It’s clear that digitalisation is here to stay. Technology has completely changed the way customers shop, and companies are now held to a certain standard when it comes to the payment experiences they offer. The insurance industry is very much centred around paying out to their customers, so it is that payment experience that customers use to evaluate their services and, ultimately, to stay loyal to the company or to look for the same service somewhere else.
Whilst it is no news that insurers need to keep up with technology, they simply aren’t quick enough to adopt new technology and processes. In this article, we will synthetise how insurers can embrace payment digitalisation and make fruitful changes for their business.
Customers are at the heart of any product or service, and their feedback is invaluable for upgrading products or developing new ones. But the product isn’t the only thing that needs to suit customers’ needs: the whole buying experience is equally important. Customers want seamless experiences both when paying out to their insurers or when making a claim, and the insurers that listen to their customers’ needs and enhance their processes are the ones likely to win in the long-run.
Traditional insurers have reputation in their favour. They have been servicing customers for many decades and are a household name that the average person recognises. But reputation doesn’t seem to be enough anymore. In order to stay relevant, they must adapt. It’s the customer that dictates the rules, and the market just follows.
Customers’ needs are simple when it comes to their payment experiences: they are looking for convenience, personalisation, speed and ease, all of which is centred around technology. A cheque that arrives in the mail five weeks after it was initially claimed simply isn’t as effective as a gift card that customers can easily add to their mobile wallets. As difficult as it is for insurers to completely change processes, it is extremely necessary. It all starts with listening to customers, finding out exactly what they want, and focussing on implementing these changes.
Optimising internal processes to enhance efficiency is as important as offering a more digitalised customer experience. Think of auto-reconciliation tools to speed up the traditional reconciliation process that involves a lot of resources, takes a lot of time, and is naturally prone to manual errors. Equally, transaction analysis tools are key in getting valuable insights into customer behaviour and trends. Knowing your customers’ preferences isn’t just important for the payments area. Marketing, for instance, is an area that focusses deeply on understanding the customer and tailoring the message to them.
By digitalising some of these internal processes (or, ideally, all of them), and investing into make your payments system easy to use and easy to understand, you can decrease costs and accelerate profit. However, traditional insurers generally don’t have a payments team dedicated specifically to this business area, and they don’t have the industry expertise to navigate this area either. Building a payments team isn’t on top of insurers’ priority list, as there are many other critical business areas to focus on. However, it is still an essential part of the business, and one that requires frequent upgrades.
Open banking has opened up the doors for new market players to collect their fair share of customers, traction and competitiveness in the market. Challenger banks have reaped the benefits of open banking and gained popularity through using the best-in-class technology and offering excellent user experience. Challenger insurers are doing the same: investing in high-end technology and putting their customers at the centre of their mission.
Traditional insurers, who have always played by the same rules, are now required to change if they want to compete with the innovative startups that are disrupting the industry. However, they are still dependant on a decades-old IT system that is incompatible with new technology and offers close to zero flexibility. Third-party providers offer insurers the technology and expertise they require, without the commitment or risk of completely modifying their existing system.
Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.
In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.
Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.