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Ghost brokers – what are they, and how can insurers stop them?

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Gareth Evans – Head of Customer Success UK, Ireland & The Nordics, Shift Technology 

 

Today’s insurance-buying process is virtually unrecognisable from just a few decades ago. Gone are the days when our first port of call would be to consult a traditional agent or broker. Today, instead of consulting someone we know personally (and might have used time and time again over decades), most of us will turn to online insurance brokerages and price comparison sites.

In theory, this has made buying insurance much easier. After all, we can now communicate directly with insurers, or get hold of the best possible deal in minutes using an online brokerage. But who’s running all these online brokerages, and can they all be trusted?

In a word, no. The online insurance brokerage space is increasingly being co-opted by bad actors known as ghost brokers. And yes, they’re as frightening as they sound! Ghost brokers sell bogus insurance policies, preying on unsuspecting consumers hunting for the best deal – a group that’s likely to grow as cost-of-living pressures continue to mount. Since they’re usually less familiar with the ins-and-outs of the insurance-buying process, ghost brokers tend to target young people. Over a third of victims are aged 17-29, and they’re often drawn in through adverts on social media.

How does ghost broking work?

Unlicensed ghost brokers claim to work with insurance agencies to get much lower costs than normal. This is, of course, a lie.

The most blatant form of deception perpetuated by ghost brokers is selling insurance policies that simply don’t exist. The falsified supporting documentation either comes from completely invented insurance companies, or purports to be from genuine insurers to create a veneer of respectability. For insurance companies, this can pose a serious issue, denting consumer trust and poisoning relationships with younger customers.

Other ways that ghost brokers defraud consumers is by signing up multiple customers for the same policy or entering false information about prospective policy holders to get artificially lower rates. This presents a serious financial risk to insurance companies, who are forced to dedicate significant resources to investigating and unwinding fraudulent policies in the aftermath of a claim.

Regardless of the type of scam, the outcome is the same. Victims pay insurance premiums to the ghost broker every month until an incident occurs – at which point they attempt to make a claim, only to discover they’re uninsured. This leaves them out of pocket, and in some jurisdictions liable to being fined or even convicted in a criminal court.

How does insurers’ current infrastructure enable ghost broking?

In large insurance companies, customer information often exists in siloes. Ghost brokers know this and are savvy about taking advantage of it.

Consider ghost brokers who use false information to create low-cost policies. Typically, they might misrepresent a newly qualified 19-year-old driver as a seasoned 42-year-old. Confirming the driver’s actual age can be surprisingly time consuming if the insurer isn’t automatically checking this against external data sources, like government databases.

Another way ghost brokers take advantage of insurers’ legacy systems is by creating a single combined policy for all their victims. For this scam to work, the ghost broker must use the same phone number and address for everyone named on the policy – which can of course arouse suspicion. To slip through the cracks, ghost brokers will create multiple customer accounts through different portals – online, over the phone, in branch etc. If these separate portals don’t link to the same database, chances are it’ll be a while before different teams within the insurance company compare notes and discover the deception.

What can insurers do to stamp out ghost broking once and for all?

Currently, the onus is very much on policyholders to be vigilant about ghost broking. Though consumers should certainly check if the broker they’re using is licensed before buying a policy, insurers should also play their part to limit the damage caused by ghost brokers. Raising awareness on the topic is crucial – this is something the Insurance Fraud Bureau has been doing through multiple educational based campaigns.

Insurers can also limit the damage caused by ghost brokers by implementing a layer of AI into their back-end systems, removing information siloes and making it easier to detect ghost brokers. So, if a ghost broker attempts to sign up multiple customers using the same information, they’ll be detected straight away. Even if the broker signed them up using different channels or fake information. AI is capable of spotting reused and changing MOs to identify ghost broking patterns and refer this suspicious policy behaviour for further investigation.

In addition, AI can recognise unusual patterns in customer data. For example, by flagging that a single IP address has been creating accounts for multiple customers and then cancelling them after a short time. This pattern might indicate a ghost broker at work, and certainly merits further investigation.

The bottom line? Ghost brokers aren’t going to disappear on their own anytime soon. The sooner insurers can identify them and stop them in their tracks, the better. A range of AI-based solutions that can help with this already exist. It’s up to insurers to implement them or risk incurring further reputational and financial damages.

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How financial services organisations can harness the power of low-code/no-code

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By Joman Kwong, Strategic Solutions Manager, Financial, at Laserfiche

 

The UK’s erratic economy, and its spiralling cost-of-living crisis, have amplified consumer demand for personal finance and wealth management support. And with financial customers growing ever more tech-savvy, it’s not just the monetary services themselves that are under the spotlight, but their digital methods of delivery, too.

