Talking InsurTech with Dr. Moritz Finkelnburg

This March, specifically on the 13-14th, Goethe Business School (GBS) organizes the Global InsurTech Roadshow in Frankfurt together with InsurTech Asia from Singapore. The roadshow combines pitch-sessions and discussion rounds with international early-stage InsurTechs. One of the main organizers of the event is Dr. Moritz Finkelnburg – Academic Director for Insurance at GBS. Also, he manages the insurance programs as part of the China Executive Education Center. With 20 years of management and board experience in leading insurance companies he is a specialist in sales and non-life-insurance as well as profit-oriented portfolio management. We are thrilled that Dr. Finkelnburg gave us an interview where he shared his insurance industry’s experience, thoughts on innovation and why the Global InsurTech Roadshow is an event that is not to be missed.

1.  How did the InsureTech eco-system change in the last couple of years?

The InsurTech era started with tech-oriented small companies, mainly focusing on app and technical service developments. Since 2015, we noticed the market-entry of digital brokers such as Knip or Clark, offering a fresh image, high customer service and easy accessibility. Last year the first digital insurers appeared and will be completed this year. They are offering own products and services to the customers.

2.  Who is behind the Global InsurTech Roadshow (GIR)? How did the idea appear? 

The driver of this idea are George Kesselman, the founder of InsurTech Asia and me. One day last year when George was visiting me here in Frankfurt he told me about a roadshow he was organizing in 5 Asian countries. The idea to organize a similar conference in Europe was simple and caught both of us. And the rest is simple…

3.  What mainly differentiates GIR amongst all the other existing InsureTech conferences/events? 

On one side we are non-commercial, which makes a huge difference. We are able to offer much more competitive prices and decided not to charge any startup who wants to pitch during our conference. In addition, I think we are much more familiar or intimate. You don’t need a super-professional but somehow cold environment to feel good, make great contacts and have lots of fun.

4.  What your attendees will take away from the GIR event? 

They will definitely have seen the newest trends and startups in the InsurTech-ecosystem most of them have never been seen somewhere before and they will have made a lot of new contacts which are relevant for their specific kind of business.

 5.  According to you, where (in the insurance business) can technology help the most? 

In my eyes, digitization will mostly help to improve the value chain of traditional insurers becoming more efficient, quicker, more service oriented and with less errors.

6.  How important is innovation, namely software implementation for the industry? 

Today’s insurer’s software landscape is extremely complex. Innovations need years due to long implementation scenarios. Every approach to solve or reduce this complexity will help. 

7.  Where do you see the industry heading and what should businesses venture onto, in order to be in the game? 

Digital brokers and insurers are fantastic and true innovation-drivers. However, they will have extremely hard times ahead. If they survive 5 years and are able build up a significant portfolio they will thrive. Otherwise, they will be killed by their customer acquisition cost. The enablers however will have a good chance to develop if they can help traditional insurers to improve their value chain.

One of our goals at DAS Solutions is empowering and supporting the industry as a whole, and that’s why we are so excited to be part of #GIR2018. What is clear to us is that GIR is as much about industry’s insights as it is about harnessing a community of insurers who are eager for change, who understand that technology is the future and there is no time to wonder. 

If you will be attending the event as well, or just around the block, let us, specifically Daria know we would love to meet you and have a chat. 

Moving forward,
DAS Solutions Team. 

Use Machine Learning to Produce Higher Value

Facebook uses machine learning (ML) for face recognition, Apple uses it to make Siri sound more human, and Google minimizes energy use at data centers with the help of ML. Machine learning is a trendy element of artificial intelligence that is being successfully used in many industries. Regardless of the industry your business operates in, consider using ML to improve productivity and receive higher ROI.

 

What is machine learning?

In traditional computer science we need to explain the task we wish to accomplish to the computer. For example, if we plan on creating a tool that calculates salaries, then we need to write a program that translates to the computer how to perform each operation in a language that it understands. This limitation hinders innovation because the machine cannot find and fix problems on its own, which can require much more energy from a development team.

