Financial Keyosk wants to make it easy for banks to sell insurance products and for insurance clients to access banking services.
"Since Gramm-Leach-Bliley, banks have had the option of either purchasing an insurance company or aligning somehow with an insurance agent," said John Dawson, CEO of Financial Keyosk, based in Schaumberg, Ill. "Over the last six to eight months there have been new models coming out that allow banks to get these services without having to make a capital investment, by getting private-labeled services through the web."
Financial Keyosk is designed to do just that. "If customers went to the Bank 'X' Web site, they'd click on insurance. Behind the scenes it's Financial Keyosk," said Dawson. "If the customer calls with a question about the insurance, it's answered as Bank 'X' at the call center, so you private-label it all the way back."
While bank customers in this scenario would have access to quotes from multiple insurance carriers, insurance clients of Financial Keyosk would also have access to financial services from multiple banks.
"It's a choice model--you have multiple health and benefit carriers, multiple property/casualty carriers and multiple banks," said Dawson. "Many banks have done proprietary contracts, but then a customer doesn't have any choice. If the partner is too expensive or doesn't have the right products, that customer doesn't get fulfilled."
Yet Financial Keyosk will limit the number of companies in each region to keep competition from reaching cutthroat levels. "Our objective is to have about five banks per region for each customer request," said Dawson.
The company has spoken with about 30 banks since its January launch; six are close to signing up. "It's a long process with banks," said Dawson. "Many are still licking their wounds with the early dot-commers that have come and gone. They've also got the political issues involved with insurance agents that they have engaged or purchased."
Associations, affinity groups or smaller agents can also adopt the Financial Keyosk business model. The first affinity group client, heavy machinery manufacturer Caterpillar, Inc. (CAT), will sell insurance and other products downstream to contractors that buy the company's equipment.
"Most of our business is going to be transacted through trusted advisors," said Dawson. "The person from CAT that goes on there is saying, 'They've sorted all this stuff out for me and I trust them, so I'll go on there to check out some mortgages and leases.'"
Although the Financial Keyosk model may allow other entities to siphon away banks' business, bankers are still considered among the top trusted advisors for small business. "There's good reason to believe that a bank should be able to sell all the financial services products a customer needs, rather than having to go down to an insurance agent," said Dawson.