By FintechOS - March 6, 2024
Navigating Embedded Finance: Profitable Strategies for Credit Unions and Regional Banks
Embedded finance is already shaking up financial services. How can regional banks and credit unions tap into this new opportunity?
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Retail Banking
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Gain new customers by creating experiences and products quickly and easily
Account Opening
Create journeys powering customer acquisition
Personal Lending
Design and launch personalized products quickly to meet customer needs
Mortgage Automation
Build tailored mortgage offers to win new customers
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Grow your small business customer base
Account Opening
Engage and onboard small businesses using frictionless digital journeys
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Create relevant loan products to meet the specific needs of different business segments
General Insurance
General Insurance
Meet the need for new forms of cover and high-quality digital experiences
Small Business Insurance
Create personalized propositions that meet the unique needs of small businesses
Pet Insurance
Increase share of wallet with cover customers love as much as their pets
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BNPL and Embedded Lending
Deliver lending products directly to where they are needed
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Get insights from the latest customer case studies, whitepapers, webinars, and more
Customer Case Studies
Learn what our global customers are saying about the value of FintechOS
Platform Documentation
Comprehensive documentation for the FintechOS platform including release notes, APIs, and SDKs
The beginning of 2020 has proven to be exceptionally difficult. The new coronavirus infected more than 3 million and sent over one third of the world’s population under some kind of lockdown.
Many people found out that insurance services are now more important than ever. They realized the benefit of being covered for medical emergencies, business interruptions, cancelled fights or life insurance.
Yet, the news is not good for the industry. A recent Geneva Association survey points to low trust across all generations of insurance customers. The survey covered 7 major economies, and found only quarter to a fifth of respondents were prepared to say they trusted their insurer. Worryingly, the trend slopes downward – the more consumers experience and learn about insurers the lower their trust.
This lack of trust may be attributed in part to a wider dissatisfaction with financial services. The Edelman Trust Barometer 2020 places financial services at the bottom of the league of economic sectors, trusted by only 57% of consumers.
Perhaps the biggest cause of reduced trust in insurance is the belief that insurers won’t honour the policy.
Bad claims experience, the main cause for loss in trust, is strongly correlated with customer churn. A Forrester research shows that, in the UK, 71% of surveyed property and casualty insurance customers “would consider switching providers if they had a bad claims experience”. And 43% of surveyed online adults “don’t feel confident that their insurance company will treat them fairly when they have a claim”.
Bad claims management not only destroys customer trust but also has a massive negative impact on insurers’ costs through manual processes, human error, fraud and litigations.
Is there a solution to that? Digitisation of claims management has the potential to significantly cut claims costs and processing time. “Omnichannel and personalised claims journeys are key to customer retention”, says Cătălin Dediu, Product Marketing Manager at FintechOS.
He observed that, in the context of Covid-19, most insurers are switching to self-serve, digital FNOL journeys wherever possible.
Let’s give Asirom Vienna Insurance Group as an example, a leading insurer in CEE region. VIG integrated FintechOS technology within its core system and call center channel in less than two months – and the results speak for themselves: 50,000 medical appointments and more than 150,000 phone calls were registered within the call center application.
“This period showed us that technology is one of the most important building blocks of the world’s economy. If we didn’t have the right technology, most businesses might have been shut down dring the lockdown”, Ruxandra Angelescu, Head of Asirom Vienna Insurance Group IT Department, explained in an interview for FintechOS’ blog.
The trend is obvious. Ruxandra Angelescu believes that a lot will change in the insurance industry in the next 1-2 years, and in Asirom Vienna Insurance Group as well. “We will probably notice more evolved systems that can make decisions based on artificial intelligence, and which our clients will be able to access seamlessly over the Internet.”
But insurers had felt the pressure to modernize systems and make them more transparent long before Covid-19 outbreak. And this is because user experience had been dramatically influenced by tech giants in the past decades. The digital native generation expects quick access and a friendly shopping experience, no matter the purchase – a new watch, a room for the holiday, a ticket to a rock concert or an insurance policy.
For example, Lemonade (USA) redefined the customer experience with an innovative, chatbot-based FNOL system that creates automated claims payouts within seconds.
McKinsey observes that, for the property and casualty (P&C) industry, digitizing the claims function holds tremendous potential. “To capture the value of digital, P&C claims functions must embark on a transformation to become a customer-centric, digitally enabled organization that excels in the three foundational areas of claims—customer experience, efficiency, and effectiveness”.
The KPMG network of insurtech professionals, in collaboration with The Digital Insurer, a dedicated knowledge base on digital insurance, stated in a report released last year that 73 percent of insurance CEOs agreed that they are “personally prepared to lead the organization through radical transformation to remain competitive”.
Claims management is probably the most efficient way to regaining customers’ trust. Because the claim experience is how insurers are ultimately evaluated by their customers.
Moreover, “a digitized claims solution would typically yield a 75% reduction in claim processing time and anywhere between 25% and 50% in claims unit costs”, Cătălin Dediu of FintechOS concluded. Customer satisfaction is also likely to go up by 20%.
Simply put, there are plenty of reasons for insurers to prioritise claims management on their agendas.
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FintechOS is the global leader in fintech enablement, on a mission to make fintech innovation available to every company. As the world grows increasingly complex, FintechOS strives to simplify and accelerate financial technology so anyone can build, launch, service, and expand new products in weeks, not months or years. The FintechOS platform empowers banks, credit unions, and insurers of any size to grow revenue, lower operating costs, and achieve a faster time to value without dependency on core infrastructure and costly tech talent. Headquartered in New York and London, FintechOS has partnered with some of the world’s best brands, including Groupe Société Générale, Admiral Group, Oney, eMag, Deloitte, EY, and PWC.