- Betterment teamed up with tech company Sure to offer insurance.
- And to further differentiate its offering and enhance its competitive offering, it should look to add more insurance options.
The US-based digital wealth manager has teamed up with tech company Sure to offer phone insurance, per a press release. Customers of Betterment Checking—the startup's checking account and accompanying debit card—can purchase coverage for phone damage or theft, as long as they pay their monthly phone bill using a Betterment Visa debit card.
While the claims process is supported by Sure's platform, the insurance policy is being provided by an undisclosed global insurance company, and customers will receive up to $600 per claim, with a maximum of two claims per 12-month period and a $50 deductible for each claim.
Betterment Checking only launched a few months ago, and enhancing the offering with additional services can help to boost uptake and loyalty. Fintechs globally have struggled to get customers to use them as their main account: In the UK, for example, just 12% of consumers have deposits of over £5,000 ($6,382) in accounts with neobanks, suggesting that many use digital-first offerings as a supplementary account.
By tying its insurance offering to the stipulation of using a Betterment debit card, the wealth manager can boost engagement with its services, and ultimately nudge users toward primary account status. What's more, the coverage option comes at no extra cost, which could further incentivize users to link their Betterment checking accounts to pay their bills.
Betterment should now add additional benefits to bolster its value proposition—and increase its competitive advantage. We think that expanding product suites via partnerships is a good approach to broadening offerings: Fintechs don't have to build new solutions from scratch, but can instead work with experts in a field they don't operate in.
Betterment, for example, could look to further build out its solid product suite by expanding insurance offerings beyond phone coverage via additional partnerships—SoFi, for example, teamed up with Lemonade, Root, and Ladder for its home insurance, auto insurance, and life insurance offerings, respectively. Moreover, by expanding its checking account offering, Betterment stands out from its digital wealth management competitors, many of which do not yet provide such insurance services.