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Insurers get personal to address the changing industry and customer landscape

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Udi Ziv, CEO, Earnix

 

While the insurance market has historically been very stable, with a tolerance for only gradual change, this is no longer the case. Changes in technology, consumer behavior, and claims cost demand faster evolution. It’s clear that the insurance industry is at a crucial inflection point.

Even though widespread adoption of Usage Based-Insurance (UBI) was not quickly realized soon after its introduction decades ago in the 1990s, it was the first big shift in the industry. When a mature and famously conservative market starts to undergo change, the instinct is to hold tight, not march toward new technologies or processes.

After many months of remote working and quarantining, consumers started questioning the need to pay the same amount for car insurance when they were not driving nearly as often. When insurers started seeking ways to satisfy the changing demands of consumers, it resulted in an ineffective and incremental re-engineering of how the insurance sector already does business.

With that now in place, 2022 is the year for carriers to address the connection between business processes and the technology. It doesn’t matter how smart, hardworking, and innovative a team of actuaries, underwriters, or data scientists is if they are challenged with poor processes or legacy technology that can’t keep up with market changes and customer demands. Deployment of dynamic pricing and personalized solutions is the key.

 

Right time, right place, right policy

A hyper-personalized, ready-when-you-are Netflix type experience has become the standard expectation for everything – even insurance.

To address this, carriers must find a way to marry the strength of their deep knowledge and expertise with today’s technology to ensure they provide fully personalized dynamic offerings that customers require. A key step forward will be deploying advanced analytical tools, business processes and technological infrastructure to respond swiftly to market changes. This will provide improved understanding of customers’ goals and offer the capability to quickly and efficiently develop the right insurance offer to meet their needs, at precisely the right time.

To achieve this, insurers must quickly model complex scenarios to improve decision-making, and develop the perfect product at the perfect price.

 

Insurers innovate to accelerate products and pricing

Agility is precisely what insurers need today to become faster, leaner, and more effective in addressing current and future market and consumer changes. IT and Business functions are being challenged to create highly personalized offers more efficiently with fewer resources. According to a McKinsey study an agile approach will allow insurers to launch new products or update new pricing models up to five times faster and boost customer experience. Many insurers are limited by legacy IT systems, which can stifle innovation. However, technological, and operational challenges can be overcome by adopting composable and agile technologies, that sit on top of the legacy IT systems, and are designed to digitally transform businesses. This enables insurers to model prices and deploy policies in a much shorter timeframe with significantly lower investment.

The right process and technology are key for innovation. Therefore, it is crucial carriers address the connection between business processes and the technology that supports them. According to Strategy Meets Action “insurers will need modern platforms that can plug and play with different channels and absorb new data sources”.

The opportunities already exist with instantaneous access to better, more comprehensive data coming from devices providing IoT and telematics data. But an IoT device, or any data source for that matter, cannot provide value on its own. It must be incorporated into business processes to provide sources of innovation in pricing, rating, etc. Automation can also accelerate data collection and data processing, speeding up processes, eliminating errors and reducing time to market to weeks and even days. For example, when it comes to UBI and pricing processes, insurers are running telematic data with machine learning and artificial intelligence models to offer personalized policies instantaneously.

 

A new policy for success

Analytics offers a powerful competitive advantage in modeling highly complicated scenarios to stay a step ahead of changing market dynamics and customer needs. Depth of insight and automation via process systemization gives pricing and product professionals the power to make decisions quickly. With the ability to make pricing and product business decisions quickly, efficiently, and accurately, changes that need to be deployed, whether price or product related, can be done rapidly – improving overall organizational agility.

The past is the past, today we’re seeing insurers implementing intelligent, composable, and agile technologies. As they do, they are reaping the benefits of developing and deploying new, highly targeted, personalized offers – faster than ever. This bridges the gap between what insurance companies need for their book of business and what consumers demand.

 

 

 

 

 

 

 

 

Banking

The importance of Customer Experience (CX) for retail banks today

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By James Isaacs, President, Cyara

 

Today’s retail banks face considerable challenges. Open banking initiatives –  that make it easier for customers to switch accounts – and increased competition from emerging fintech brands, are making it harder for them to attract and retain customers. This challenge is particularly acute for traditional banks which are seeking to attract younger people, who are drawn to the range of innovative services offered by digital-first emerging ‘neo’-banks.