Today, an estimated 64% of Britons believe digital processes — like remote account opening, online banking or mobile apps are important factors in deciding what financial institutions they do business with. And as sleek, intuitive digital experiences like the Netflix homepage fast become the norm, customers now expect similar ease of use, personalisation, and automation from their financial services. Finance is an industry which, perhaps more than any other, needs to radiate trust, safety, and simplicity. So, businesses’ processes and user experiences (UX) must be modernised to reflect this—otherwise, they risk current and prospective customers turning elsewhere.

In the past, wealth management and personal finance companies would’ve faced costly, time-intensive coding projects to upgrade their digital services. Traditional ways of developing technology applications can take several months — for testing, debugging and deploying organization-wide. This can seem overwhelming or even impossible for many organizations that have limited or strained IT resources. A recent survey of financial advisors conducted by Laserfiche found that the top three challenges to changing workflow processes were competing priorities (52%), uncertainty on where to start (35%), and lack of bandwidth (30%). So, how can firms keep pace with technology needs, while continuing to provide high-quality client services?

The recent emergence of low-code and no-code tools now mean that even employees with little knowledge of programming can make impactful changes to online banking processes. So, let’s explore the power of ‘low code/no code’ in more detail — and how finance companies can harness its power to create cutting-edge, ultra-efficient user experiences today.

What is low code/no code?

Simply, a low-code/no-code platform provides tools that empower individuals or teams to create and deploy electronic forms, automate workflows or integrate technology applications with little to no IT or programming support.

With drag-and-drop toolkits and prebuilt process templates, firms can digitize and automate processes like opening new accounts, money movement, or gathering information to complete a financial plan within a matter of hours. Low-code and no-code tools also support back-office process transformation projects, which can provide additional significant time and cost savings.

According to Forrester, low-code platforms have the potential to speed up software development by as much as 10 times when compared to traditional coding methods. After all, they not only minimise the need to code applications from scratch, but also the need to re-programme basic functionalities and back-end infrastructure by reusing pre-approved foundations. And perhaps most importantly, they free up precious IT resources to focus on more challenging, strategic projects and upgrades.

Low-code/no-code fosters agility for organisations within any industry. But for financial services, in which tough regulations and customer needs are evolving perhaps faster than ever, it allows businesses to safely respond to changes not within weeks or months, but mere days. By leveraging low-code/no-code tools, finance companies can act far faster than competitors — and earn more customers as a result.

A Low-Code/No-Code Approach to End-to-End Solutions

Though low-code and no-code platforms are commonly used for building automated solutions to customers’ pain points, their power extends beyond individual workflows. Leading low-code and no-code platforms can also support integrations using services such as integration-platform-as-a-service (iPaaS), which can significantly boost productivity and accelerate response to customer needs. Firms can leverage iPaaS prebuilt connectors to quickly orchestrate integration flows between line of business applications such as ECM, CRM, ERP, payment processing systems and more — rather than using the months of IT time normally required to deploy these types of solutions.

Integrating multiple platforms and data sources can ultimately unlock insights that inform firms’ strategic decisions, driving new and innovative solutions and customer experiences. For example, by integrating a firm’s CRM, ECM and customer service tools, employees can get a holistic view of their customers, and pinpoint areas of the customer journey that fail to meet expectations, such as a heavy visitor drop-off on an investment calculator tool. The firm can then address these issues by re-engineering the investment calculator process, and continue to monitor, personalise, and improve the wider customer experience.

Considerations for leverage low-code and no-code tools

While the promise of low-code/no-code has many organisations exploring this new frontier of application development, not all vendors providing low-code/no-code solutions are created equal. Firms seeking out these technologies should be aware of key considerations:

  • Financial services experience: Operating in the wealth management industry requires expert-level compliance literacy. Vendors should have a deep knowledge of SEC and FINRA requirements, and a demonstrated commitment to data security and privacy.
  • Ease of use: The term “low-code” casts a wide net. Technology platforms that provide intuitive experiences — such as downloadable prebuilt templates and drag-and-drop tools — provide the most value to firms looking to deploy automated solutions quickly, speed adoption and achieve fast ROI.
  • Customizability: Tech vendors should provide flexibility within their solutions to allow users to easily configure solutions to fit specific organizational needs.
  • Scalability: Vendors with a cloud-first development approach will provide more agility and scalability, essential for firms looking to grow and navigate change.

Is low-code/no-code the future?

Some might perceive the leveraging of low code and no code to be a little restrictive when compared to a bottom-up coding approach. But with the right platform, the possibilities of what can be built are almost limitless. Some platforms even host solution marketplaces, in which creators can share the solutions they’ve built, and others can download these pre-built templates to kick-start improvements even faster.

