Digital Transformation in Banking – What Is Right for Your Bank?

Digital transformation in banking has been an important trend amidst economic uncertainties induced by the pandemic. Financial companies are dipping their toes in digital waters, eager to modernize their IT structure in 2022. It is no surprise that Gen-Z and millennials want their banks to be technology-driven with competitive digital solutions.

Digital and mobile channels are now critical for customer acquisition and satisfaction. The dependency on e-payments has increased all over the world. The global mobile payment market is expected to surpass US$ 590 Bn by 2032 at a CAGR of 30% for the forecast period 2022-2032. The United States alone expects a market valuation of US$ 42 Bn in 2022, with contactless payments growing by 150% in 2020.

Banks, too, are eager to modernize their IT infrastructure with technologies that would bring about a cultural, organizational, and operational change. They are now looking for improvisation in four distinct areas: process, technology, data, and organizational change. The focus is now on building an ecosystem that facilitates personal, automated, and cohesive customer journeys.

The cornerstones of successful digital transformation in banking

As banks gear up for the ‘next normal’ waiting for the pandemic to recede, they reset their digital agenda on the road to recovery. They are shifting towards digital channels to address scalability and reliability concerns while catering to customers’ growing needs.

Every project for digital transformation in banking, however, should work towards:

  • Engaging clients with tailor-made solutions and experiences
  • Empowering employees with tools and technologies to enable accessible, holistic information
  • Optimizing internal operations with automated, synchronized processes
  • Building a connected ecosystem

Top benefits include:

  • Faster time to market for product and pricing
  • Cost-effective ways to scale
  • Future readiness with agile and remote solutions
  • Digital competitiveness with capabilities like open banking and real-time payments
  • Better services to enhance product innovation and customer satisfaction
  • Lower risks with regulatory compliance and greater security
  • Greater efficiency and productivity
  • More business value with data insights and cognitive automation

Banking infrastructure modernization – Technologies and use cases

Artificial intelligence (AI), machine learning (ML), and Big Data – Financial companies are leveraging these powerful technologies to transform the customer experience with seamless services and safe transactions. They help detect and prevent payment fraud. They offer a 360-degree view of the customer and are believed to reduce delinquency rates by almost 76%.

AI can be applied for multiple banking infrastructure use cases such as risk assessment, fraud detection, asset management, credit intermediation, process automation, client onboarding and KYC (know your customer), and algorithmic trading. Global spending on these technologies is expected to double from $ 50 billion to $110 billion in 4 years from 2020 to 2024.

While AI and ML help increase the efficiency and accuracy of workflows, feeding ML models with big data helps decision-making around portfolio allocation, assessing creditworthiness, and making underwriting decisions. HSBC has been using AI for fraud detection, transaction monitoring, sanctions screening, and identifying insider trading & bribery.

Robotic Process Automation (RPA) – The operating activities in financial companies involve a multitude of standardized processes. RPA ensures optimal data processing and takes care of rule-based and repetitive tasks quickly and efficiently. It reduces human workload, minimizes errors, and enables cost reductions. Digital processing of business transactions also helps in fraud prevention in a big way.

SBI General Insurance has used RPA and AI to build a digital-first business model. It leverages technology to get a 360-degree view of customer activity across touchpoints to understand customer expectations and personalize their offerings. It uses predictive analytics to upscale its cross-sell initiatives and AI to personalize customer journeys. The company relies on RPA to keep track of total premium payments and implement tax liability confirmation.

Blockchain – Blockchain has secured a coveted place in a world of digital currencies like Bitcoin and Ethereum. It allows you to store cryptographic encryption in a block. All blocks have a unique value distributed across the network, and it is impossible to manipulate in any manner. Data integrity thus is an essential aspect of blockchain though it is popular for its speed and transparency.

Blockchain enables transactions almost in real-time and instantly saves changes, facilitating the exchange of massive amounts of data in the shortest time. Transactions are unchangeable, traceable, and protected from money laundering. Smart contracts stored on a blockchain help execute an agreement between participants without the involvement of an intermediary.

Such is the power of blockchain technology that China is kicking off an intensive blockchain trial involving 164 entities despite its checkered history with digital currencies. President Xi Jinping describes blockchain technology as “an important breakthrough for independent innovation of core technologies.”

Cloud computing – Financial companies now rely on external data centers to manage their workloads. Cloud computing technology has become an essential aspect of mobile banking and payment services. It also plays a crucial role in trading, evaluation processes, and customer relationship management.

As per a survey, 40% of banks have already deployed cloud computing, while 30% have deployed application programming interfaces (APIs). Cloud computing enables speed to market with new capabilities.

Singapore’s Asia Digital Bank Corporation (ADBC) has collaborated with Tencent to develop cloud-based banking technology to offer personalized experiences to customers. It also aims to provide small and medium-sized enterprises with digital banking services to ensure end-to-end, frictionless, and seamless processes.

