Asheesh Mehra, Group CEO & Co-Founder at AntWorks
Artificial Intelligence and Machine Learning have gained somewhat of a reputation as a silver bullet for the insurance industry. This is mainly due to its capability of automating and delivering greater levels of intelligence to specific insurance and business processes. What’s more, with the help of AI, insurance companies can improve the overall efficiency of their operations.
Insurance companies adopting AI to improve their market standing gain competitive advantage as a whole. However, this was not always the case. The insurance industry has for a long time now been held back by its reluctance to innovate and adapt due to barriers of regulation, lengthy processes and product complexity. This could all soon change. Insurers are looking towards AI in a bid to provide faster, better, and more efficient services to their customers. This also coincides with the rise of Insurtech, the use of technology innovation in insurance. This means that insurance companies are now looking to move away from the traditional legacy-based modus operandi and adapting to an evolving marketplace. A marketplace where AI such as Intelligent Automation (IA) is infiltrating systems and transforming business processes.
A new opportunity
The insurance industry is one of the most regulated and oldest business service industries in the world. An industry built on trust and customer care that is still reliant on the human touch by way of complicated, manual, and paper-based processes. This may explain the industry’s lack of adaptability and its reluctance to embrace digital innovation.
As a result of this, customer care, one of the main pillars that the industry has been built on, lacked much-needed quality for a long time now. Customers have to endure time-consuming bureaucratic processes that are often not even tailored to their special needs or demands when it comes to applying for insurance policies. What’s more, the slow-paced nature of processes means delays in generating insurance renewals quotes will start to impact a firm’s ability to generate revenue. The sheer volume of business data, mainly comprised of unstructured data that needs to be processed and analysed, along with the complex business rules that need to be followed, point towards a desperate need for improvement. Time has now come for insurance companies to look at ways to improve their operational processes through technology innovation. AI has the capabilities to help insurance practitioners to do business much faster, more efficiently, and with greater security.
Insuretech: AI is here to stay
Many insurance companies have started adopting and implementing various different AI technologies in their operational processes in a bid to not only improve their customer experience but also their bottom line. One of them is Intelligent Automation (IA), the holistic automation of business data of all kinds. Many Insurers are looking to expedite renewal policy quotes with automation to gain faster and more customer centric results. IA can process large volumes of data and ensure the generation of faster, and more accurate results. In fact, according to a recent McKinsey report, automation can reduce the cost of insurance claims journeys by almost 30 percent. A leading HR consulting firm used IA to improve its processing speed by 70%. The company implemented the technology to manage large volumes of data and provide optimised quotations to customers for new policies and renewals. This in turn lead to higher customer renewals, an increase in customer acquisition rates and increased revenues.
This isn’t a surprise considering Intelligent Automation Platforms can analyse and process large amounts of unstructured data and complex business contracts at a fraction of the time compared to traditional insurance processes. IA does this two-fold; firstly by process discovery, as this can help identify and confirm the feasibility of process automation opportunities, therefore optimising repetitive human-driven processes and achieving enterprise-wide scalability. Secondly, by way of identifying and seeking out clean, readily available data via straight-through processing.
IA can also effectively eliminate the chances of delays occurring that could impact a firm’s revenue generation. IA platforms built with powerful data ingestion modules can read printed and handwritten text scanned documents and images, signatures, and PDFs. This enables insurers to generate more insurance renewal quotes in less time and with better quality. Faster, superior, and more tailor-made insurance renewal quotes will certainly improve the bottom line as well as customer retention and acquisition rates. In addition to this, enterprises will also be able to speed up workflows and unlock new revenue streams.
A benefactor of a national insurance provider used IA to abandon their pre-existing lengthy processing period for detailed documents. The technology managed to help them eliminate manual tasks by 75% and increase the processing accuracy. More specifically, the IA platform not only helped process unstructured data that included handwritten fields, but also signatures and checkboxes within the policy documents. Crucially, integrated automation platforms can provide customers with a level of transparency not seen before, making it easier for customers to interact with brokers and review insurance rates. Naturally, this level of customer experience will likely lead to greater customer satisfaction and client retention.