Machine learning could simplify this process by a lot, as it involves “teaching” computers to learn on their own. This is done via an algorithm which educates computers to perform a task without having the developer explicitly code “instructions” in the program. In the supervised learning technique, the processor studies previous examples in order to run a machine learning algorithm. The more data is processed, the more accurate the algorithm becomes.

 

Case studies

The Royal Bank of Scotland has launched Luvo earlier this year. It is a bot that can answer customers’ questions and perform money transfers. It uses machine learning to provide customers with continuously better responses over time. McKinsey points out that some European banks that use machine learning techniques saw a 10% increase in sales of new products, 20% increase in cash collections, and a 20% decline in churn.

Dataminr transforms tweets into actionable signals for stock traders. It classifies them based on location, relevancy, and ranks them by their levels of urgency. An alert sent to a trader even a couple of minutes earlier can result in a significant profit.

SailThru learns customers’ interests and purchase behaviors. It predicts when a customer will make a purchase. For its client, The Clymb, it increased the total email revenue by 71%. It also collected data from all digital channels. This predicted top buyers’ next actions, and identified marketing trends.

A startup from London helps its customers generate reports. The company’s technology can scan text documents and establish relationships between concepts. It has increased workers’ productivity by 25% and saved 40 hours of engineers’ work per month.

Machine learning is not limited to the aforementioned case studies. It can be used in fraud detection, cybersecurity, search, manufacturing, medicine, robotics, personalization, and other industries. To implement machine learning technologies, one needs a strategy and a deep understanding of a company’s KPI’s.

If you plan to use ML in your business, define your criteria of success. It is not enough to know what your customers are about to do; the most important thing is to understand some of the reasons behind their behavior.

 

Top Features of an Effective Claims Management System

Claims are a critical part of the insurance business. Even if your insurance company is not as big as Axa or Allianz, you need to have an efficient claims management system. Clients’ mindset and expectations are different from what they were 10 years ago. A recent survey called Insurance 2020: The digital prize — taking customer connections to a new level  has brought to light some fascinating facts:

  1. 71% of consumers made an online research before buying an insurance product.
  2. 68% of respondents were willing to download and use an app from their insurer in order to access services.
  3. 50% (!) stated their readiness to additional personal and lifestyle information so they can get the best deal for insurance services.

Insurance must thus move quickly to become more customer-centric and to improve customer experience. For successful communication, your customers and team members need to have access to an intuitive claims management system. In this post, we’d like to highlight some features that would be welcomed by both your customers and your staff.

Features of a claims management system appealing to customers:

  • A simple submission process from any device

Users need to have the possibility to complete a short and simple form using their smartphone or tablet. Claimants’ basic info, such as first name and last name (as well as other contact information) should be  filled in automatically when the customer decides to submit a claim. This should be easy to do since the info is already in the carrier’s database. In addition, the claims process will be easier if customers understand intuitively how to attach photos of receipts or invoices to their claim.

  • Tracking claims progress

Claimants need to be able to track the status and decision of consultants regarding their claim, further steps they have to take, as well as the final outcome.

  • All documents in customer’s pocket

When the customer uses their insurer’s app, they need to store their paperwork such as copies of their ID, driving license and policy documents on their application.

  • Online claims payments

Clients can save a lot of time if the transaction of claims can be done online. It also adds transparency to the process because both the customer and the consultant have access to the final decision of the claim.

  • Simplicity and security

For fast and easy access one can log in with a PIN code that is easy to remember. Any claims information entered must not be lost until submitted. At the same time all personal data must be secured via encryption. It is also useful if most of your app’s features are available even if the user is offline.

Your team will thank you for the following claims management system’s features:

  • Reminder function

This is a useful feature because it enables a consultant to stay on top of the tasks that require a timely response. The reminder feature facilitates the service provided by the insurance company.