First steps to creating sustainable outcomes

It is easy to navigate through the chaos despite economic uncertainties by building on core strengths and tweaking existing business models. Here’s what you can do.

Grow an ecosystem

Banks have long relied on the tried and tested method of ensuring growth. They have been introducing new and relevant products to existing customers. But those like Ideabank and ING have gone beyond their traditional core to strengthen customer engagement with a 360-view of customer data.

They now provide other services like accounts-receivable management and cash flow analysis to small and medium enterprise (SME) customers. Post Bank has gone a step further to capture a market share in nonbanking domains. It is now the largest provider of mobile phone services in Italy, using its already strong franchises to offer new services to existing customers.

Address multiple needs of customers with a financial supermarket

A mix of third-party offerings can help customers manage their financial needs via a single integrated channel.

That’s how aggregators sell 60% of the auto insurance policies in the United Kingdom. Bank Bazar in India caters to more than 23 million customers without having proprietary offerings.

Offer value throughout the customer journey

Banks and financial companies can grow if they decide to extend the scope of their services to add more importance at different stages of the customer journey.

Commonwealth Bank in Australia (CBA) created an augmented reality app to help customers use their phone’s camera to see the price and sales history of the properties they were interested in. The app with financial tools such as a mortgage calculator allowed the bank to extend its role in the home buyer’s journey.

Monetize the data with analytics

You can use customer data (location, lifestyle preferences, age, gender, etc.) to get insights and anticipate customer needs. Some of the biggest banks in Canada have collaborated with Toronto-based SecureKey to help customers access online services offered by the federal government using bank credentials. Banks rely on the data they have to verify identities before allowing access.

Credit card companies have access to the data of customers and merchants. This data helps them foster new partnerships and gain access to new potential customers.

Develop a product portfolio

Financial companies should also consider leveraging back-end assets to create value for smaller businesses. These businesses usually lack the reach or resources for core banking products and services. This makes an opportunity sweet spot for financial companies to develop and sell products through third parties.

ING has collaborated with Kabbage, a US-based startup, to provide value-added services in Europe. ING brought to the table its reservoir of capital and relationships with SMEs. At the same time, Kabbage leveraged its easy-to-use interface and risk-management algorithms to offer quick decisions on loan applications.

Modernize your banking infrastructure with Trigent

Regardless of the technologies you choose or the digital routes you wish to pursue, a good view of your capabilities is critical to ensure infrastructure modernization. We have extensive experience in helping financial companies achieve digital transformation goals. Our services and solutions are designed to help them at different junctures in their digital journeys to boost their digital capabilities.

We drive IT modernization projects for the BFSI sector to make it agile while taking care of the complex regulatory and compliance requirements.

We can partner with you to simplify and standardize your IT infrastructure. Call us today for a business consultation.

5 Key Points Any Fintech Solutions Provider Must Keep in Mind to Succeed

Digitalization and COVID-19 have altered the financial landscape significantly making fintech solutions an absolute must for financial services. Fintech was initially considered as the technology that was applied to the back-end systems of financial institutions.

Fast forward to 2022, it lets you manage everything on your smartphone from helping you pay for your food to managing insurance and trade stocks. It allows you to lead your financial lives successfully without feeling the need to visit brick-and-mortar establishments.

The appetite for Fintech apps has grown to such an extent that they are now an integral aspect of financial management. User experience has been a key factor driving this growth. The use of online and mobile banking has increased worldwide with Asia leading the way.

Thai e-wallet TrueMoney grew tremendously during the pandemic and has been one of the most downloaded free Android apps in the country. Along with Japan’s LINE Pay, it is predicted to grow by over 200 percent between 2020 and 2025.

On the other hand, India is outpacing the world with digital payments rising from $61bn in FY16 to their current value of $300 bn. The Unified Payments Interface (UPI) has witnessed a surge of 103 percent in transaction values in 2021 as compared to the previous year.

While those like Paytm expand the scope of their offerings with prepaid mobile recharge services, gold trading, and bill payments, the battle for market share continues to get fiercer with contenders like Google Pay, PhonePe, and WhatsApp.

Mobile apps are now the preferred touchpoint

Fintech mobile apps are seeing an increase in installations, session times, and retention rates with the rise in innovation and offerings. Some of the top fintech apps to consider include MoneyLion, Robinhood, Chime, Nubank, Mint, Revoult, Coinbase, N26, Finch, and Tellus.

Modern apps are now facilitating diverse functions and use cases such as lending, blockchain/crypto, insurance, regtech, payments, investments, trading, money transfer, wealth management, and mortgage. Fintech apps can benefit your business in a big way.

Some of the top benefits include:

  • Greater reach – You can reach a wider audience and keep them updated with the latest information.
  • Improved functionality – You can add features to improve your business and empower customers.
  • Unparalleled convenience – Customers can use apps on the go and are more likely to explore new services.
  • Enhanced operational efficiency – You can streamline operations by integrating software to offer lower prices and greater value to customers. This can make your business more efficient and increase revenue along the way.