For those companies in the insurance industry yet to explore the potential of AI, it is now time to consider how they can go about investing in the technology. Identifying the specific needs for automation and implementing the right AI tools will enable insurance companies to achieve far greater operational efficiency and stronger revenue streams than ever before.
COULD COVID-19 BE THE CATALYST FOR DIGITAL TRANSFORMATION IN FINANCE?
By Simon Bull, Sales Operations & Business Development Manager at Aqilla
We are all now living in a new ‘normal’ where working from home is no longer a luxurious ‘perk’ of the job, but an essential. In the case of many organisations, the transition to flexible, remote working was successful, albeit slightly bumpy. But there is one department that has found it more challenging to transition to the required standards of remote working – the finance department.
The finance department often gets left behind when it comes to digital transformation largely because it is so heavily regulated. And because of this, one of the biggest problems the finance teams face is that it’s sensitive data will likely be stored on a hardware server on office premises. If you look at how organisations update their software as they grow, it’s usually the finance department lagging far behind, or sometimes forgotten about altogether. This is because finance has complex requirements that can lead to the attitude of: if it ain’t broke, why fix it?
Up until now, most finance teams have overcome the challenges this situation presents, but with the repercussions of the pandemic still very much in play, the complications that go hand-in-hand with on-premise technology have been more noticeable than usual. As a result, COVID-19 is becoming a catalyst for a digital transformation in finance, or more specifically moving finance and accounting software away from traditional on-premise solutions to built-for-cloud services. But what are the advantages of this approach, and what should finance teams be looking for in a built-for-cloud solution?
Cost: The Software-as-a-Service (SaaS) approach that is the basis of many of today’s cloud computing businesses generally offers customers a convenient monthly pay-as-you-go model. Given that all that users need to access the software is a desktop, laptop or smart device and internet connectivity, they can also save money on the server hardware that has previously sat in the corner of the office. Hint: compare pricing from several potential providers to make sure there are no unexpected extras before signing up.
- Service: Good cloud-based providers offer extremely strong levels of customer support and service. It should be very easy to get help quickly and conveniently, and they should be in a position to offer advice, identify problems and fix errors without undue delay. Hint: ask for references from existing customers or look for online reviews to assess their service and support capabilities. Also, carefully check their Service Level Agreement (SLA) to clearly understand where their commitments begin and end.
- Security: Established cloud providers offer high levels of security, data protection and backup services as part of their ‘as-a-Service’ package. Customers benefit from the protection afforded by security specialists whose job it is to prevent breaches and keep data completely secure. Hint: Check their security policies and consider talking to existing customers about their security track record.
- Compliance: Cloud providers specialising in the finance industry should have compliance at the heart of their product set. Hint: Check with potential providers about their levels of compliance and certification, particularly if you have specialised requirements.
- Ease of use: today’s built-for-cloud software services are built for purpose, with many offering a high degree of bespoke capabilities so every user can tailor it to their precise needs. This is in contrast to traditional software packages that can be far less flexible, forcing the user to work in a particular way that might not be ideal. Hint: ask potential providers for an online demonstration to check the way the services work meet your needs.
- Performance: In the early days of cloud computing, finance software was too basic for many professionals to consider. Today, there are many entry-level services, while others offer a comprehensive range of capabilities to precisely fit the needs of professional finance departments. Hint: evaluate the range of capabilities offered by a cloud provider, which should include areas such as: extensive analysis, proper periodic management and business calendars, multi-currency, multilingual and multi-company operation, full VAT handling International coding, tax and language flexibility, automatic reconciliation / bank integration, built-in key performance measurement, advanced search, selection and drill-down, document and image scanning. Hint: compare the features of different providers in advance – if anything important is missing, look elsewhere.
- Regular updates: Software developers find it much easier to update and improve their services when they are delivered online, and can more effectively keep up with finance best practice and changes to rules and regulations. Many also encourage users to suggest improvements or new features which are then provided to customers at no extra cost. Hint: ask providers about how often they update their software and whether you can suggest improvements.
For many businesses, these are compelling reasons to adopt cloud-based finance software services, even in normal circumstances. But considered in the context of the current remote working environment, built-for-cloud finance software can help departments to adapt and capitalise on working from home and match the levels of digital transformation seen across many other key business functions.
