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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.

 

Business

How to Build Your Credit Up Safely

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by Taylor McKnight, Author for Compare Credit

 

What Is Credit?
Credit is money owed by a person that allows them to pay off debts at a lower interest rate. Most banks use your credit score to determine how much they should lend you. Any business loan or mortgage requires that you have a good credit history. However, if someone has poor credit(www.comparecredit.com/credit-cards/credit-range/poor/), they may struggle to pay back these loans, resulting in higher interest payments, making it more difficult than ever to repay the debt. Lenders are aware of this issue and keep a close eye on your credit rating to ensure that no negative information gets reported. This could prevent you from getting another loan in the future. It is important to note that having a bad credit score does not mean you have had a bankruptcy or other kinds of defaults. Many people often face this problem because of unpaid bills or late payment fees. However, this does not mean that you cannot repair your credit – it simply means that all parties involved must work together to solve the problem.

How to build your credit safely
Building your credit score is a major concern for most people, especially if they plan to purchase something as big as a home or car. A good credit score will help one get better rates in the future and make it easier to finance their next venture. Here are some things you should know to improve your credit to be used for the best possible purposes.

1. Keep paying down your balances every month: One of the biggest mistakes that could hurt your credit score is not paying your balance down each month. People who don’t pay their credit card down within the agreed-upon time typically have high-interest rates and expensive monthly costs.

2. Pay your bills on time: The same goes for making payments on a bill. Not paying it within the specified timeframe will result in negative information being added to your report, further lowering your credit score. Ensure that your bank statements are accurate and that all accounts are up to date.

3. Become an authorized user: Some companies will allow customers to become authorized users after meeting certain requirements. Take a look at the terms and conditions before applying for this option. These programs usually give access to one particular service, such as checking or ATM transactions, but are helpful when you need additional coverage.

4. Set up automatic credit card payments: There are several ways to set up auto payment options on your credit cards, including sending them directly to your checking account via email or the phone. In addition, you may want to consider enrolling in online banking services that automatically make payments from your checking account into your credit card accounts.

Other tips when it comes to credit
1. Learn how to manage debt responsibly. This is true for both personal and business debts. Many people tend to spend more than they earn, especially during rapid growth and expansion. If you find yourself facing difficult circumstances, you can seek assistance by talking to friends and family members, getting professional advice, or using online budgeting tools.

2. Don’t skip any repayments. This rule applies specifically to late payments. You need to continue making regular payments, even if you’re behind by a few days or weeks. Once you miss a payment, you’ll start accumulating late payments that negatively impact your score.

3. Try consolidating your loans. Consolidation involves combining multiple small loans from various sources into one large loan, thereby lowering the total interest cost of the loan and reducing the risk associated with it.

4. Be wise with your credit report. One huge mistake most people make is neglecting to pay their bills on time or paying only the minimum due balance each month. As a result, bad information remains on their reports, impacting their scores. All outstanding balances must be paid off completely. Otherwise, negative items that remain on your report can keep you from achieving the best borrowing potential.

5. Get your questions answered. If you have any questions regarding your credit, ask for answers now rather than waiting until you’re experiencing trouble. With a little research, you should be able to learn enough to begin repairing your damaged credit report.

What to look out for that can harm your credit
1. Not checking your credit report: Most people use their credit cards frequently but fail to check their credit reports periodically. Checking at least every 12 months can give you valuable insight into whether or not there are errors on your credit.

2. Paying your bills late: Late payments can lead to hard inquiries affecting your score, which means it appears that you’ve applied for more credit elsewhere. Make sure you never miss a bill.

3 You Close Old or Inactive Credit Cards: If your close old cards, they may show up on your credit report for some time. Closing accounts can impact your score by causing “hard inquiries” that appear on your credit report. Before closing them, look for inactive or closed card accounts on your credit report.

4. You Have Negative Records: Many people think they’re protected because they haven’t had past credit problems. However, many factors may cause a “bad” rating to linger. A single application for a credit product with a low limit may count towards a negative review.