Korea’s super app Kakao has given its users a robust mobile-only bank platform combining marketplaces and banking functionality. In just 24 hours of opening, it had managed to garner 300,000 subscribers thanks to its user-friendly and effective marketing strategies.

Key things to remember to turn your app endeavor into a success story

While building the perfect FinTech app, it is important to remember a few things that would ultimately determine the success of your app.

  1. Security is paramount

While every financial transaction is based on trust and reliability, the app is expected to be secure at all times. It needs to adhere to legal regulations and compliance practices. Consumer data needs to be protected and customers should be offered complete peace of mind.

Fintech is vulnerable to cyberattacks since it involves sensitive financial data. It is, therefore, crucial to add the required security layers and test the app thoroughly to ensure that the coding is foolproof.

Precisely why PayTouch leverages biometrics as a security measure allowing payments with fingerprint detection. Customers do not require cards or PINs, and can easily track all their transactions online.

Blockchain-based systems are now becoming popular due to their ability to deter attacks and make apps unbreachable. According to a PwC report, more than 50% of technology leaders believe artificial intelligence will drive change while 40% of organizations are looking up to blockchain to transform the way financial services are delivered. We believe both these technologies play a crucial role in keeping threats at bay.

  1. Everybody wants a Super App

Every consumer expects ‘One app to do it all’. One app, one sign-in are fast becoming the norm. Modern users want to do multiple things including buying gold, booking tickets, and managing investments. Precisely why Bank of America is all set to launch an all-in-one app to attract new customers, bolster its digital ecosystem, and improve customer service.

Considering that 1 in 5 adults in the United States invested in stocks or mutual funds between October and December 2021, the easy-to-use app is expected to reduce the pain points for customers ensuring a seamless digital experience.

An all-in-one experience can undoubtedly be enticing but super apps have thrived only in a few markets. A super app is touted as the Holy Grail of the digital economy, and those like PayTM and Flipkart are making a beeline to claim a bigger market share with a diversified portfolio. And yet they lack the dazzle to impress consumers.

Consumers prefer choice over brand loyalty and are willing to explore and compare before buying anything. Besides, companies are trying to build use cases beyond their primary domain of expertise instead of collaborating with others. Precisely why PayTM couldn’t carve its niche in eCommerce and Ola Cabs ended up dropping Foodpanda soon after acquiring it.

Not to forget UberEats which burned a whopping $3 billion only to give away its food delivery business to Zomato later. Rather than capitalizing on individual strengths, these companies are fragmenting the market.

Companies will have to work towards fostering partnerships and ecosystems. They will have to invest time in opportunity mapping and conduct an exhaustive study of the competitive landscape. The focus should be on developing the customer value proposition to ensure high user stickiness. A robust data analytics engine can help provide the necessary insights to get started.

  1. A frictionless customer experience should be the ultimate goal

A simple and easily navigable UX (user experience) / UI (user interface) is what is needed to ensure convenience and a frictionless customer experience. Intuitive, UX-driven payments are the need of the hour and streamlined navigation is the hook on which they rest.

Thailand’s Piggipo allows users to have their own financial advisor to help with budgeting and handling myriad other things. It allows subscribers to manage multiple cards via a single interface, track their spending, and schedule payments. It also allows them to set spending limits and check their credit card statement in real-time.

System performance is critical to delivering the perfect customer experience. Time is of the essence when it comes to use cases like payments processing. App developers must optimize system performance keeping the end-to-end impact in mind. They need to adopt agile methodologies like Scrum and Kanban to ensure rapid iterations, minimize risks, and enhance business value.

  1. Everything has to be customer-centric

Gojek understands this well and offers more than 20 services in diverse areas including transport, food delivery, and logistics., on the other hand, offers a fintech service, mobile phone cellular services, and an online payment system along with a cashback for top-ups, savings, transfers, purchases, and bill payments.

Data analytics makes it easier to understand your consumers. Data insights can improve operational processes and transactional data can be used to offer better customer experiences.

For instance, you can use the data to risk-assess loan applications and offer them loans just when they need them. While traditional banks are still struggling to make sense of siloed data and get a good view of their customers, you can step up and serve your consumers with meaningful solutions.

Although every endeavor should keep the ‘customer’ at its core, other factors like time-to-market, scalability, and maintenance should not be overlooked.

  1. You must provide a solution to a market problem

According to the State of Finance App Marketing report, Asia & Pacific region has over 1230 fintech apps. In 2020, marketers had spent US$ 244 million to get new users taking the number of paid installations to 600 million. It’s easy to get lost in the crowd unless you pick a specific problem and address it effectively. Only then would you be able to have a competitive advantage and a greater market share.

That’s exactly what Square Inc. did. McKelvey (one of the founders of Square Inc.) was unable to process a sales transaction worth $2000 in 2009 since he didn’t accept credit card payments. The transaction costs made credit card processing extremely expensive for small businesses back then.

