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FROM DIGITAL LAGGARD TO LEADER – WHY AI CAN MODERNISE THE INSURANCE INDUSTRY

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By Assaf Tayar, Managing Director at BCG Platinion

 

The insurance sector includes many mundane and manual tasks. Yet the reality is that these tasks can – and should – be sophistically automated with Artificial Intelligence (AI), bringing a new lease of life to traditional insurers; famously known for being ‘digitally behind.’

AI comes with a wealth of benefits, like freeing up employees’ time and ensuring customer satisfaction. By leveraging the large variety of AI solutions, from chatbots to document processing or advanced analytics to fraud detection, insurers are able to improve and speed up many processes such as claims and appeals processing, while offering granular pricing, greater risk management and tailored products.

That said, AI solutions mustn’t be applied as a plaster or easy fix for the short-term. Instead, it must be incorporated within an organisation’s open architecture. Only then can insurers be prepared for the long-term explosion of technology, ensuring they can support the ever-growing rapid AI and data use cases in an iterative way while developing a “company-wide” data layer.

 

Assaf Tayar

The modular approach

Nearly three-quarters (73%) of UK consumers feel that the customer experience for insurance products has stood still for the last five years, according to research by global technology provider FintechOS. However, AI certainly provides a viable option to plug the consumer expectations gap.

Further to FintechOS’ findings, additional research from Xerox states that 40% of financial services and insurance leaders are planning to implement intelligence and advanced analytics services, including AI by February 2022.

But if insurers don’t approach AI by relying on open architecture, then they will not reap the benefits of AI at scale. What that ultimately means is not deploying an architecture that creates soiled depth as it gets more complex. The focus instead is on continuous development using a modular, platform-based approach.

With an open architecture approach, essentially organisations are able to add and remove components in order to meet the demands of new technologies. And if they don’t – the IT infrastructure will eventually need to be ripped out and replaced entirely.

 

Becoming data-centric

Central to reimagining IT architecture and its impact on the wider business is data and insurers’ approach to it.

Insurers have years of historical data at their disposal to define actuarial models and risk profiles for their prospects and clients. Insurers need to be tapping into these data sharing opportunities from ecosystems spanning across multiple industries and shared infrastructure to ensure that artificial intelligence is of optimal use for both business and customers.

Simplistically put, it’s about ensuring data is independent and hosted in the cloud, rather than within underlying siloed CRM systems.

Then, looking further ahead, the concepts of data mesh and distributed data space should facilitate aggregation of more data from the same source across time and space. And this is what will deliver data-driven value at scale, generating insights into trends that feed into AI systems.

Such reliance on data from across the businesses is what will help insurers to offer much efficient services continuously – even when trends and markets change. So from a customer satisfaction point of view, the answer is clear; a strong use of data feeds into AI, helping the technology to make much more informed and accurate decisions to benefit consumers.

 

A bionic business

It might feel impossible to design and implement new technology, but an open architecture changes this. Such approach means that businesses can be bionic – whereby insurers can combine the best of human expertise, data and technology, such as artificial intelligence.

Intertwining technologies such as AI with human capabilities allows insurers to power growth, innovation, efficiency, resilience, and competitive advantage.

For instance with fraud, artificial intelligence can flag up suspicious activity, and in turn, call upon advanced algorithmics to assess whether a claim is fraudulent or can be compensated. A time saving method, given that only the most doubtful or dubious cases would then need to be flagged for human evaluation.

And that is a true bionic example – where the strengths of a human and AI can work together in harmony, benefiting one another.

 

The human touch

Yet above all else, an open architecture approach must be combined with a contentious, empathetic attitude. The voices of IT architects – who provide guidance and expertise – should be listened to widely across the business, This can’t be a one-way relationship, because in order for data-focused architecture to succeed, its architects must be in constant dialogue with the business as a whole.

IT architects need to be responsible for understanding the business, and business leaders can only create a strategy if they understand the technology on a fundamental level, with the guidance from architects.

This way, insurers can build a bridge between the strategy and the activation. Combining an understanding of how best to leverage the available data, with the human touch to make deployment a success and guide the business strategy.

The most valuable asset for any business today is an architect and leaders or partners that can combine strategic business knowledge with a mastery of the architecture that underpins it. When these people come together, using data and putting the voices of people first, AI will be a transformative, revolutionary tool taking insurers from digital laggards to digital leaders.

 

Technology

AI-Powered Fraud Prevention for Digital Transactions

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By Martin Rehak, CEO of Resistant AI

Fraud is on the rise, thanks to the rapid escalation of digital channels in response to the unprecedented challenges created by COVID-19. However, this rapid shift to digital-first operations and transactions has come at a price for banks and financial services organisations.  Which is why financial services organisations are increasingly turning to AI to intelligently address an ever-evolving and ever-smarter attack landscape.