  • Handling different types of contracts

It is preferred that the claims management system can handle various types of standard contracts. Furthermore, as the clients and the consultants might introduce amendments to the conditions of the standard form of contract it is critical that the system is able to deal with changes.

  • Keeping documentation up-to-date

Some claims are more challenging to prepare because more documentation is required. Thus claims managers need to have a system to help them keep an up-to-date documentation, prepare the claims, and prevent them from losing relevant documents.

  • Extended search capabilities

The agent needs to have the possibility to search virtually any data within the claim, including claimant, address, policy number, phone number, check number, etc. This function makes searching easier.

  • Centralized database

If you have several offices across the country it is better to have a centralized database so that the management can have access to the files, templates for claims and any other information. A reporting tool will help them analyze the outcome and status of claims.

So here we are! Ten features that a claims management system should have to improve your company’s performance. All in all, the app has to address your customers’ and your employee’s needs, which is why it is so important to choose a system with a user-friendly interface that fits well with your specific needs.

Telecom Solutions

You Need to Know about These Innovative Telecom Solutions

Telecom network operators have always relied on technology but have often taken a conservative approach, valuing stability from established systems above improvements through innovation. Faced with a rising tide of user expectations from the flood of OTT services, MNOs have now shifted their priority to streamlining their operations, improving the customer experience with real-time, agile telecom solutions.

To stay competitive, network owners and not only, will look beyond their traditional technology suppliers and seek out innovation.

Here are some innovative telecom solutions and technologies you need to be aware of:

SDN Solutions

SDN (software-defined networking) is a new architecture for data networks in which the emphasis is shifted from hardware to software. Being able to control networks through software allows for the streamlining of many IT tasks. Speed and automation are thus relevant for the development of IoT and cloud networks.

According to CM Research, SDN technology is disruptive, because the network can be controlled by more players than ever before.

A closer look at SDN solutions reveals that there are open source as well as commercial solutions available on the market. NOX, POX, OpenDaylight are free, while Big Data Fabric, Virtual Application Network, and Contrail can be purchased.

5G networks

The emergence of 5G (fifth generation mobile networks) is around the corner. 5G will provide faster speeds, greater coverage, as well as less latency in comparison with 4G networks. This is essential for the connected things of the future, such as VR, holograms, driverless cars, or drones.

Even though the industry consensus holds that 5G technologies will become publicly available by 2020, companies such as Verizon and Ericsson have announced that field trials will be run in 2016.

SK Telecom (the first to roll out 4G) has completed a successful 5G system field test this April. Park Jin-hyo, who is the senior vice president and head of SK Telecom’s network tech, said that the company plans to lead the development of 5G technologies and services and be the first one to commercialize it.

Huawei is not far behind. This May they have completed the first phase of key 5G technology tests as a part of field trials.

Solutions for smart cities

New opportunities for growth can be found in the development of solutions for smart cities. There is a municipal demand to operate cities more effectively by implementing platforms that allow to manage and monitor city lighting or video surveillance systems.

Citizens wish to have technologies that make their lives easier at their fingertips. As consumers, they inspire companies to create innovative telecom solutions that, for example, allow payment for parking or public transportation using one’s smartphone.

A UK based company offers an app that lets its users pay for the parking and it also allows to extend the parking duration remotely.

An innovative telecom solution allows commuters in Singapore to pay for the bus and train tickets with their phone. The technology enables data transmission between a mobile device and a contactless card reader.

To enjoy the service, customers have to purchase NFC (Near Field Communication) SIM cards and turn on their devices’ NFC function to make payments or top-ups.

This telecom solution allows to get rid of both cash and travel cards when paying for the transportation.

Mobile Money telecom solutions

GMCS (Global Mobile Consumer Survey) has demonstrated that from 2014 to 2015 mPayment (mobile payment) technology has increased in 4 times. eMarketer estimated that the total value of mobile payment transactions will grow 210% in the US in 2016. This happens thanks to the support from customers, governments and central banks.

