iStream Reflects on the Future of Affinity Distribution


The following is part of a series on affinity distribution and the future of insurance through the lens of PIMA Company Members who are seeking innovative ways to address industry challenges. Discover their visions for the future:

About iStream

Since its founding in 2004, iStream has become a pioneer in the remote deposit capture (or RDC) check imaging space. The company’s capabilities allow a user to take a picture of a check and then upload the electronic image to initiate a deposit. As an end-to-end payment solution, however, iStream has continued to add to its cadre of services.

The company’s payment platform not only facilitates RDC, but also handles automated clearing house (or ACH), credit card processing, remittance processing, and sub-accounting, among other capabilities. Through continuous payment innovation, the Milwaukee-based company helps its clients and partners overcome any challenges they might face when trying to move money in, out, or around their organizations.

The Future of Affinity Distribution

Historically, the insurance industry often wasn’t the first sector that came to mind when discussing innovation. In the past few years, however, many providers began to move away from the face-to-face service model. Since then, the rate of innovation in the insurance industry has picked up the pace. One area experiencing significant movement is payment technology related to premiums for insurance benefits.

Payments are everywhere, explains Tom Cunningham, vice president of marketing and business development at iStream, and the ways people and businesses exchange funds will continue to evolve, particularly when it comes to cost, speed, and efficiency. Although there might be some lingering reticence to move from paper-based to electronic payment solutions (21% of payments are still made by check), there are many opportunities to embrace enhanced methodologies for transferring money. Cunningham believes businesses can remain competitive by finding new ways to accomplish such goals.

Take wire transfers, for example. In the past, people spent about $35 for this service. Now, the functionality is available to make same-day payments either for free or for minimal fees. In fact, many college students will pay 45 cents to have money transferred via Venmo instead of waiting a day or two to move funds for free. Payroll is also moving to same-day payments at many businesses — though Cunningham notes that some would rather sit on that money for a few additional days.

In the insurance sector, payment innovations are making things more linear and less complicated. For iStream, this means helping employers handle voluntary benefits for employees. According to Cunningham, the employer traditionally engages a broker or an agent to offer benefits to employees and then withholds the appropriate premiums for the employees using deduction slots in their payroll system. This naturally places an administrative and even financial burden on that employer.

Implementing a digital payment solution like iStream would mean the employer no longer has to receive invoices, deduct and hold premium funds, and process AP for employee premiums each month. Instead, iStream’s payment platform leverages a robust sub-accounting platform with limited-use accounts to collect and remit employee premiums. These premiums are entered into payroll as either secondary or tertiary disbursements each time payroll runs, altogether eliminating the time and effort the employer previously spent on the task.

All industries are moving toward online payments, same-day payments, and similar payment solutions to move money from one account to another. That’s why it’s essential for companies to explore their options around innovative payment solutions.

The Next Generation of Insurance Industry Leaders Can Push the Sector Forward

For the next generation of distribution, insurance, and financial services professionals, Cunningham recommends flexibility and adaptation — along with innovation, especially when it comes to sectors such as insurtech and fintech.

The insurance industry is more than 100 years old, and many companies are still waiting for checks to come by mail instead of using electronic payment innovations. Embracing change can be challenging, but it’s an important step of innovating to solve problems associated with moving money efficiently and in timeframes that meet customers’ and carriers’ needs.

Data solutions is another area Cunningham recommends exploring. There was a natural correlation between payments and data when iStream got into the insurance space four years ago, so the partnership made sense. After all, payments are reconciled with data. Companies not only move dollars from point A to point B, but also all the data associated with those transactions. If you’re looking to enhance and streamline payment processes successfully, it is critical that data solutions are considered in tandem with payment solutions in today’s ever-evolving marketplace.

According to Cunningham, it’s an opportunity to provide best-in-class services to both consumers and businesses while saving time and money and reducing the overall complexity involved in the entire process. In other words, it’s a win for everyone involved.

If you’re interested in learning more about how PIMA can help your company drive growth and connect with other insurance industry leaders, contact us today.

Published on June 6, 2022.

PIMA® (Professional Insurance Marketing Association®) is a member-driven trade association focused exclusively on the group-sponsored benefits market.