If your company handles insurance-related customer interactions, it’s time to consider Artificial Intelligence (AI). As industries go, the insurance sector is actually very advanced when it comes to AI adoption; in fact, a recent Microsoft report showed that nearly three-quarters (72%) of banks, insurance firms and other financial institutions are using such technologies.
While awareness and pilot implementations within the industry are definitely on the rise, there are still many executives that are still struggling to identify the best applications for their business. Indeed, almost 40% of all practitioners who have not yet invested in AI don’t know where AI can be used in their business, according to Deloitte.
To explore how AI can enable better customer interactions for insurers, we explore three key considerations for insurers that are thinking about implementing AI for customer services.
What service do I want to provide?
The first hurdle for any business when determining whether AI can improve customer interactions is deciding what level of service they want to provide. There are a number of different types of digital assistants on the market – and not all bots are made equal.
Insurers can easily find themselves comparing apples and pears when looking at AI solutions. So, it’s critical to start by looking at the different available solutions – from static chatbots, to cognitive AI agents – to consider the benefits of each solution and determine which can deliver the best experience to their customers.
Cognitive agents use advanced Natural Language Understanding (NLU) to navigate complex and foreign words and phrases to converse with customers. Unlike static chatbots, cognitive agents go beyond words to determine user intent. Once they determine a customer’s intent or intents, cognitive agents can handle multiple contexts within one conversation. This delivers a more complex, prolonged, and multi-stage conversations.
Cognitive agents can also be trained to gain a specialised understanding of a certain marketplace, and adapt to the role, so they can respond to customer questions across a wide variety of subject areas, including renters, property, marine, auto, and life insurance.
Chatbots don’t offer this level of sophistication. They operate from programmed scripts that allow them to complete basic tasks. If customers veer from this script or use language that is foreign to the chatbots, it will immediately escalate the transaction to a human colleague. This extends the interaction unnecessarily and creates a frustrating customer experience.
Finally, many customer engagements for insurers come at difficult moments in their lives. They may have just been burgled, a relative may have died, or they could have just had a car accident. It’s therefore important for any automated solution to recognise and react to the emotional state of the customer. Some cognitive AI agents also have emotional intelligence built in, allowing them to understand the customers’ tone and mood throughout the interaction. This enables it to display empathy and detects sentiment in order to reassure customers with appropriate phrases and comments when needed.
How can a cognitive agent help?
Every deployment of a cognitive agent is unique, so insurers need to think about the best way that a cognitive agent can help them and their employees. Here are just a few ways that cognitive agents can be deployed in an organisation:
Always-on customer care
Cognitive agents’ services can be delivered across multiple channels (web, phone, text, chat, etc.) 24/7/365, providing limitless support capacity. This ensures a customer never waits long for quality service even during spikes in customer call volume.
In fact, IPsoft’s Amelia’s transactional processing and scaling ability has enabled insurers to reduce their support costs by up to one-third and reinvest those savings back into the business. Because of her scalability, transaction and support resolution, times are drastically reduced. She can also reach accuracy levels in excess of 95% in managing certain conversations and policy transactions.
Cognitive agents are expert at gathering, verifying, and processing customer information. When customer facing, this enables them to have natural conversations with customers about insurance needs and personal habits in order to offer policy information and quotes.
With their deeper industry understanding and ability to engage in a real dialogue, Cognitive AI agents can make recommendations and execute transactions faster than humans with a personalised touch. This typically eliminates the need for a customer to visit an agent’s office or make a support call, as the cognitive agent can handle most frequent customer queries and transactions, such as incident registrations, policy recommendations, deductible and payment inquiries, rider recommendations, and a whole lot more.
The whisper agent
Cognitive agents’ ability to learn and improve over time helps them collaborate with human customer service colleagues, unlike static, low-level chatbots.
Non-licensed agents are not permitted to advise on or sell certain products and services. When those agents receive a call and need to service a customer, they can quickly interact with the cognitive agent behind the scenes and determine whether they can assist that customer. If they can, the cognitive agent uses its knowledge to coach the agent through the customer engagement; if not, the cognitive agent helps the human agent refer the customer to a colleague who can.
In the end, the customer receives correct information and an efficient service experience, the agent is confident that they’ve done the right thing, and the company knows their employees are complying with all proper and legal procedures.
With their advanced analytics, cognitive agents can also analyse a customer’s submitted information and help human agents determine whether the data is up-to-date and accurate. This then allows them to make recommendations on whether a policy should be issued, for what amount and at what premium level. As knowledge is accumulated over time, cognitive agents are well placed to recognise anomalies that may indicate fraud and report them to their human colleagues.
Does it really work?
There’s no question that cognitive agents hold all the promise for better customer interactions in insurance. But the million-dollar question is “does it really work?”.