Mobile money telecom solutions can be used by operators for a range of mobile money services, such as money transfers, international remittances and mobile payments.  Business of all types, from coffee shops to digital stores are implementing point-of-sale systems that allow customers to pay using mobile devices, therefore it is anticipated that the mPayment method will soon be adopted by many users around the world.

Innovative telecom solutions are going to predetermine the direction of the development of the entire industry. Companies that invest in the capabilities, technologies and relationships to foster changes now, will have an advantage for many years to come.

Insurtech is Going to Energize the Insurance Industry

Insurtech will help the insurance industry to adapt to the digital world. The transformations taking place in the financial, mobile, IT, and other sectors are leaving insurance lagging behind. But insurance companies realize that IT requires more attention. A report found that insurance companies’ investment in insurtech, and replacing or improving information technologies generally, was expected to grow by 5 percent in 2015. That is noticeable compared to an average 3 percent in 2014 and 2 percent in 2013.

It has become harder to define the insurance policy with the appearance of drones, driverless cars, and IoT devices. Insurance is affected by the disruption in the hospitality business as well. Have you ever thought about of what gets covered by insurance if something happens in an apartment rented using Airbnb? What about what happens while in a car ordered on Uber?

When the lines of coverage are blurred, what is left is a grey area of confusion or a gap in protection, which can have drastic effects on customers. The good news is that this ambiguity can be relieved with the help of technology.

Industry Challenges

  • Regulation

Insurance companies are heavily regulated, which means that it is difficult and costly for a young company to comply with all government policies.

  • Process

The process of getting insurance is time consuming and often involves a lot of red tape. This can discourage new customers from getting a policy in the first place.

  • Agents

If people are able to get their insurance online without a broker’s help, this may make agents nervous. But technology can actually help brokers in their jobs, and increase their bottom line as well.

  • Brand recognition

When it comes to life or property, people tend to trust companies with a good reputation, therefore it is hard to convince someone to entrust their belongings to a company they don’t know.

What can be changed?

  • Re-connect with customers

The relationship with customers has to be rebuilt. Clients have to see insurance agents as trusted advisors who are helping out with the most precious assets, such as life, family and wealth. The first step is to start talking to your customers in an accessible way and within a space where they are already the most comfortable. With the changes in technology, people communicate differently, and have a very short attention span. Adjust to their lifestyle by, for instance, sending them short text messages instead of calling to remind them about renewing a policy.

  • Re-build the system

Innovation is brought on by small things, even the most basic customer engagement must to be improved. Build channels to communicate directly with your customers. Focus on designing applications that revolve around communication, transparency, and simplicity. According to a study,computerization and online transactions are one of the most important factors when customers choose an insurance company.

At DAS Solutions we developed insurtech products that allow brokers and producers to complete insurance requests and sell insurance products to the client directly, while all operations between them and the insurance company are completed seamlessly by the software. This includes estimate generation, client ID validation, and automatic document generation based on the insurance product purchased. Get in touch to have a discussion about how we can optimize your business processes with a custom software solution.

Insurtech Perspective

Many big insurance companies are investing in IoT startups. With customer permission, devices such as smartphones, smart watches, drones or digital home thermostats which record data could be collected and analyzed by insurers. The adoption of new technologies might enable insurers to start influencing their customers’ behavior, for example by suggesting they go to the gym or indicating not to drive in certain conditions.

Insurtech is going to help the insurance industry grow further. For that brokers need to tackle existing issues head on and start using emerging tools to their advantage. By communicating with clients in ways that meet their needs and expectations, insurance companies will build loyalty among consumers.

Blockchain business

How to Make Money in the Blockchain Business?

Blockchain business is getting more attention than bitcoin and that is because blockchain can be used in a multitude of areas. By being an early adopter of the technology one can make good money out of the blockchain business.

What is blockchain?

