Global banks that have a large mortgage business are facing pressure internally and externally to upgrade their operating model to save money, decrease processing times and enhance the customer experience – today it can take more than 60 days to complete a mortgage transaction. The pressure is particularly strong with FinTechs like US online lender Rocket Mortgage and UK digital mortgage broker Trussle creating a completely digital experience for prospective home buyers. Banks, therefore, are exploring everything from mature technologies like Optical Character Recognition (OCR) to more leading edge and high-tech solutions based on blockchain and artificial intelligence. While some of these solutions could dramatically impact day-to-day business for lenders and their brokers and customers, blockchain has the potential to completely transform the entire mortgage financing industry. The financial services industry is all about trust – whether relationship based, reputational, authoritative (legal) or transactional – banking today is built on trust.
The Russian subsidiary of the Austrian lender Raiffeisenbank has run the country's first ever mortgage deal on blockchain. It could be a taste of more to come in the nation. In the transaction, a mortgage contract was issued as an xml document containing all relevant information, including data on the mortgage loan issuer, the borrower, date and place of signing the deal, the total amount of the loan, and the repayment period. The use of blockchain for mortgage loan issuance is set to increase the safety of data storage, cut depository costs, and speed up transactions for both borrower and lender, Raiffeisenbank said in announcing the deal. Normally, after sealing a mortgage deal, the borrower has to visit the bank again to deposit the mortgage contract, while the application of blockchain allows the borrower to do it remotely, also cutting the amount of paper documents.
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Health Insurance is based on similar principles of insurance where the community pools in its risks as well as its resources to face any risk or disease. The Health Insurance sector in India has grown in the past five years. It may not be at par with the world standards where more than 60 percent of the population is covered under Insurance. Currently, the State run employee benefit Insurance (like ECHS, ESI etc) cover about 6 percent of the population and State sponsored Health Schemes (like Arogyashree, MaaYojna, Bhamashah etc.) cover about 25 percent of the population. The private sector Insurance barely covers about 5 percent of the population which includes private sector employees through TPAs and retail insurance. Of the 37 percent of population currently covered under Health Insurance, majority is under State sponsored scheme and the private sector insurance has a long way to go. The Govt. of India envisages 50 percent Indian population covered under Health Insurance by 2025.
You've just bought a designer bag using a credit card. An hour later, you receive a text message on your smartphone from the bank that issued the card: "We've found you a pair of shoes and a dress that match that bag you just bought. Together, they would make the perfect outfit for the Bentley event you noted on Facebook which has a black-and-gold theme. If you buy the shoes and dress with the same credit card in the next seven days, you'll get 10 per cent off." Sounds futuristic - and maybe a tad invasive - but the technology to do all this is already available today.