He teamed up with Jack Dorsey to create a hardware prototype that would solve this problem for smaller retailers and individuals. It was a square card reader that was sent to users for free to connect through the audio jack of mobile devices and facilitate payments. Square charged a nominal fee of 2.6% along with an additional transaction fee of 10 cents and the company was soon making humongous profits.

Interestingly, Square Inc. became a fintech success story even before fintech was born. The company attributes its success to the low transaction fees and the $0 fixed cost for card purchase. But none of this would have happened had the founders failed to see the advantage and the opportunity in payment processing.

The right technology partner could be your first step to fintech app success

It takes an experienced partner to understand the intricacies of fintech. The best-laid plans and the biggest ventures can fail too if they lack proper research and strategy.

A classic case in point is the fall of N26 that had announced its US operations amidst great fanfare in 2019.

With America’s oldest and most celebrated bank Axos as its banking partner, the Berlin-based fintech promised an unparalleled digital banking experience to its customers. Yet, it recently announced its decision to close its US operations.

So, what went wrong?

Despite claiming to be for everyone, it was for no one since it lacked a definite market niche. There was no feature differentiation and challenger banks were already offering what they could. In a strong regulatory environment, it is important to define your customer and differentiate the customer experience.

In contrast, Chime and Varo were very clear about who they were catering to – low to middle-income consumers – irrespective of whether they spent their whole time on their smartphones or not.

Build your fintech solutions with Trigent

Emerging tech holds the key to fintech app success. At Trigent, we make organizations digitally ready with next-gen technologies like AI, IoT, and blockchain.

We can help you navigate through the many challenges of fintech app building. Call us today for a business consultation.

Cloud Computing in Finance: Decision Guide to Choosing the Best Cloud Model for Finance Enterprises

Just about everyone is talking about the cloud. Cloud computing in finance sector is driving agility for enterprises, and everyone from business leaders to forward-thinking CIOs is using it to support their business strategies to improve performance and returns. The banking, financial services, and insurance (BFSI) industry are also leveraging the cloud to address specific requirements and unique challenges. 

Cloud is a game-changer for businesses, and COVID-19 has further accelerated cloud adoption. Today,  most finance enterprises have eagerly embraced cloud-based systems to enable remote working, upgrade customer-facing software, prevent frauds, and increase efficiency.  It aids operational activities such as new account opening, fund transfers, loan approvals, insurance advice policy renewal, and more.  All you need is a cohesive cloud strategy to realize its business value fully.

As per a Google Cloud survey1, 83 percent of respondents said they were deploying cloud technology as part of their primary computing infrastructures, with hybrid cloud being the most popular (38 percent),, followed by single cloud (28 percent) and multi-cloud (17 percent). It, therefore, becomes imperative to understand the different cloud deployment models and options and define your objectives to create a roadmap for cloud adoption

Adoption of cloud computing in finance and banking

The financial sector is far from full adoption as far as core, back-office workloads are concerned. BFSI companies have adopted cloud technology for various reasons, including Data and IT security, regulatory reporting, fraud detection and prevention, data reconciliation, and underwriting activity. 

Those who have embraced cloud adoption unanimously agree on its benefits that include:

Ø Adapting to changing customer behaviors and market trends

Ø Enhancing efficiencies and operational resilience

Ø Enabling innovation to upgrade product and service portfolio

Ø Enhancing data security capabilities

Ø Eliminating silos to ensure connectedness and transparency

Ø Scale up or scale down capacity to manage diverse workloads and activities

Ø Driving integrated decisions by integration of business units to share data and respond quickly

A cloud computing environment is just what you need in the current scenario. But you need to first understand the influencing factors and the cloud compositions and service models to decide which one’s right for you. 

Factors to consider

BFSI enterprises often embark on a cloud journey with infrastructure-as-a-service (IaaS) models to later evolve to platform-as-a-service (PaaS) and software-as-a-service (SaaS) models as they mature. To choose the right model and devise a strategy, you need to be very clear about your objectives. 

Your business case for adopting Cloud 

Critical applications are often built on legacy technologies, and moving them to the cloud usually entails high costs. Also, migration is not easy until they undergo a bit of a revamp. A detailed cloud strategy and roadmap, therefore, becomes essential to initiate cloud adoption. 

Intended customer experience & service differentiation

A differentiated service experience is a key to the success of a Cloud implementation. You can either build your custom solution for max flexibility or use an existing Off-The-Shelf (OTS) or SaaS solution with their out-of-the-box features. OTS and SaaS solutions are suitable when the time to market is key – A custom solution works better to deliver a differentiated CX

Government regulations

The modern regulatory framework requires enterprises to comply with stringent privacy, security, and regulatory standards in regards to the capture, storage, and sharing of customer data. Understanding these requirements is essential before choosing between on-premise, private, or public cloud to host systems.

