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Security, Simplicity and Speed - the future of Financial Services

25 September 2015

WHY DOES THE INSURANCE INDUSTRY NEED TO CHANGE?

Quite simply, because the digital age is here.

The facts speak for themselves. 80% of people access the internet several times a day. Most have an expectation that they can research and buy products anytime, anywhere. As consumers, many of us have heightened service expectations, driven by examples such as Amazon who have created simple and trusted on-line user experiences.

The impact of these changes in customer expectation has been profound in the Insurance market. Although most in the industry recognise the need to adapt to remain competitive, many lag behind in providing a relevant service for the changing marketplace. Most Insurers have not caught up with expectations of today, let alone planned for the further big changes that are sure to come.

So, what are these heightened customer expectations? That's a question that does not have a simple one-size-fits-all answer. There are so many different types of customer. Different customers are different ages, they come from different nationalities and cultural backgrounds, they have different personalities… the list of differences goes on.

It can be argued, however, that there are three basic things that we all look for as potential customers:

SECURITY

Let's look at security first. The financial market is so often viewed with suspicion by consumers. There seems little trust and, for many, a perception that product and service providers show a lack of integrity.

There is no quick fix here. Integrity has to be embedded in the DNA of a brand, from the top down. It takes a long time to earn trust; it is all too easy to lose trust, sometimes for reasons that seem unfair to the provider. But, in this area, the customer is always right. For most of us to feel truly secure, we need reassurance over the following:

If a provider can reassure us on these points, we feel happier to purchase from them.

SIMPLICITY

Financial products, by their very nature, are often complex. In many cases, they come with risks and exclusions. Many products offer several benefit options with different price points, essential for meeting different customer needs and budgets.

But the customer is after simplicity. How do you square the circle? It's easy to get fooled into trying to simplify your product to one-size-fits-all. The result with this approach can be a product that no one needs.

The thing to recognise about customer expectations for simplicity is not that we are driven by a need for simple products - although we do like them if they are available and meet our needs. What we are really driven by is a need for clear and simple explanation of what we are buying. We want an easy way to understand the options and what they mean to us in terms of price, risk and benefit. Most of us will appreciate and buy a complex product that meets our needs if it is explained to us in a way that we can understand.

Education around the products is important, but so too is how the information is delivered. Some customers are happy to do their research on-line. Others need face-to-face communication, or the ability to ask questions either digitally or by telephone. Assuming that everything should be on-line is not the answer.

SPEED

Customers always want to make buying decisions at their own pace. As stated earlier, we are all different. But there seems to be a universal belief that speed means fast fulfilment. Sometimes it does, but none of us want to feel rushed. Equally, none of us want to feel like we're being made to sit through sales patter we don't need, or asked seemingly endless and pointless questions, when we've already made our decision to purchase.

What speed should really mean is that each stage in the process should be fast and efficient and delivered in a manner that suits the customer. Some customers want a one-touch on-line process without human intervention, but that is not perfect for everyone.

However an individual prefers to research and buy - digitally, face-to-face, or over the telephone - he or she wants the process to be streamlined and efficient.

WHAT SHOULD THE INSURANCE INDUSTRY CHANGE?

Put simply, Insurers need to deliver what the customers want. Granted, no two customers are the same but, as highlighted above, their fundamental expectations are. To satisfy these expectations, Insurers have to concentrate on three key areas of their business:

HOW SHOULD THE INSURANCE INDUSTRY CHANGE?

Technology is certainly not the only answer, but recognising the need to change to the right technology is undoubtedly a great first step for many organisations. Technology is an enabler. It can be used to deliver a streamlined and tailored service for a demanding public, each member of which is looking for a personal version of security, simplicity and speed.

The right technology can offer:

Technology has to support your company requirements, not force you to change those requirements in order to fit the capabilities of the technology.

In a nutshell, we believe that technology should support businesses that recognise customers as individuals; individuals who have some fundamental needs in common; needs that must be met every time.

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