Blockchain is a shared database technology – a digital ledger of transactions, agreements, or contracts. The ledger is not stored in one place, on the contrary, it is stored on a network made up of thousands of nodes (computers) from around the world. Blockchain keeps track of every transaction, which gets recorded in “blocks”. These blocks provide proof of who owns what at any given point in time. Each node on the network must approve a transaction before it is recorded in a new block and added to all previous blocks, forming a “chain” of computer code. If one node does not approve the transaction, it does not take place. This makes it virtually impossible for anyone to interfere with the system unnoticed. Security makes the blockchain so appealing for many businesses.

Since all transactions are seen by everyone in the network, transparency is another appealing feature of blockchain. Blockchain allows for faster transactions that are not processed manually, which leads to efficiency and thus lower costs.

No wonder why banks such as Barclays, J.P. Morgan, UBS, Citi, Societe Generale and others are investing in the development of decentralized ledgers.

Where can it be used?

As it was originally designed for bitcoin, blockchain can be primarily used in the financial sector to make money transfers. The technology is used in trading platforms. For example, platform is based on the blockchain.

It is used by companies in the file sharing industry. Storj is a blockchain based cloud storage where one can rent a drive for a competitive price.

The health industry can benefit as well. Pharmaceutical companies could tag drugs with identification numbers on a blockchain, to track goods through the supply chain and cut theft and counterfeiting. Block Verify has recently completed the first stage of a pilot programme to test its system on pharmaceuticals produced by a Swiss manufacturer.

Painters and interpreters can use the technology to verify art pieces and to prevent piracy.

More importantly, distributed ledgers can be used by governmental institutions. The Estonian government is using a form of blockchain technology for the system known as Keyless Signature Infrastructure (KSI). Its aim is to provide digital signature-based authentication for electronic data. It allows citizens to verify their records in governmental databases. KSI has helped launch the E-business register and e-tax, which have contributed to the reduction of queues and stress levels, and to the acceleration and automation of processes.

These examples demonstrate how blockchain technology can be used efficiently on a large scale.

Who can earn money out of a blockchain business and how?

There are currently five categories of people who are making money for working in the blockchain business:

  1. Software developers and architects who specialize in cryptocurrencies and decentralized ledgers.
  2. Blockchain experts who offer their consultancy services to businesses.
  3. Project/Product managers who can develop and execute a distributed ledger technology strategy and coordinate the resources.
  4. Fintech content creators who have a deep understanding of the industry and can shed light on the current situation and its probable evolution.
  5. Blockchain interns who are learning about the field are the future of tomorrow’s blockchain business.

Considering that big players in the financial market are interested in the blockchain technology, it is going to mature in the future. Once institutions reach a point where they have created proprietary decentralized ledgers they will want to connect with other organizations. This creates new business opportunities to design connecting solutions among institutions that are not using the same distributed ledger. The blockchain business will need more professionals who can facilitate its development, because it has a tremendous potential to spread to a wide range of industries.

Did we miss anything? Do you have other ideas on how to use blockchain for profit?

OTT Services

OTT Services – Friends or Foes?

Over The Top (OTT) services allow us to send messages, make calls, or stream video over data networks (Skype, Viber, or Whatsapp are relevant examples of such services). Their popularity is a call to action for mobile operators who are suffering from revenue losses.

OTT services have become extremely widespread thanks to lower costs, overall positive user experience (even though sometimes a VoIP connection is far from perfect) and platform independence. According to Statistia, Viber had 711 million users in December of 2015. Whatsapp had reached 1 billion users by February of 2016, and 300 million people used Skype in 2015. No wonder major MNOs are trying to introduce regulations and keep up with the competition.

Even though many studies have shown that restrictions on OTT services are bad for business, back in 2012 AT&T had offered FaceTime only as an added benefit of their data plans in the US. If the customer did not have the data bundle, they could use FaceTime solely over Wi-Fi.

South Africa is another country which is now considering imposing restrictions that would slow down innovation in this field. The two largest South African MNOs have called for regulations for OTT providers such as Skype and Whatsapp. Cell C, the third largest MNO from that country, has chosen to collaborate with OTT operators instead, and is now offering free access to social network services and a range of other websites.

