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MODERN PAYMENT METHODS ENHANCE DIGITAL SALES FOR INSURERS

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By Farish Lakhani, VP Sales International at Computop

 

Multiple industries are being redefined by digitisation and organisations are transforming their business models and routes to market. In the recovery from the pandemic the hope is that the leap into digital processes will provide new impetus for businesses and ultimately lead to growth and increased sales. The effects have also been clearly felt in the area of digital payment solutions in recent years, and not just in online retail, but in the insurance industry too.

Insurers have long relied on traditional methods for payment with collections for premiums made by SEPA direct debit, or by asking customers to transfer the amounts. The question is that if this has been working without any problems for years, what reason do insurance companies have to modernise their payment infrastructure? The answer is that there are many and here are a few examples.

 

Payment solutions and reports for insurers

As digital payments gather pace, the number of fraudulent chargebacks also increases. Modern chargeback management provides detailed information on how chargebacks occur, allowing insurers to evaluate precise error codes and understand what the reason for the chargeback was. Since the entire process is digital, this discovery process can be carried out quickly and a response put in place immediately. If the evaluation is also accompanied by integrated real-time risk checks, chargebacks are much less likely to occur. Intelligent solutions minimise fraudulent chargebacks, saving the insurer effort and money.

Insurers with large customer bases are also dependent on efficient tools that help them automatically merge transactions and premium bookings, because the greater the volume of data, the greater the cost of analysing it. Equally important is batch handling, a processing method that makes it possible to collect premiums from many thousands of policyholders at the same time.

 

Bringing the end user into the comfort zone

From a customer’s perspective, an optimised payment infrastructure also represents a huge win for insurers. End consumers are used to having the convenience and security of payment methods such as credit cards, PayPal or, more recently, Apple Pay, thanks to years of experience in online retail.

Insurers can benefit from this trend and increase their conversion rates for suitable products by offering a tailored payment mix. It has been proven that consumers who encounter one of their preferred payment methods at the checkout are more likely to actually purchase a product.

The growing number of new types of insurance offers are well suited to this approach to straightforward payment optimisation. For prospective customers who want to spontaneously buy policies for temporary situations, a SEPA transfer is comparatively inconvenient. In addition, insurers face the risk that customers will charge back amounts if nothing has happened. If, on the other hand, they want to take out flight insurance at short notice while traveling, smartphone theft insurance after buying a new smartphone, or accident insurance on the ski slopes while on holiday, the option to pay quickly with PayPal or a credit card are convenient.

A payment solution that allows insurers to offer their customers an optimised checkout with suitable payment options is worth its weight in gold. Solutions that allow them to activate and deactivate payment options swiftly and easily are particularly attractive to providers. This enables them to respond rapidly to changes in payment preferences and to easily optimise the payment experience for the customer.

 

Bill payment has never been easier

But what if a policyholder has not paid the premium on an insurance policy that has been in force for a long time? If they simply forgot, that can be an uncomfortable and stressful situation for the customer. Modern payment solutions can assist. Thanks to QR codes and payment links, they can conveniently pay the outstanding amount from an email sent to them by the insurer. All it takes is a click on the payment link and the customer is taken to a payment page that offers them all the options and payment methods they want.

This simple solution has been proven to result in a faster and more positive response to payment requests and reminders with no additional implementation effort on the insurer’s website.

Such a smart approach can also be used in other contexts, such as upselling or cross-selling insurance products. The goal is always to minimise the hurdles for the consumer and maximise convenience.

 

More than SEPA: recurring payments

Of course, the main business for most insurers is recurring payments. Here, too, it is worth keeping up with progress. So-called recurring payments have long since ceased to be the domain of SEPA direct debits. Credit cards can also offer this service. But to do so, insurers must be able to store the data in their own system. This can only be done in a data protection-compliant manner via PCI DSS certification in tokenized form.

A payment service provider like Computop solves this problem, because it can encrypt the sensitive credit card data in such a way that only tokens, in other words substitute numbers, are stored on the servers. The advantage is that these numbers are worthless to criminals in the event of data leaking into their hands, so they protect the customer and the insurer from fraudulent use.

The PSD2 payment services directive also imposes high requirements on the technical processing of “recurring payments” so they can be executed without re-authenticating the customer when the contract is renewed. This creates appealing alternatives to the SEPA direct debit, which offers consumers added value in many respects.

When it comes to insurance, digitisation is about so much more than just the transformation from branch insurers to direct insurers. Instead it supports a new way of delivering products and services, without any detriment in terms of security, and creates the foundation for greater customer satisfaction and, ultimately, closer customer loyalty and rising sales.

 

Finance

THREE STEPS TO ENSURE RECOVERY OF COVID LOANS GOES SMOOTHLY

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In the wake of the pandemic, the government acted quickly to provide financial Covid support packages to help struggling businesses. With the economy now recovering, Mike Hampson, CEO at Bishopsgate Financial explores the range of options available for banks to ensure that those loans are repaid.

 

Since the start of the pandemic, businesses have raised over £75bn[1] from banks and financial markets, through interest-free emergency support schemes. But the harsh reality is that not all loans will be honoured as the economy recuperates.

As a result, banking professionals with client relationship management experience and skills in supporting clients to repay loans in a challenging business environment, will be in high demand.

 

Mike Hampson

Setting up training capabilities for client support post-pandemic

Commercial bankers estimate 60% of new coronavirus scheme loans[4] will default or suffer other repayment issues that will drive previously unseen levels of non-performing loans. It’s a tough balancing act and one that demands careful management of the lending transaction lifecycle, from origination through to collection, recovery, and handling bad debts. Banks no doubt already have frameworks in place to manage these elements, but it’s highly important to make customer interactions as easy as possible and ensure their genuine concern for their customers is clear.