Choosing the right cloud deployment and service models

Financial institutions vary in their business functions and technology priorities. Feasibility analysis, cloud migration assessment, and strong decision-making capabilities are necessary to choose the right deployment and service models. 

A leading investment bank is using a public cloud for its regulatory reporting solutions. In contrast, a prominent Norwegian bank has adopted the PaaS model to transform its peer-to-peer mobile payment application using microservices on the public cloud. The bank has captured nearly 80% 2 of the market, ensuring high application availability and scalability to service more than 2M customers.  While doing so, it was able to increase transaction processing throughput by 10x and reduce infrastructure setup time from 60 to 6 days and release time by 3x.

A major North American bank specializing in cards, wealth management, and investment services had spectacular results after migrating to the cloud. It leveraged the IaaS and PaaS models on the private cloud to modernize its channels by enabling digital identity, push notifications, e-wallets, behavioral biometrics, etc. The bank saw a 40% improvement in time-to-market, an increase in active mobile user base by 20%, and a drop in annual infrastructure cost by 15%.

Chinese banks3 such as Minsheng Bank, Ping An Bank, Industrial Bank, and Beijing Zhongguancun Bank are using cloud-native SaaS platforms to strengthen their anti-fraud systems and increase the responsiveness of the front-office and agility of the back-office. 

Clearly, cloud adoption differs significantly in scope and value for every organization. While some banks have adopted PaaS and SaaS models to modernize their channel and teller applications, many adopt low code SaaS offerings for sales, customer relationship management, onboarding, and enterprise resource planning systems.

Cloud computing deployment in finance

Cloud service models

Choosing the right cloud service model is easier if you recognize its potential in furthering your business objectives. The model you select should evolve based on your needs and the business functions you want to support. 

Distinctions exist among all, especially when you evaluate them with a risk-based approach. Here are the top 3 popular ones:

  • Infrastructure as a Service (IaaS)

It offers IT infrastructure (servers and storage) that can be managed online via a pay-as-you-use basis without getting into the complexities of purchasing and managing physical servers. It is dynamic and flexible, and the services are highly scalable. Resources are available as a service, and it allows enterprises to carry out automated administrative tasks.

  • Platform as a Service (PaaS)

It allows enterprises to develop, test, run, and manage applications since it is accessible to multiple users through the same development application. It can be integrated with web services and databases and supports diverse languages and frameworks. Its ability to ‘auto-scale’ gives it an edge.

  • Software as a Service (SaaS)

It is an on-demand software that hosts applications. Applications can be accessed easily via an Internet connection and a web browser from a central location. It is hosted on a remote server and available for use on a pay-as-per-use basis. Users do not have to oversee hardware or software updates since updates are applied automatically.

Winning with Cloud power

As the needs of modern finance enterprises evolve, mature cloud services will continue to emerge to help manage different business functions. Cloud adoption can help deliver compelling value propositions to customers and innovate along the way. Cloud power is the way forward to enhance capabilities and enable end-to-end automated processing. However, the key to successful cloud adoption lies in the cloud model you choose and the service provider you decide to work with. 

Embrace cloud technology with Trigent

Trigent has been helping the BFSI sector minimize risks and maximize benefits with the right cloud transformation strategies. We help them approach cloud migration in an incremental manner to reduce transition risks and enjoy the benefits of cloud storage and compute power in a cost-efficient way. 

Our cloud-first strategy enables cloud transformation at speed and scale to help enterprises drive agility and collaboration. We can help you embrace cloud technology too to operate in an agile digital environment.

Call us today for a business consultation. 



Top 3 Insurance Industry Trends in 2021

According to a recent poll, 54% of CIOs believe that insurance companies are resilient and will continue to remain so if they move quickly and decisively. Although this is not big breaking news, we have all witnessed how insurers have evolved in the last few years, to meet the changing requirements of policyholders. Several new trends have emerged as more insurers adapt to these changes. Leading insurers like Allianz, Munich Re, Nationwide, and Liberty Mutual are pouring in money to find the next best thing in insurance.

3 key pillars defining the strategy for the insurance industry trends

As the business dynamic has changed in the last few months, insurance organizations continuously anticipate, adapt to, and manage risks and assess the appropriateness and completeness of their strategy during and post-pandemic. The following three pillars have defined insurers’ core value proposition, go-to-market, and technology adoption:

Redefine purpose: “There’s never been an era where the world was more in need of a high-performing insurance industry. But to meet the moment and return to growth, insurers must rationalize and rethink their core strategies — from what products they offer, to how they operate, to which markets they serve”, stated EY in their Global Insurance Outlook 2021.

Agile and customer-centric approach: Everything insurers started doing -product portfolios, organization structures, and technology reflected deep insights into market needs. Right products delivered through the proper channels earn customer loyalty and enhances operational efficiency.

American Family Insurance started by implementing Agile within their digital experience team to aid informed decisions in 3-6 days. Today they use Agile CX Sprints for Marketing and Innovation programs as well.