5. There Are Errors on Your Report: Mistakes such as missing debt or inflated balances can damage your credit report. Find out how much money you owe and what types of products you purchased, then try to dispute those entries on your credit report. Ensure you correct any information that needs to be corrected. Failing to do so could hurt your chances of getting approved for future credit.

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Banking

2022 ESG Investment Trends

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Jay Mukhey, Senior Director, ESG at Finastra

 

Environmental, Social and Governance (ESG) themes have been front and center throughout the pandemic. While the framework has been surging in popularity for several years, COVID-19 served as a period of reflection causing many companies, investors and other individuals to take these factors seriously. It’s something that we can no longer afford to ignore.

Jay Mukhey

We are witnessing drought, adverse weather patterns, hotter climates, and wildfires with more regularity, raising the profile of the climate crisis. Efforts were renewed at COP26 in Glasgow last November to help address the challenge, with the signing of the Glasgow Climate Pact and agreement of the Paris Rulebook. As a result, we are now seeing record net new inflows into ESG investing and impact.

 

Evaluating ESG criteria

Long gone are the days when ESG issues were at the periphery of a company’s operations. In just a few short years, ESG criteria have become a key metric for investors to evaluate businesses they are considering investing in.

Investor money has poured into funds that consider environmental, social and governance issues. Data from the US SIF Forum for Sustainable and Responsible Investment shows that ESG funds under management have now reached more than $16.6 trillion. It’s not just institutional investors who are embracing ESG, with Bloomberg Intelligence predicting that savers across the world will amass £30.2 trillion in ESG funds by the end of the year.

Due to the multitude of divergent factors that contribute to a company’s success on ESG, it can be tricky to pin down exactly what criteria to measure. Depending on the industry a company operates within, environmental criteria could include everything from energy usage, the disposal of waste and even the treatment of animals.

Social criteria are primarily related to how a company conducts itself in business relationships and with stakeholders. For example, does it treat suppliers fairly? Is the local community considered when the business makes decisions that would impact them? Do they have a statement and policy around modern slavery?

While governance criteria have traditionally been an afterthought, this may be changing. Everything from executive pay to shareholder rights and internal controls are relevant to investors within these criteria.

 

Tracking ESG for competitive advantage

Many experts within the financial services industry point to the power of ESG as a major competitive advantage, if used correctly. It has been noted that increasingly corporations, from big Fortune 500 companies down to small scale-ups, will communicate on their sustainability metrics to grow their business and to attract talent. However, it’s no longer enough to just pay lip service to ESG issues, with abstract commitments increasingly being seen as insufficient. Companies must now quickly progress to concrete objectives that can be measured and tracked.

A wide range of data providers now offer detailed information and tools that can measure ESG performance and effectiveness. Yet major challenges remain around bringing together what is often extremely fragmented data and transforming it into actionable insights.

 

Focus areas for 2022

The ESG criteria that investors measure is by no means stagnant. Complex societal challenges regularly emerge that require the attention of companies. Contributors recognize several topics that demand a sophisticated approach, including the COVID pandemic, diversity challenges and powerful social movements.

Companies operating within the financial services sector face several specific challenges related to ESG, with contributors believing that fintech will also continue to play a central role in finding answers to them.
For example, industry experts expect customers to be more demanding of firms in SME lending when it comes to understanding exactly what impact they are having on the climate. For many financial services firms, 2022 will be the year that they will try to reduce the time it takes to bring ESG products and services to market, such as green loans and mortgages, as well as checking accounts with sustainability and carbon tracking capabilities.

When selecting a service provider, customers are increasingly interested in the ESG credentials of their bank or financial institution. Research from PwC finds that 80% of consumers are more likely to buy from a company that stands up for environmental and governance issues. Consumers are one of the main drivers of ESG and many are putting their money where their mouth is. It’s a trend that’s not going away; financial institutions need to start implementing their strategy for ESG now.

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