With so many advantages, it’s perhaps no surprise that analyst firm Gartner predicts by 2025, “70% of new applications developed by organisations will use low-code or no-code technologies, up from less than 25% in 2020.” As budgets shrink and digital expectations grow, low-code/no-code might just be the answer for financial services companies looking to remain safe and successful throughout the looming recession.

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The power of a proactive customer service

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By Delia Pedersoli, COO, MultiPay

 

2023 is shaping up to be another challenging period for B2C businesses. While the disruption of the Covid-19 pandemic has for now largely disappeared, new challenges like the cost-of-living crisis have arrived. As economic uncertainty impacts every consumer business from retail to travel and leisure experiences, service providers and suppliers must double down on their customer service to help clients through these challenging times. One area of customer service that is particularly important – and often overlooked – is proactivity.

A move to a more proactive customer service approach should not come at the expense of reactive measures. Regardless of how well-prepared customer service teams are and how detailed processes are, there will always be unforeseen and unexpected issues that need to be addressed. But by working in tandem, B2B service providers can deliver the service that customers now expect.

In recent years, the landscape has changed. Customers expect proactivity and for suppliers to understand what they want. Data from Salesforce that covered both consumers and business customers identified that two-thirds of respondents expect the suppliers they buy from to understand their needs and expectations. Not only this, but those that do take a proactive approach to customer service see a full point increase in their NPS.

Delivering a first-class proactive customer service is therefore a key requirement for businesses wanting to build and develop long-term relationships with their customers. However, for many businesses, it can be hard to know what to focus on and improve to attain the proactivity required. At MultiPay we have made proactivity a core part of our customer service, which has allowed us to identify several important factors.

A proactive process

Delia Pedersoli

The first area to focus on is getting close to customers. The more you know about a customer, how their business works, what the goals are and where there are challenges all helps in identifying areas to support with a proactive customer service. A good method to structure these insights is to conduct a SWOT analysis. Knowing the strengths, weaknesses, threats, and opportunities of a client helps identify areas that may need support soon. On top of this, it is important to invest time in speaking with clients. Not only will this help with the SWOT, but it can also highlight areas for operational improvements. Speaking with people from across the business allows you to truly get under its skin.

Knowledge is power when it comes to enhancing the proactivity of customer service. In addition to getting under the skin of a business, it is also important to understand its industry inside and out. Staying on top of key trends, themes, and issues affecting a client’s industry and sector helps with remaining on the front foot. Recently at MultiPay, we experienced a scenario that brought this home, working with one of Europe’s largest tourism operators, The Travel Corporation (TTC) which needed to bounce back quickly following the Covid-19 pandemic. With consumers excited to travel again, TTC needed a customer service and payments solution that could quickly scale and support its on-the-move workforce of travel directors. Working closely with TTC’s team along with monitoring the news and industry trends like the lifting of travel restrictions we were able to be proactive in scaling up operations in anticipation of key markets reopening. Staying ahead of the curve meant we were prepared to deliver new or replacement payment terminals at very short notice to travel directors anywhere in Europe. As a result, we eliminated the risk of downtime and loss of earnings that TTC could have suffered if there had been delays.

Planning for success

In addition to knowing a client’s business and their sector inside and out, it is also important to remember that no two businesses are ever the same. While some tactics and strategies may work for one, they may not translate to another. By getting to know clients, customer service can be tailored to them and their unique needs. Working with TTC for example, we learnt that its travel directors when out in the field, often lack an internet connection. Consequently, they needed to be highly self-sufficient. To achieve this, we developed a bespoke handbook that provided a step-by-step guide to setting up payment devices and solving common issues. On top of this, a dedicated hotline was launched, allowing travel directors to quickly gain help if needed when they did have connectivity. Taking the time to develop tailor-made services specific to TTC and its travel directors, helped provide the agility the business needed and removed pressure from TTC’s internal team.

Of course, before developing a user guide or establishing a hotline a plan needs to be created. Taking the time to meticulously map out the strategy and tactics to support a business is key. Factoring known events or challenges into a plan is vital in getting ahead of them. For instance, as well as navigating the reopening of travel destinations, our work with TTC also meant we had to work around the global chip shortage causing delays in device deliveries. To plan around this, we purposefully pre-ordered additional handsets that could be kept on standby. Then when a request for a new terminal came in, we didn’t have to let the client experience the delays caused by the chip shortage. In doing so we could ensure a smooth flow of devices to travel directors.

With so much uncertainty in the world currently, there has never been more of a need for proactive customer services from B2B suppliers. By building up a knowledge basis of a client’s business, their industry, and then planning and tailoring approaches accordingly, B2B suppliers can help their customers thrive in 2023 while also emerging as true partners. When uncertainty hits as much as we are now seeing, planning, and proactively become more important than ever.

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