Subsequently, hundreds of workers at major banks including HSBC, NatWest and Metro Bank[5] are understood to be receiving training in how to deal with vulnerable customers and “demonstrate empathy” as the first wave of repayments for coronavirus loans fall due. Staff ‘sensitivity[6] training builds on client-support and workout capabilities, such as improving sensitivity to early-warning systems, developing short-term forbearance solutions and loan modifications, and providing guidance on alternative products.

This approach may further avoid the additional pressure on the UK’s mental health crisis as financial institutions prepare to call in loans issued during the pandemic.

HSBC, which now has 400 staff in its debt collection team,[7] said the aim was to ensure staff had a “consistent understanding of vulnerability” and are “aware of the factors that could make an individual vulnerable” when having repayment conversations with customers.

An executive at another bank said its expanded debt collection team was being trained in “empathy, vulnerability and listening skills”. The individual told The Telegraph: “Ultimately, we don’t want to damage the economy by being overly aggressive.”

A peculiarity of a crisis situation is that customers don’t always know what they will need until that need is pressing. Finding that their bank is prepared to help in unexpected ways will go a long way toward reassuring them.

[2] https://www.law360.com/articles/1355897/

[3] https://www.bishopsgate-financial.com/insights/the-change-perspective/the-change-perspective-2021

[4] https://www.grantthornton.co.uk/insights/how-to-manage-upcoming-non-performing-loans/

[5] https://industryslice.com/NewsLetter/8_33

[6] https://www.telegraph.co.uk/global-health/climate-and-people/covid-19-has-amplified-parallel-pandemic-poor-mental-health/

[7] https://www.msn.com/en-gb/money/other/bank-staff-get-sensitivity-training-before-calling-in-covid-debts/ar-BB1fNMte

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Finance

FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

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Marieke Saeij, CEO of Visma | Onguard

 

It’s clear that Intelligent Automation (IA) is still very much an emerging technology, with one indication being that is has only been mentioned a handful of times on Twitter since the beginning of 2021. Results from our latest annual FinTech Barometer reveal a mixed picture in terms of awareness, with half of finance professionals having never heard the term before. Whilst this is unsurprising for a technology concept very much in the ‘early adopters’ stage, organisations can stand to gain real benefits from embracing Intelligent Automation now, particular within the finance department. With this in mind, we explore some of these benefits and share a step-by-step best practice to implementing it into business operations.

 

Intelligent Automation ensures a predictable order-to-cash process

Such is the speed of introduction of new technologies that it’s a challenge for businesses to keep pace. As the newest innovation in finance, Intelligent Automation is one that organisations can’t afford to let pass by. It truly takes financial process automation to the next level. In addition to helping maintain a high-quality customer service, it also complements the existing skillset of finance professionals in the industry.

Marieke Saeij

While Robotic Process Automation (RPA) and Big Data are key innovations for the sector, IA can be likened to an additional layer that enhances existing technologies. By combining applications, this layer is capable of independently assessing situations and determining the appropriate process sequence. It can, for example, fully determine the risk of a specific customer, and can also predict at an early stage which invoices will be paid late, or even not at all, ensuring that finance professionals can then plan accordingly. The result is a reliable and predictable order-to-cash process.

 

The four steps to an IA-proof organisation

While the benefits of IA are numerous, implementing the technology can prove complex, although some are already treading the IA path without knowing it. In this instance it’s crucial to become aware and begin the purposeful process to full integration. Below are the four key steps to becoming fully IA-proof.

  1. Exploring the potential: Brainstorm where automation can be applied

Step one is to examine the extent to which automation can help your organisation. Blue sky thinking is the key here. What is the ideal relationship with the customer? What does the ideal order-to-cash process look like? In this phase, involving multiple departments from within the organisation is key, from management to operations. The finance professionals who have the most contact with customers are likely to have the strongest knowledge of which processes they would like to see automated. With no limits to ideas, it’s best to explore all the opportunities in the entire order-to-cash process and describe broadly the potential value to the organisation.

 

  1. Decipher which data and technology is needed

The second step is to map out which data and technology is required. Working with a specialist, either external or from the internal IT department, is beneficial at this stage to see where the opportunities lie. In many cases, off-the-shelf solutions are already readily available to help make the difference, so it pays to do the research and gain advice where possible.

 

  1. Firm up the strategy

With the plan mapped out, it’s time to fit the pieces of the puzzle together. Which technology and accompanying software is proving most valuable? It’s vital at this stage to analyse the results the organisation is achieving from deploying the right technology and software. It’s also important to outline any limitations and emphasising the potential risk of failure. This is the business case and the basis for the elevator pitch that will be presented to internal stakeholders.

 

  1. Draw up the roadmap and start benefitting from agility

The fourth and final step is prioritisation. The roadmap will describe step-by-step how to move from the undesired current situation to the desired end goal. In the first step, choosing a subproject that is relatively easy to achieve will help gain support from other departments within the business, and provide invaluable experience that can be applied to the more complex components that follow later. This agile approach facilitates a learn-by-doing mindset and allows the following steps to be tackled in a smarter and simpler way.

 

Effective preparation is half the battle

Exploring the potential of automation, mapping the required data and technology, establishing the strategy and laying out the roadmap are the four crucial steps to ensure the foundation for Intelligent Automation. Effective preparation and estimating which technology and accompanying software is needed will help to create a streamlined and error-free order-to-cash process. To ultimately save time and costs, empower finance professionals and maintain customer loyalty, the time for Intelligent Automation is now.

 

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