Value-based services: As the pandemic changed the customer needs, the insurer in the health and auto sector shifted towards ‘usage-based insurance.’ This approach optimized the cost structures, strategically prioritizing investments for insurers.

Key insurance industry trends

Leading carriers worldwide have reimagined their insurance products and offerings to thrive in the new reality with these guidelines. Here are three insurance industry trends you cannot miss in the insurance sector

Becoming more human with automation: 79% of insurance executives believe collaboration between humans and machines will be critical to innovation in the future. Intelligent process automation helped insurers transform their business, become more human, and better adjust to market volatility.

As per a report by Juniper, “Intelligent automation adoption will boom over the next five years, with more than 65 percent of carriers adopting the technology by 2024. The study found that they’ll do so to cut operational costs and remain competitive as they counter flat premium growth”.

Intelligent Automation helps in delivering significant benefits such as:

  • Efficiency, by automating the mundane tasks and minimizing manual data handling.
  • Customer satisfaction, by reducing the turn-around time and improving speed and accuracy.
  • Scalability, by enabling faster decision-making processes and new business generation.

Tailored solution for the customer: Millennials and Gen Z, who are used to stellar online services by Amazon and Apple, expect every company and industry to offer the same level of personalized services. Your customers want immediate access to payments, claims status, and policy information.

Allianz uses five steps to offer personalized policies:

  • Listen to customer
  • Figure out their stated needs and latent needs
  • Review current scene of system and process
  • Re-align them to customer’s requirement and
  • Deploy the right technology

Other insurance brands like Lemonade, Allstate, Nationwide allow full customization, which can be achieved through their app or their company website, within a fraction of a second.

Another category of personalized insurance products that are in high demand in 2021 is Switch-on and Switch-off insurance. An excellent example is Usage-based car insurance. It allows car owners to insure their vehicles for kilometers; they tend to drive instead of the run-of-the-mill full year.
Auto-insurer Metromile Insurance Co.’s revenue grew from $4 million in 2017 to a massive $106.4 million in the last quarter of 2018. Metromile tapered its services by providing personalized suggestions depending on miles driven.

Pro-active fraud and risk management: Insurance frauds are not new but have now been amplified. The Federal Bureau of Investigation (FBI) estimates that the total cost of insurance fraud in the United States alone is more than $40 billion per year. Gartner developed the CARTA approach that goes beyond single-point risk assessments to encompass continuous fraud prevention and detection across a customer’s journey on all channels.

The CARTA strategic approach specifies that effective fraud and risk management require:

  • 100% device visibility and automated control
  • Continuous monitoring, assessment, and remediation of operational risk
  • Micro-segmentation to contain breaches and limit lateral movement/damage
  • Technologies and products from several vendors
  • Detection, posture assessment, and control of physical and virtual devices as well as cloud infrastructure

Technologies to boost digital trends in insurance industry

While Insurance organizations are tracking these trends, their key enablers are technological innovations to become an agile, customer-centric, and data-driven organization. In 2019, insurers spent nearly $225 billion on InsurTech and the number grew in 2020.

Here are the technologies that are driving transformation in the industry:

Robotic Process Automation (RPA) to overcome operational roadblocks

Insurers adopting process automation in areas ranging from underwriting and claims management to fraud detection and customer service have witnessed significant changes. Early adopters of Robotic Process Automation (RPA) have noticed reduced labor and claims processing costs and increased efficiencies in document and data management.

MetLife conducted a value stream analysis within its U.S. to determine how to minimize the mundane, rote tasks employees need to do, enabling them to focus on more value-added, customer-facing tasks. This exercise picked approximately 60% of processes that could be reengineered, and 40% could be automated. As a result, by the end of 2018, they have used more than 110 robots to optimize customer and employee experiences through simplified, digitized, and automated processes.

Automated data crunch

Data-related automation helps insurers unlock rich insights that range from understanding clients’ needs to make personalized promotions to offer data-backed advice to drive real-time decisions. For example, Planck, an AI-based data platform, reviews online images, text, videos, reviews, and public records and helps the insurer determine premiums, process claims, and give SMEs faster quotes.

Virtual assistants with AI-powered web & mobile chatbots

Another application of cognitive technology is AI-enabled Chatbots and Virtual Assistants. They interact with the customer in natural language processing and add a human-like touch. For example, Juniper Research claims that conversational AI chatbots for insurance will lead to cost savings of almost $1.3 billion by 2023, across motor, life, property, and health insurance. ( up from $300 million in 2019)

Predictive analytics in proactive fraud and risk assessment

The use of predictive analytics in identifying fraud risk indicators allows early flagging and response to any potential incidents. Here are three absolute favorite methods by the insurer to proactively detect fraud:

  • Social network analysis: The hybrid method includes statistical methods, network linkage analysis, organizational business rules, fraud-pattern analysis, etc., in identifying fraud clusters to see correlations between clusters and aid fraud detection management.
  • Big data, predictive analytics detection: This method is proactive and can handle Big Data sets and make predictive analytics reports.
  • Customer relationship management: This method interlinks to social media placing customers in control of their information and enabling customer transparency.

