has shown that this technology can reduce fraud by 70% with a 90% accuracy rate in detection.

Options: Users of FinTech apps have access to insights that will give them the advice to manage their finances. This is broken down into easy-to-understand visuals such as pie charts, monthly spending tracked on a progress bar, and organizing payments to be made. Users will then get insights based on this data for how to put themselves in a more beneficial financial position.

Managing Assets: As stated previously, AI and ML stay in tune with global financial trends which they use to make predictions for investment opportunities. Users have access to this info and can choose to make investment decisions based on the advice provided.

Personalizing Customer Support: AI and ML data tracking collects user information which benefits the platform in tending to the needs of consumers. This ties back into the technology that keeps up with user habits. Ultimately, it makes customer support much easier and keeps access consistent through automated bots. 

Microservices

In software development, microservice architectures are a trend that developers have recently been utilizing in their work. Microservices are large-scale applications that are condensed into smaller autonomous blocks. This makes it simple for developers to work on areas of the system without disrupting the entire application. When it comes to interfaces and operations in FinTech, it is necessary to ensure users have access to the latest and greatest.

Here are some specific areas of coverage:

Agility within the application: You can add or remove as well as innovate any solution to keep up with changes in the market.

Highly reliable: When several components are operating autonomously within an application, it reduces the risk of system failure. When one component goes down, everything else continues running and the owner is notified that it needs to be fixed.

Transferable between systems: Once a microservice is developed, the components of the application it was developed for are reusable for various FinTech solutions. This is because a microservice architecture can connect to other systems through API. The API will act as the intermediary that allows the applications to communicate.

Increased development speed: A software developer would not have to start from scratch when building a microservice. Going back to transferability, there are unique aspects of microservices that may not be used much but can be added to developing solutions. Developers can create a minimum viable product (MVP) with these microservices and adjust the system based on how users react to it. 

Blockchain

The central spot for storing data for FinTech is in the Blockchain. This technology has risen to popularity in recent years for its ability to send secure transactions and utilize cryptocurrency instead of fiat money (money made legal tender by the government). The decentralized and encrypted structure of the Blockchain makes the management of transactions safe and highly efficient. When AI meets the Blockchain in an application, it allows the processing and supervision of data to operate easier and smoother in addition to avoiding potential mistakes. Companies have turned to this pairing for these specific reasons among others, and FinTech is no exception to the shift.

Here are some ways FinTech uses Blockchain to its advantage:

Easily pay peer-to-peer (P2P): This can be compared to Whatsapp’s encrypted messaging system that allows users to send messages around the world instantaneously. Blockchain processes payments similarly, eliminating the need for any middleman services in the process. 

Digital ID: To eliminate fraud in the Blockchain network, every user needs to validate their identity, like most other platforms. As soon as they’re registered in the system, tracking their activity is very simple and tracked regularly.

Cryptocurrency Exchange: Applications like Coinbase or Crypto.com use Blockchain to allow users to trade cryptocurrency assets.

Critical Components of a FinTech App

Every FinTech app is going to serve a different purpose. You can be a digital payment service, online banking, InsurTech, online lending, or even a crypto wallet or platform. Whichever service you’re fulfilling, you need to assess what aspects are critical for your application. To get you started, here are some sought-after features often used in FinTech apps:

• Visual data display: Breaking down information regarding income, expenses, and transactions.

• Flexible UI: Your application should be easy to navigate and understand, as well as have a way to engage users. For example, the crypto exchange application Coinbase uses a “learn and earn” feature where users are taught and quizzed on crypto assets in exchange for virtual currency.

• Gateway for payments: This basic feature allows users to make money transfers and payments. This is commonly the main selling point to get users to download a FinTech app.

• Virtual assistance: Users are increasingly interacting with virtual assistance (especially those that use a voice) for the unique experience it offers. Additionally, applications need a front-facing support system to help customers.

• Security: FinTech as an ecosystem is locked down and secure, yet one of the areas still in need of innovation is the security of FinTech apps. Additionally, studies have found that hackers attempt to break into computers connected to the internet every 39 seconds. 

So now that we’ve covered the details of what your FinTech app should consider in its development, what's left is how to do it. We’re going to break this down into a three-step process:

Step One: Study your market

Determine whether or not there is a need for your service. To do this, you’ll start by finding services similar to yours and evaluate how well they’re doing. What could you do better? Also, how are users interacting with these services? You want to determine if there are limits on the existing services and/or if your vision is something people need.

Step Two: Determine your project's logistics

Once you’ve analyzed the market you want to enter, you will have an understanding of who will use your application and what components you will need to generate appeal. This will then lead to evaluating the timeline and budget needed. Of course, both timeline and budget will vary depending on the technology stack you go with which will be determined after speaking with your software developers.

Step Three: Build your team

A FinTech application is highly complex and will require a team of experienced developers with the tools for the task. Typically, outsourcing this kind of development is a company's best bet when they don’t have an in-house team. Additionally, outsourcing would help save on your budget as you’re only paying for the results that the software development team produces. It’s ultimately going to come down to finding a team you’re comfortable with and that understands your vision and who can then make that vision reality. 

Finally

When putting together a FinTech application, the process is going to be subjective based on your business's goals. It’s going to be a bit of trial and error especially if you take it on in-house, but that will provide answers as you go. The great thing about developing a FinTech app is that there is so much variety in terms of how you offer your service and how you innovate it. With the right software, your application can scale and fulfill the needs of millions of users.

Written By Ben Brown

—

ISU Corp is an award winning software development company, with over 17 years of experience in multiple industries, providing cost effective custom software development, technology management, and IT outsourcing.

Our unique owners mindset reduces development costs and fast-tracks timelines. We help craft the specifications of your project based on your company's needs, to produce the best ROI. Find out why startups, all the way to fortune 500 companies like General Electric, Heinz, and many others have trusted us with their projects. Contact us here.