If nothing else, COVID-19 helped shine a spotlight on the vulnerabilities of today’s digital and mobile customer platforms that are capable of executing rapid and instant payment transactions, leaving little time to undertake customer authentication or transaction verification. Similarly, the difficulties of Know Your Customer (KYC) and customer onboarding in the digital era is exposing financial services organisations – and the customers they serve – to a significantly increased risk of cyber-crime and financial fraud.

According to a recent UK Finance report, £754 million was stolen from bank customers in 2021 as scammers industrialised the use of authorised push payment fraud to trick individuals and businesses into sending money to bank accounts operated by criminals posing as genuine customers.

The challenge created by automation

The rapid expansion and automation of financial services to minimise friction for customers has created new challenges with regard to verification and risk management policies and practices. Evaluating if a digital interaction is authentic now depends on referencing a huge amount of data from multiple sources – everything from geolocation and session behaviours to data from merchants, bureaus, and customer profiles.

Added to which, today’s financial fraudsters are becoming expert at targeting these complex digital environments and are using innovations such as block chain and instant payments against banks and their customers.

Staying ahead of criminals is an imperative. Especially as directives like Open Banking open up third party access to customer data that further heightens the vulnerability of finance firms to fraudulent activities if this process is not appropriately monitored and managed.

Financial organisations spend vast amounts of money protecting their information and IT, yet the automated processes that deliver access to money are often the least protected. Traditional approaches to fraud prevention that rely primarily on human intervention have proved inadequate for preventing the activities of today’s sophisticated digital criminals, who are capable of exploiting vulnerable automated systems at scale.

In response, the finance sector needs to enable real-time identity forensics that brings together state-of-the-art document and customer behaviour evaluation to uncover synthetic identities, account takeover attempts, money laundering and other emerging types of fraud plaguing financial services.

Strengthening onboarding and KYC processes

Attaining a deep understanding of the end-to-end customer journey is now mission critical for combating fraud and financial crime. Onboarding and KYC represent key cornerstones in the mission to prevent scams. However, the shift to digital documents for ID authentication, combined with the relaxation of onboarding verification to expedite customer conversions during the crisis, have created significant opportunities for fraud.

In the onboarding process, identify validation is the first step to affirm an applicant actually exists. Next comes verification, which links that person to the information they provided in the validation stage. In many automated workflows there are risks from forged or manipulated documents that support the customer journey in online lending, trading, insurance, financing, factoring and payments.

Typically, 17% of bank statements used for lending applications or KYC purposes have been tampered with and 11% of UK payslips submitted as part of digital loan applications have been altered or are forged. Similarly, 15% of company registration certificates submitted worldwide when opening a bank account are fakes and 9% of utility bills submitted as proof of address are forged.

By protecting automated processes that use unauthorised documents from third parties, institutions can gain certainty that all digital documents are genuine. Similarly, continually assessing transactions will instantly alert teams to potentially fraudulent activities. These anomalies encompass behavioural, device characteristics, unusual switching between accounts and more.

Providing an intelligent shield for automated financial systems, AI powered fraud prevention delivers a convenient customer onboarding experience while limiting the generation of false alarms – ensuring that fraud and cyber analysts need only investigate genuine priority alerts.

Advanced fraud insights

Today’s AI-powered real-time identity forensics are capable of detecting advanced fraud and manipulation and are adept at joining the dots to uncover previously unidentified vulnerabilities and gaps in third-party systems, so that future potential exploitations can be deterred.

With financial criminals continuing to up their game, banks and finance organisations are leveraging AI technologies to strengthen the validation, verification and transactional processes that deliver enhanced security without compromising the customer journey or experience. With the right financial automation oversight technology in place, they’re better positioned to predict, detect and deter criminal adversaries and stay one step ahead of evolving new risks on the horizon.

 

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SMART WEARABLES IN HEALTH TECHNOLOGY

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Gavin Bashar, UK managing director at Tunstall Healthcare, discusses smart wearables in health and social care, the benefits, and what the future holds.

For many years, technology has been integrated into every sector in the economy, from banking to shopping, to enhance the experience of customers.

However, health and social care services have fallen behind in terms of technology adoption and innovation, for reasons including fragmented structures, limited resources, and reluctance to change.

Yet person-centred technology has the power to transform lives, not only enabling the ongoing delivery of support services to vulnerable people, but reshaping the health and social care sector as a whole.