The future of insurance industry

The pandemic has elevated the insurer’s role in envisioning potential future disruptions and strategic opportunities and defining the future customer experience, business models, and capabilities needed to capitalize. Front-runners already see results; many others are following.

Among these, what trend do you expect to take the forefront of your organization? We can help you to pick the one that suits your requirements. Book a consultation today to know more.

Four disruptive technologies for Banking in 2019

In the brave new world of banking and financial services, technology has become the key to a locker filled with goodies. As a result, it is not impossible to imagine a future where opening a bank or a financial company is as simple as connecting an appliance. In that world, a robot could guide an investor on the best possible options or you could walk into a bank manned by robot tellers. PWC’s report titled ‘Financial Services Technology 2020 and Beyond: Embracing disruption‘ envisages a future where the impossible will become reality. While this list may seem a little too futuristic, banks and financial services organizations are already feeling the tremors of new technology waves that are disrupting existing business models to pave the way for faster, smarter, cheaper operations.

Here are a few emerging technology disrupters:

Distributed ledger technology (DLT)

Algorithms are enabling the collaborative creation of digital distribution ledgers that are far smarter than their paper counterparts. Distributed ledgers are asset databases that can be shared across multiple devices, sites, and geographies where participants can own identical copies of the ledger. Used for various purposes, these ledgers are stored in cryptographic forms and accessed with electronic keys and signatures. Participants, based on rule-based permissions, can update these ledgers, whenever required.

Accelerating change in financial services through Digital Transformation

Distributed ledgers are beneficial to banks as they can reflect changes on a real-time basis. As they are extremely secure, they prevent unauthorized entries, making corruption virtually impossible. As a technology solution, distributed ledgers reside on top of existing applications. Within the field of distributed ledgers, block chain is one more method of distributed ledgers. However, block chain is restricted to a sequential model while DLs do not necessarily fit into a sequential pattern when distributing ledgers. Distributed ledgers may be a good first step forward with immediate benefits for the banking sector.

Artificial Intelligence

Robo-advisor – Fancy though the name sounds, robo-advisors have been around for over a decade. However, it is only in the recent past that this concept has gained popularity. Robo-advisor is an algorigthm-based AI for automated financial advice. This concept has become especially popular for small investors with limited investment options. However, even in cases of larger investments requiring complex decision-making, robo advisors help to automate activities such as tax losses and rebalancing. Robo advisors are useful for single investment goals, and are very good with automated portfolio rebalancing.

As an add-on service, banks can provide value-added services to customers using robo-advisors. Customers can, thus, benefit from customized financial plans and automated investing. One of the key advantages of robo-advisors is the ability to negate human-made calculation mistakes. Uncolored by human emotions, robo-advisors rely purely on algorithms and numbers, reducing chances of errors in investment decisions. In the competitive world of banking, robo-advisors can combine the derive intelligence on existing customers to offer customized investment plans that are beneficial to banks and customers.

e-KYC and identity

Know Your Customer (KYC) is a process adopted by businesses who offer products and services to traders, customers and agents. It is also a process followed by financial services organizations to adhere to regulatory requirements and also to target segment customers. Till recently KYC was a physical activity which required human intervention. While several organizations continue to rely on physical KYC, some forward thinking financial institutions are incorporating eKYC as a procedure for information and verification on customers. By minimizing paperwork and manual labor, eKYC presents a huge opportunity for banks to reduce operational costs without compromising security and information. eKYC reduces paper dependencies thereby helping to avoid identity thefts, and eliminating forgery. Banks can adopt eKYC as it is extremely secure. In the future, eKYC would be the first step forward in a world of secure, paperless transactions.


According to the 2017 True Cost of Fraud Study from LexisNexis® Risk Solutions, financial services companies earning at least half of their revenues through digital channels incur up to $3.04 in costs for every dollar lost to cyber-fraud. However, as per the same survey, banks that adopted a multi-layered approach to cybersecurity experience less than 50 percent of the average losses attributed to lapse in cyber security. To ensure cybersecurity, banks are leaning on digital identity intelligence, advanced behavioral analysis, clear-box machine learning technics and integrated risk based authentication. With over one billion new internet users entering the field on an annual basis, the fear of cyber threats can be extremely overwhelming. However, digital identity-based authentication is helping to control fears while providing a real boost to this industry.

To summarize, technology disruptors are providing opportunities and challenges to the banking sector. While challenges such as data breaches, cyber attacks and compromised data will be a fear factor, banks that want to meet the heightened needs of customers should plunge ahead and adapt digital technologies for competitive success.