Not so long ago European operators such as Orange and Deutsche Telecom have called for a fair regulatory environment for all services. They pointed that the increased competition from services similar to Viber is a reason for easing up the regulatory burden on operators. The decision regarding the reform will be taken by the European Commission later this year.

According to research conducted by Technotree, mobile operators predict an increase of data usage among subscribers. In order to benefit from this, MNOs need to make sure that data remains in their network, therefore they need to introduce new services. Thus, far-sighted MNOs are either establishing partnerships with OTT providers or are launching their own OTT services.

Over in The UAE, Etisalat launched its own eLife on app, allowing customers to watch more than 200 TV channels, movies and series on the go. The Spanish Telefonica launched a Tu Go app in the O2 UK network. The application allows customers to make calls from one’s desktop and be charged by O2 on the same bill as the cell subscription. This elegantly solves the problem of having too many invoices for using communication services.

Nevertheless, the approach of creating OTT services in-house has some disadvantages. Here are some of them:

  • Usually the apps are available only for existing subscribers, thus it creates no opportunities for acquiring new customers. In other words, to increase the amount of users operators have to work on increasing their subscriber base.
  • Considering the bureaucracy within MNOs,it takes  longer to develop, design, launch and market the product
  • It is virtually impossible to convince a Viber user to switch to a new application with the same functionality.

The second option is to start partnerships with OTT providers which is a far-reaching strategy. MNOs can benefit from collaboration by using OTT brands to sell more data bundles, charging for subscriptions or advertising their services and initiatives.

OTT providers don’t own any infrastructure. Operators have invested heavily in building the infrastructure and they own one of the most valuable assets – customers’ mobile phone numbers, which are needed for seamless communication between the telecom network and the internet. In other words, OTT providers and telecoms both have a lot to gain from a productive collaboration.

Operators must be responsive and adaptable to market changes in order to keep creating value. Partnering with a small and agile tech startup could be the perfect boost for any MNO or MVNO that is looking for a fresh take on offering their clients a valuable OTT service.

NEM Assembly

DAS Solutions is Attending the NEM Assembly

The NEM Assembly is taking place at the Crowne Plaza in Brussels today. The aim of the event is to share the updates and get feedback from the participants of the General Assembly on ongoing projects such as I2C PPP.

The goal of the I2C PPP project is to strengthen European leadership in various areas, for example, education, e-health, intelligent transport, entertainment and media. Open APIs will allow anyone to create complex applications and services including augmented reality and content analytics. This project will have a beneficial impact on:

Software development

New applications will be created that can be possibly used on new devices.

Business

I2C PPP will create new opportunities for converged business models between content and telecom, broadcast, consumer electronics, etc.

Society

The project fosters the effectiveness of communication that will contribute to intellectual and leisure well-being.

During the NEM Assembly, members will also discuss other new and exciting projects throughout the day. Multimedia writing robots, augmented reality, brain-computer interaction and the new generation of the UHD visualization are only some of the topics that will be addressed.

Tomorrow,  March 16 2016, the European Commission is organizing an information day for potential applicants to the call for proposals ICT19-2017. The call addresses “Media and content convergence” to support Media Industries under the Horizon 2020 initiative where DAS Solutions has been an active participant.

Media and content created in Europe are diverse and captivating, however to keep ahead of the competition on the global market, the industry has to become more technology oriented. The sector has to be more adaptable to new technologies and to be able to reach wider audiences.

Participating at various events such as the NEM Assembly and being active in such programs as Horizon 2020 is a part of DAS Solutions’ strategy to provide the most relevant services on the European market. We aim to provide high quality IT solutions for various industries, to support young programmers, and give back to the community in which we operate.

7 Reasons to Work with an IT Outsourcing Company

It is true that working with an IT outsourcing company can save you money, but this should not be the only reason for choosing to partner with a foreign firm. Choose an outsourcing company wisely and it will bring you a range of benefits.