Technology-enabled health and care is the service of the future and the ongoing and unprecedented rapid acceleration in the adoption of care and health technology has demonstrated the numerous benefits in practice.

 

Why wearable technology?

Wearable technology enriches the lives of a range of cohorts, including people living with long term conditions such as dementia, and connects vulnerable individuals to key stakeholders such as clinicians and family members.

The better application of technology and wearable devices can deliver significant benefits including improved patient outcomes and service-user experiences, a reduction in the strain on staff and carers, and potential cost savings or avoidance.

Wearable devices and the systems they’re linked to use wireless and digital technology to enable support services to be efficient, flexible, responsive, and tailored to the individual. The unobtrusive devices also ensure that care delivery is discreet and won’t interrupt the daily life of service users.

Proactive healthcare is also easier thanks to wearable technology. Service users become much more engaged with their own health and have greater opportunity to develop a proactive approach to their health monitoring, rather than reacting. Technology can be used to enable intervention at an early stage by identifying irregularities before they become more significant health or care issues which require expensive care and treatment.

There is significant evidence that wearable technology offers users greater choice in terms of the care they receive and prevents incidents in the first place, by recognising an emergency as soon as it occurs. Community alarms and telecare services in particular are effective methods of signposting to clinicians and additional services when a user requires care, and this has been particularly important during the pandemic.

 

Wearables in a home and residential care setting

When providers are presented with unique opportunities to drive the adoption of digital health solutions such as wearables, there must be a focus on designing holistic services which fit seamlessly into the user’s life, work with clinical practices, and ensure any data that is collected is stored securely.

There is a huge range of wearable technology and devices available which perform a number of functions and can therefore be tailored to suit the needs of an individual and their stakeholders, such as carers and clinicians.

Small, discreet pendants available on the market can raise alarm calls in emergencies, and protect users living independently at home or in group living environments. Features can include integrated alarm buttons, LEDs for visual reassurance that a button has been pressed, easy to wear options, and auto low battery monitoring and alerts.

Falls are the main reason that older people are taken to hospital and unaddressed fall hazards in the home are estimated to cost the NHS over £430 million1. Smart wearables use advanced technology to allow users to raise an alarm from anywhere in their home or care setting if they are in difficulty. Some devices can also automatically raise an alert if a fall is detected.

This technology offers confidence to individuals who are at risk of falling, such as people with limited mobility, the elderly, and people with long-term conditions such as epilepsy, diabetes and Parkinson’s disease.

Wearable technology not only benefits vulnerable individuals living at home, but also those in residential care settings and their carers. Nurse call systems which are integrated with smart wearables can be personalised to ensure individual safety with minimal disruption to other care home residents. It also respects dignity while improving management insights, workflow efficiencies, staff morale, and care quality.

Devices can also be worn which protect users when away from home, automatically detecting falls, offering an SOS function and providing the user’s location.

 

The benefits of managed technology and smart wearables

Technology can require equipment from a range of manufacturers. Identifying, purchasing and managing devices from multiple sources can prove challenging and resource intensive for local authority community alarm centres.

Nottinghamshire County Council (NCC) has a managed healthcare service which includes home units, telecare sensors and wearable devices which are all tailored to the needs of individual service users.

All connections are monitored and referrals are made to the NCC Responder team, nominated contacts or the emergency services, as appropriate. NCC also has Reablement Assessment flats with telecare in place to support people leaving hospital, helping them to increase wellbeing and regain skills to enable them to return home.

Between October 2019 and December 2020, significant benefits and improved outcomes have been observed. Over 280 cases where a high and immediate risk of admission to residential care were avoided, and over 650 cases which required additional community care costs were avoided.

In total, savings of over £2.2 million have been achieved after additional service costs, costs of homecare for people diverted from residential care, and loss of client contributions have been deducted.

 

The next generation of wearable technology

The deployment of smart technology, including wearable devices, enables vulnerable people to live safely and independently for as long as possible. However as demands change, the care journey is now evolving rapidly and healthcare services must adapt accordingly.

We’re beginning to see the next generation of predictive care technology and smart wearable devices, and over the next few years this will encompass integration that enables diverse and scalable models of health and social care. Using AI and taking data-driven insight from multiple sources, providers will use this next generation of solutions to optimise Population Health Management programmes by providing personalised and anticipatory care.

Smart wearables in health and social care are designed to improve quality of life and empower individuals to take control of their health, while supporting the NHS and additional stakeholders by reducing the number of required GP visits, ambulance callouts, hospital admissions, and demand for local authority funded residential care

For more information on how wearable technology can support the ongoing delivery of proactive and effective support, please visit www.tunstall.co.uk

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