One large insurer seeing the benefits of using cognitive agents to support their customer interactions is Allstate. The largest publicly held personal lines insurer in the US, Allstate first deployed cognitive AI agent, Amelia in September 2017. She has collaborated with Allstate live agents on more than three million calls. She leads agents through step-by-step procedures on a variety of support issues, including policy details and policyholder information.
Trained on almost 50 different insurance topics for Allstate, Amelia has lowered call duration from 4.6 to 4.2 minutes and 75% of customer inquiries have been solved during the first call, compared with 67% prior to Amelia’s hiring. In one month alone, Amelia assisted on almost 250,000 calls. Also, 99% of Allstate agents who worked with Amelia said they were completely satisfied with their interactions with her.
What are you waiting for?
Cognitive agents are a proven, enterprise-ready and scalable solution that are taking insurers’ customer interactions to the next level. Those insurers that have already invested are taking advantage of the competitive edge that it has given them against other companies that are hesitant about making investments in AI.
But given the current market trends and shifting consumer tastes, it won’t be long before customer expect and demand the always-on and superior service that cognitive agents provide both directly and behind the scenes. The hybrid workforce of human and digital agents is the future of customer engagements, so now is the time for insurers to investigate and invest in AI is now.
THE FUTURE OF CUSTOMER EXPERIENCE IN DIGITAL BANKING
By Richard Billington, Chief Technology Officer, Netcall
Over the past five years, the digital banking revolution has had a seismic impact on the relationship between customers and the institutions that handle their money. Since digital banking established itself as the new norm for consumers, there is now a growing expectation for enhanced levels of convenience and security. Recent proof of the evolution has come from Lloyds Banking Group, which recently announced the closure of 56 branches, as an increasing number of customers ditched branch-based banking in favour of online platforms.
Banks are trying to adapt to rapidly changing behaviours by integrating their services seamlessly into their customers’ daily lives. However, whilst offering new opportunities for banks to reach and respond to customer needs, the digital realm also presents an increasingly competitive playing field, with challenger banks constantly entering the market. We are continually hearing of new banking brands offering cash incentives to encourage customers to switch banks. This tug of war is putting increased pressure on banks to outdo one another, in order to retain customers and foster long-term loyalty.
Short-term cash incentives, however, will be spent in vain if a company’s long-term digital experience is not up to scratch. Lost customers mean lost revenue, a negative impact on brand reputation, and market share attrition. In order to gain and maintain a competitive edge, banks must understand what consumers expect online, and then meet those expectations.
Getting ready to compete with the Amazon Effect
Whilst it is clear that ‘digital’ is the direction in which the industry is heading, traditional bank brands have a long way to go to satisfy consumers who want to manage their money on their phones and tablets. Today, the so-called ‘Amazon Effect’ is impacting more and more areas of our lives, and digital banking is no exception. Modern customers require instant gratification. They want to see where their package is at any stage of their delivery and, in the same vein, become frustrated if they can’t see how things are progressing with their finances in real-time.
Customers want to stay up to date with changes on their bank accounts. They want to apply for an ISA, mortgage or credit card without hassle. They want to be able to understand where they are in the process. And, most importantly, they want an experience that is unique, personalised, and available at a time convenient to them. Today the onus is on banks to deliver these experiences – ensuring interactions and processes are quick, convenient and streamlined. Those who don’t live up to these expectations risk failure in a highly competitive marketplace.
Failing to connect the dots
Despite the changing customer needs and demands when banking online, all too often customers are faced with a series of disjointed communications, leaving them dissatisfied, confused and frustrated. To solve this, many banks invest in customer-facing departments – marketing, sales and service – but the reality is their customer experience doesn’t just depend on the people dealing with customers every day. It is heavily influenced by processes and technology, the people behind the scenes – the IT team.
For many banks, there’s a huge gap between customer facing departments and IT – what we refer to as the ‘customer experience disconnect’. This means that when someone in the contact centre flags a broken process that only technology can fix, their request often gets ignored. That’s not because IT doesn’t care; it’s because they have a thousand and one other things to do. Realistically, they can’t drop everything to solve one small problem.
But when it comes to customer experience, small problems add up. If a customer can’t apply for a mortgage because an app is broken, that’s annoying. When they can’t get through to customer services because the lines are busy, that’s infuriating. And when they don’t receive a response via email, that’s… well, that may very well be the end of the relationship.
Enhancing customer engagement online
Digital transformation in financial services goes beyond just providing an online or mobile account-opening solution. Banks should build a process that connects with the customer before an account is even opened and continues throughout the entire online journey. This includes enabling tailored communication at optimal times on preferred device(s). Every customer touch point should collect insights that the bank can leverage for future communications, to foster brand loyalty and make it harder for businesses to be undermined by competitors.
Done well, digital engagement should not just represent a great communications process, but also reflect changes in the back office that simplify all stages of engagement. Most importantly, these stages should connect seamlessly across communication channels, eliminating the need to visit a branch and enabling consumers to switch between channels, such as telephone, email, social media and in-branch banking, when desired.