WE NEED FINTECHS NOW MORE THAN EVER
Lubaina Manji, Senior Programme Manager, Nesta Challenges
Whilst the sun is far from setting on the COVID-19 pandemic, predictions and hopes for a new “normal” are shimmering on the horizon.
Amid the trail of devastation left by the virus, there has to be some semblance of change and positivity to be taken. One such shift is the increase in digital services usage which poses a huge opportunity for our fintech community. Confinement has forced even the more sceptical of us to dabble in digital, and embrace how it has made many everyday tasks more easy and convenient.
Online and mobile banking has been helping many people stay on top of their finances for some time. Research conducted by Open Up 2020 Challenge last summer found half (48%) of people would like to use online tools and apps to help them manage their money.
Then along came a global pandemic that has undoubtedly forced the hands of even the more sceptical to log on, download and transact – quickening the pace of long-lasting change in terms of how we manage our money. Recent figures from deVere Group suggest the virus is behind a 72% rise in the use of fintech apps in Europe. Never before have we been so reliant on technology in maintaining some sort of normalcy and in helping us continue day-to-day tasks, like everyday banking.
Another unfortunate byproduct of protecting communities from the virus means many people have been left out of work and with less or no income. In times of financial strain, the need for people to engage with their finances – be it budgeting, saving or shopping around for better deals – is far greater.
Issues of trust in traditional banking services and a lack of awareness of the helpful money management services available are some of the barriers preventing people from taking more control of their finances. But the solutions made possible through open banking can provide people with a lifeline to build their financial resilience and better manage their money.
Open banking has the potential to revolutionise financial services, by giving people control over their financial data in order to access innovative products tailored to them. Since it launched in 2018, open banking technology has opened the door for new fintech innovators to create cutting-edge tools designed to help people better manage their money – from budgeting, debt management, comparing and switching banks to automating savings and more. These could have a significant impact – it is estimated that UK consumers could gain as much as £12bn over the course of a year from open banking-enabled tools.
So far, it’s been effective – the UK FinTech’s State of the Nation report totted up more than 1,600 fintech firms in the UK in 2019, whilst predicting this could more than double by 2030. Figures from the Open Banking Implementation Entity showed there were 243 regulated providers, 169 third party providers and 74 account providers as of April 2020. The UK adoption rate of fintech is 42% – higher than the global average of 33% – making it ripe for opportunity. Coupled with lockdown restrictions creating greater dependence on technology – including ATM cash withdrawals falling by half – fintechs are well placed to be part of the solution – and offer help to those struggling to manage.
With more than a fifth (21%) of the adult population saying financial stress is having a bigger impact on their mental wellbeing than physical health concerns during the crisis, and a quarter more stressed about money than usual, fintechs can be part of the support available to them.
However, in order to fully realise the opportunity we need to ensure budding entrepreneurs with bold ideas have the means to turn them into reality. Nesta Challenges exists to design and run challenge prizes that incentivise people to help solve pressing social problems that lack solutions. Through our Open Up 2020 Challenge we are supporting 15 fintech finalists to develop their solutions to enable more people – particularly those underserved by traditional financial products – to manage their finances better, whatever their circumstances.
Of the 15 finalists, some offer app designed to help people budget,, save, switch and invest – aided with alerts and notifications that allow people to stay on top of their finances and make their money work harder for them for the long term. For example, Cleo is an AI financial assistant that is already helping more than 3 million customers monitor their spending, budgeting and saving, while Moneyhub empowers people to do more with their money by offering actionable insights from a review of all of their accounts.
Some of the apps are designed for those with more specific circumstances, such as Mojo Mortgages, which analyses income and transaction data for first time buyers to produce mortgage affordability scores and savings recommendations if they aren’t quite ready to apply. Finalists Portify and Wagestream cater for workers with irregular earning patterns.
As well as monetary grants, Open Up 2020 Challenge provides these companies with non-financial support and promotion to help them on their way to achieving their full potential – which in turn helps them reach many people to help them achieve their monetary goals.
While COVID-19 has created personal finance headaches for many, it has been inspiring to see how quickly fintechs have been able to innovate and develop digital solutions that help solve these problems and equip people to better manage their money.
 Open Up 2020 Challenge
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