To stay competitive, traditional banks must improve the customer experience  they offer account holders. They also must look for more efficient ways of working, so they can service all customers in a consistent way, regardless of which banking channel they use – whether it’s banking online, at a physical bank branch, through a contact centre, using a mobile app, or (most often) using a combination of all these channels.

The challenge of consistency

The argument for an omnichannel strategy is compelling. Fuelled by the pandemic, demand for digital banking services has grown. McKinsey suggests that 71% of European banking clients prefer multi-channel interactions, whilst 25% express a desire for a fully digitally-enabled private banking journey with remote human assistance when needed.

The delivery of such systems, however, is not without its challenges. Embracing omnichannel often means transitioning to a cloud-based infrastructure – away from the legacy on-premise systems prevalent in banks. Even when this hurdle is overcome, delivering banking services through multiple channels requires a significant investment of time and resources. Due to these common barriers, many banking CX projects fail to get off the ground.

James Isaacs

At the other end of the scale, there are the banks who have sought to implement numerous channels to cater for every possible customer demand, with varying degrees of success. The key to the delivery of a stellar CX is consistency – ensuring that every stride a customer takes in their journey is seamless, irrespective of the path or the channel they choose to take. The chance of ensuring a consistent service across all these channels is negatively impacted if organisations attempt to simultaneously deploy services to mobiles, website, in-person channels, messenger, chatbots, contact centres, alongside the adoption of newer open banking services.

Selectiveness is key

Organisations looking to optimise CX through the adoption of an omnichannel strategy are therefore advised to be more selective in their approach – adopting one or two new channels or approaches before expanding their omnichannel offering further.

An ideal starting point for retail banks is to look at automation within the customer journey. When applied correctly, automation can be used to help improve customer service in a way that also delivers efficiency gains.

The power of automation

Automation can have a significant impact on the CX delivered within retail banking, which saves valuable time for the customer and enhances the customer journey. Most customers getting in touch with their banks have fairly routine queries, such as a change of address, so the need to speak to an advisor is often unnecessary.

Automated customer-facing support solutions, such as chatbots, offer a faster way for customers to self-serve and secure the answers that they need to certain problems without having to phone an agent. Chatbots are programmed through a knowledge bank that can easily be updated with new information, enabling customers to source the information they need quickly and easily. Chatbots can also be used to direct customers to an agent if they are unable to resolve the issue.

For those customers who do still need to speak to an agent, there are Interactive Voice Response (IVR) systems, which capture information from a customer when they call into the contact centre. IVRs help customers complete simple tasks themselves and route them automatically to the right department. This directly reduces average call handling time (AHT) for agents and the length of time that a customer is on the phone.

The importance of automated CX testing

Yet, offering omnichannel and automated journeys is not enough to satisfy customers. These journeys must be flawless if they are to deliver a seamless customer experience. Forward-thinking organisations understand that the only way to assure perfect execution is through adopting automated testing that places a spotlight on the omnichannel customer journey from the customer’s perspective.

Automated testing can be enabled by leveraging an intuitive testing solution that develops test cases based on existing customer journeys. Retail banks can use automated testing to track various paths through IVRs, chatbots and then base test scripts on those journeys to ensure their flow or functionality is as it should be. Using this strategy, financial organisations can create thousands of automated test cases that cover the full swathe of customer journeys, shortening testing operations to a fraction of the time of equivalent manual tests.

While automated testing provides easily measurable benefits, certain alerts flagged by automated testing are more critical than others. Distinguishing a true failure that requires immediate action as opposed to failures that can be addressed in time is essential to achieving the true return on investment (ROI) of test automation. In doing so, banks can ensure that the customer journey remains smooth, and the CX delivered remains outstanding.

The path to good CX is paved with automated testing

Delivering omnichannel services for banking is key to satisfying customer demand. However, whether it is the delivery of a chatbot, IVR or an open banking model, retail banks are well advised to stagger the roll-out to ensure the delivery of a consistent service to customers. Automation plays a critical role here – both in the delivery of omnichannel services to customers, but also ensuring its ongoing success through rigorous, frequent and automated testing.

Financial organisations that want to remain frontrunners in the market will stand out against the competition by delivering stellar digital and in-person experiences for customers. To assure high-quality CX, walk in the shoes of your customers, testing their customer journey in each and every scenario to confirm there are no cracks in the road. Of course, there may be bumps along the way, but when those are addressed in a timely manner, retail banks will continue to attract and retain customers for the long haul.