Defining the Digital Landscape for Credit Unions

Credit Unions have been around for more than a hundred years, fulfilling Roosevelt’s law of providing a superior financial service experience for members. However, according to Credit Union National Association’s recent report, the number of credit unions has shown a sharp decline in 2015, and some of the contributing factors include lack of  scale and operational efficiency, rising competitive pressures and members’ demand for more products, services, and access channels. New technology and the resultant digitalization of the financial industry has altered consumer expectations. To summarize, the marketplace has changed and continues to change at an unprecedented pace and in order to remain competitive, credit unions have to keep up with upcoming changes and customer expectations.

Credit unions, due to their community nature, had no necessity to actively hunt for their clients. They were built by people belonging to certain trades or territories, which enriched the member base instantly and automatically. With the new fierce competition, the traditional way of operating is no longer relevant and sustainable. In order to stay in the game, credit unions have to go through a complex omni-channel and digital transformation journey, which includes addressing four key problem areas.

  1. A 360-degree view of the member
  2. Omni-channel data processing
  3. Cross-department lead generation
  4. Operational efficiency

While consumers, especially those who list 4 of the largest US banks among their top 10 most hated brands, and rated banks the lowest of any financial institution on a customer satisfaction survey, support locally owned businesses such as credit unions, they still want the convenience that banks offer. Technology, mobility, and convenience are important and credit unions are mostly rising up to meet the challenge. For example Navy Federal Credit Union, the largest federal credit union in the US, is one of the early adopters of Apple Pay, Apple’s mobile payment platform unveiled as part of the iPhone 6.

DuPont Community Credit Union (DCCU), to cite another example, which supports 72,000 members in Virginia’s Shenandoah Valley, detailed a campaign to increase debit/credit card utilization with rewards dashboards. According to Michael Tranum, Vice President of Information Technology, the campaign-enabled members who could sitting at home, see where they were in reaching the next reward tier and see a tangible value of their products – money refunded, saved and so forth.

Following in the footsteps of the early adopters, many players have already increased their IT spend to include digital transformation. Some of them are favoring responsive design, with a sharp focus on UI/UX enhancements and several others – mobility. New payment types and analytics integration is also being considered important, but most noteworthy is the fact that some credit unions that continue to stay ahead have distributed their spend across all the above. Obviously, these credit unions are following the technology predictions for the financial industry and embracing these, to remain competitive. Based on an analysis of the digital innovations that these early adopters embraced and met with success, we came up with three cannot-be-ignored digital transformers.


There is no doubt that mobility is redefining the consumer interaction landscape and credit unions need to include mobility in their digital transformation journey. However, the point to be remembered is that `one size fits all’ cannot be true for credit unions who want a mobile presence. Nor should it be a replica of their online presence. What is required is for members to be actively involved in the development process and view the app from the user’s perspective. Whether the app provides comprehensive coverage or only focusses on a few services depends on a particular credit union. This calls for a strategy similar in many ways to a DevOps environment.

Data Analytics

Credit unions were created with the idea that people should help people and as a result, they already know a lot about their people or members as you can call them. Credit unions can cull out tremendous intelligence by analyzing data of their account owners. The data can include pertinent intelligence, leveraging which they can run targeted marketing campaigns. However, collecting customer data to aggregate intelligence may seem contradictory to the collective character of the credit union business. But, the positives can outweigh misgivings and it is up to a credit union to personalize services while safeguarding its ethos.

The question arises as to what a credit union can do with the intelligence. For one, it can target customers better. It is possible to develop deeper relationships with customers by customizing services which will lead to long-term loyalty. Secondly, it provides a competitive edge. Banks and larger financial organizations are growing larger simply by adopting digital transformation. Analytics can help credit unions to offer incentives to compel customers to make decisions based on transaction data and relevant information.


Credit unions while sorting members based on demographics must also remember to segment them based on their overall attitude to technology innovations. Some of them, for example, may be digital enthusiasts. These are the people who are constantly reaching for one device after another to stay engaged online. For these people, credit unions can create slightly more complex apps. In the middle of the spectrum, are the digital know-hows who can `manage’ online transactions but shy away from carrying out complicated functions on their mobile device. Finally, there are the skeptics who do not want to have much to do with the digital transformation. They will probably stick to a particular device and use only those functionalities which they are most comfortable with. An app, in this scenario, needs to offer basic functionalities which are absolutely user-friendly.


Banks and financial institutions have mostly already adopted the three disrupters mentioned above. For consumers, this translates into ease of usage, agility and faster turnaround time. Banks are cashing-in on the growing list of both customers and transactions and the intelligence they derive from this. It is a win-win situation. If larger, stoic institutions can benefit so much from the digital transformation, how can credit unions not benefit? After all, the fact remains that because credit unions offer what consumers want – i.e. service, respect, convenience, and of course lower interest rates, they will be the preferred choice of consumers, no matter what technology innovation larger banking and financial organizations may adopt. Keeping this fact in mind, this is a good time for credit unions to adopt digitalization to better what they already do well.

Exit mobile version