As the UK continues to move further towards a cashless society, which is now expected by 2030, getting digital banking right is only going to become more important in order for banks to remain competitive. And to ease the transition to digital banking while maintaining customer loyalty in the digital realm, banks must overcome customer experience disconnects and enhance digital engagement.
Creating an effective digital banking experience
At the moment, departments within banks are operating in silos. This needs to stop if businesses want to create a successful digital banking experience. In order to build trust, long-term relationships and help solve any digital experience problems, it’s important that banks start by bringing customer-facing and IT teams together.
Low-code software solutions can prove invaluable in this instance, helping to accelerate digital customer experiences whilst also enhancing efficiencies within the business. Due to their simplistic nature, these offerings can be integrated across departments and be used by non-experts and developers alike. Well-established banks with bigger IT teams can also benefit, as low-code software solutions work alongside existing systems, significantly helping to improve customer experience quickly and without the need to replace existing infrastructure at a high cost.
In our rapidly expanding digital world, businesses face more pressure than ever to pivot in response to market changes and customer expectations. Therefore, having access to tools that are easy to use whilst enabling innovation will be key to building a better digital customer experience. In addition, analytics tools can also help track performance and offer insights for process improvements and adaptations. Implementing these tools will help empower businesses to remain competitive in today’s rapidly changing banking industry.
BRAVE NEW WORLD: A FUTURISTIC VISION OF PAYMENTS
James Booth, VP, Head of Partnerships in EMEA for PPRO
Over the last ten years, the retail e-commerce ecosystem has undergone a wide-ranging transformation. As recently as 2010, the e-commerce and payments value chain were relatively straightforward: Any eCommerce merchant could integrate a payment processor’s front-end HPP into their checkout or perform a deeper API integration for a customised checkout experience. The customer then enters their card details or other bank details, which were passed on to payment platforms and schemes for processing.
In 2020, we are now well into the era of open banking, and things look very different. The volume of payments has exploded. By 2018, global digital payments were worth US$3,417.39 billion, and are expected to increase to US$7,640 billion by 2024. Using integrated real-time payments systems — which incorporate everything from authentication through settlement to confirmation — consumers send and spend money in the blink of an eye. And the speed and volume of transactions are made possible by the increased use of technology and artificial intelligence to do everything from risk assessment to anti-fraud measures.
But this very visible — and much written about — transformation is not the only way in which the payments and e-commerce landscape has been changing beyond recognition. Because while e-commerce over the last ten years has gone increasingly global, the way people pay online is more than ever local. In some markets, low rates of financial inclusion make cash-voucher schemes the best option. In others, bank-transfer apps are the most popular.
Our research has shown that between 2017 and 2019, the number of UK online transactions paid for using a bank transfer increased by 36%. Driving the use of bank transfer payment methods by UK consumers to now account for 8% of all British online transactions, with cards and e-wallets, including PayPal, leading the race. In fact, card payments account for 56% of transactions, followed by e-wallets (25%), bank transfers (8% ) and lastly cash (7%).
Some markets prefer e-wallets or primarily use locally issued credit cards. In the Nordics, deferred payment methods are becoming the norm. And in countries such as Germany, most online shoppers prefer via direct debit.
The result is a global online and digital payments market that is now incredibly diverse. And even more complicated. Even markets right next door to each other may have very different payment preferences. In Latvia, for instance, 49% of online transactions are paid for using a credit card . In neighbouring Lithuania, it’s just 24%.
Globally, by 2021, only 15% of all transactions will be paid for using the brands of credit cards familiar to most Western merchants. That number is only set to decrease. Today, local payment methods account for 77% of e-commerce spend; by 2024, it is forecast that this share will increase to 82%. There are an estimated 450+ significant local payment methods worldwide, so considering the UK mostly rely on PayPal and card payments, there is a big world of alternative payment methods the British public are yet to realise. To truly go global, merchants don’t just need break down language barriers, but also payment barriers.
Already, Klarna, one of Europe’s most popular bank-transfer and pay later app, processes €53.4 billion in online payments every year. Merchants operating in or entering Europe which doesn’t support Klarna are effectively saying that they’re not interested in any part of that €53.4 billion. And this situation is not unique; it applies to markets throughout the world.
Local payment methods, as they drive financial inclusion, will only proliferate.
When we look forward to the state of e-commerce in 2030, a personalised shopping experience is not a nice-to-have. It is an absolute requirement. Consumer preferences must be noted; if they aren’t, retailers will miss out on sales. Almost half (47%) of UK consumers will end a transaction if their preferred payment method is not available, according to PPRO research, so customising payment options for cross-border shoppers is vital. This is highly important to attract international customer bases beyond a retailer’s local remit. It’s no longer adequate to offer customers one single way of paying – in-store or online. Payments aren’t a one size fits all approach.
The best brands do this already. Those who don’t will struggle to make it to 2030.
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