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Business

Why do Traders Need a Managed Service Partner?

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Jeff Mezger, Vice President of Product Management, Financial Markets, TNS

 

Does your financial institution have the understanding, resources, talent and bandwidth to execute an effective data center strategy in-house? If not, it needs to, as behind every transaction is a labyrinth of algorithms and networking infrastructure technology that converge in one location: the data center.

For most, the answer will be ‘no’. There will not be the resource or skill in-house to keep ahead of the maze of technical and logistical options to execute the fastest and most profitable trades. Trading success requires accessing extremely powerful servers, with the best data lines and connections close to where the trade is physically taking place. Processing close to the source of the input data provides the lowest possible latency between input and response – and speed matters. Milliseconds can mean the loss or gain of millions of dollars.

 

Latency Matters

Low latency is vital for algorithmic trading. Many factors affect latency, especially hardware location and network connections. Trade execution speed is critical in maximizing profit and loss, and a competitive advantage comes from having the best communication links to hardware in the best location.

TNS’ ultra-low latency Layer 1 technology for exchange direct access inside the data center was the first architecture of its kind to be offered and deployed globally and remains the most advanced solution in the market. It eradicates the need for multiple switches by using a simple, single-hop architecture to deliver direct exchange connectivity in as little as 5 to 85 nanoseconds – impressive when you consider that the human eye takes 400 nanoseconds to blink!

So, acknowledging that speed and colocation are vital for executing a trading strategy, what can firms do to underpin trading success? Many will outsource operations to a specialist managed hosting, colocation and connectivity service provider.

 

In-house vs. DIY

A recent independent report Colocation of Financial Markets Trading Infrastructure’, identifies the pros and cons of in-house management (a “DIY” approach) versus a managed service model. The report found that managed service providers offer beneficial value-added services for capital markets clients. Advantages include cost savings, trade efficiency, and simplified access to data and network infrastructure support, enabling trading firms to focus on their core business competencies. Industry analyst firm, Celent, which authored the report, interviewed trading firms and data and trading technology providers and found that the key decision criteria when deciding to engage a managed service provider included:

  • Consultation and expert advice on the ideal configuration of hardware, network connectivity, location, data feeds and network bandwidth.
  • Agility and flexibility to take advantage of ever-changing investment opportunities by rapidly and easily deploying trading strategies in new markets.
  • Access to high-end network services, leveraging high-speed solutions, including ultra-low latency, in-data center Layer 1 connectivity to link to trading venues, new customers and other service providers.
  • Operational efficiency and future proofing, with access to the latest technology, and highly experienced staff in all global jurisdictions who help to navigate cultural, linguistic, and regulatory obstacles.

 

Challenges

Managed Service Providers offering remote data center space and connectivity are on a quest to deliver a uniform global experience to ensure trading in, for example, Singapore or Tokyo is the same as trading in London or New York. They are also constantly investing in technology and new locations. For TNS, this means responding to customer requests to deliver a service in any location, most recently announcing a managed hosting and colocation offering in Madrid.

On rare occasions, perhaps instigated by political or economic events, firms may need to move from their existing data center location, as seen recently when key exchange, Euronext, relocated its primary data center and related colocation services from Basildon in the UK to the Aruba Global data center IT3 in Bergamo Italy. Such a physical move is a big undertaking and firms need differentiated support and solutions to ensure that they can seamlessly move and trade continuously, regardless of their size, requirements and the exchange location.

So far, TNS has moved nearly 20 existing and new customers to Bergamo, providing traders with uninterrupted, seamless trading. Our customers have been able to focus on their core business while we have managed the global supply chain issues to ensure a smooth migration. With suppliers quoting lead times of a year for some equipment, our buying power compared to smaller firms or those attempting to DIY a move, has proved invaluable in ensuring a smooth transition.

 

Future-Proof

Firms need to future-proof their trading infrastructure by working with a provider that has experience in managing access to vast amounts of raw market data, can support multicast requirements and is able to offer scalable solutions to accommodate the demands of ever-expanding bandwidth. As traders diversify their portfolios, their market data needs can place excessive network capacity pressures on their infrastructure, sometimes running into tens of gigabits. Seek a provider that can easily accommodate these requirements and handle data bursts during high activity periods, such as those seen on many recent occasions due to market volatility caused by political and economic events.

 

 

 

 

 

 

 

 

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