1. Begin your project right away

An IT outsourcing company will have the resources and knowledge to start working on your project quickly. Working on a project in-house in case you do not have knowledge and expertise will take a lot of time and money, because you will need to put effort in training and hiring people and getting them into the swing of things.

2. Work with experts

Some firms look for IT outsourcing companies because they need experts in specific programming languages. For short-term projects it makes no sense to hire such a developer full time in-house. Outsourcing is beneficial for small companies that are willing to be competitive by using high-tech.

3. Increase efficiency

If you are a big company, your IT team needs to be focused on the tasks with the highest priority. At the same time, tasks that are long-term can be delegated to your outsourcing team.

4. Focus on what is important with an IT outsourcing company

DAS Solutions gives you the possibility to focus on the core of your business, i.e. sales, marketing or customer experience. By being focused you are able to expand your business faster and offer a high level of service at the same time.

5. Handle the lack of human resources

The amount of work there is can be much higher than the number of people available to perform the tasks. This is especially the case in the summer when employees want to take a vacation or during shortages of talent in the company for other reasons. Your IT outsourcing partner is going to be responsible for managing your remote team.

6. Get quality

A good team of software developers delivers reliable products. The outsourcing company’s reputation depends on the quality of their service, which is a significant incentive to be more productive than your in-house developers.

7. Predictable budget

When you work with an IT outsourcing company you know in advance the cost of the development services, which will be helpful in your budgeting process.

Regardless if you wish to work with an IT outsourcing company or develop a product in-house you need to:

a- Set clear goals, milestones and tasks;
b- Have a strategic vision for the project;
c- Provide all the information and support needed.

Mobile apps and VAS

Can Mobile Apps and VAS Get Along?

Mobile apps and VAS (Value Added Services) are competitors in the race for subscribers. According to research conducted by J’Son&Partners Consulting, MNOs (Mobile Network Operators) are making less profit from voice, SMS and MMS traffic. This happens because:

  1. The competition between MNOs is very high;
  2. The consumption model of communication services by subscribers has changed.

In order to diversify, mobile network operators use mobile apps and VAS. However, application markets have been winning the game so far.

Mobile apps help solve various problems in everyday life.

Thousands of applications are launched in app markets such as the App Store and Google Play daily. As a result, MNOs that previously distributed content via VAS need to integrate in the new model of content distribution via apps.

In a white paper published by a consultancy, N. Dobberstein and Soon Ghee Chua argue that MNOs should be “smart enablers”. The key to MNOs’ success is in the encouragement of collaboration between different multimedia market players and in provision of insights of customers’ behavior as well as in offering tailored solutions and recommendations to customers. MNOs have to incorporate mobile apps in their offerings to strengthen the relationship with subscribers.

VAS will always be more expensive than mobile apps. Alan Knott-Craig says that this happens because “mobile operators will always take too much revenue share. In SA [South Africa], MTN keeps about 40%, Cell C about 30%, and Vodacom about 20%.” On the other hand, he also mentions that Visa and MasterCard take from 1%-7% of the revenue share when people buy applications from stores. Another thing that makes the VAS model more expensive is that it relies on costly advertising, such as TV ads.

VAS are not as intuitive as mobile apps and are hard to discover. In order to use the service, the subscriber has to know the exact short code of the service.

The shift toward mobile apps is beneficial for end-users because data is cheaper than SMS, MMS or voice. At the same time the trend is favorable for developers who do not depend on MNOs and can market their services globally without any integration with carrier billing. This allows applications to reach more people than ever before.

Mobile apps and VAS continue their battle for the ARPU (average revenue per user) and it is far from over.

At DAS Solutions we follow the standard Software Development Life Cycle (SDLC) to develop various mobile applications. We develop for Android, iOS and Windows Phone platforms. The choice of picking one platform or technology over the other depends on the customer’s specific requirements.