London, U.K., 20th September 2016 – Amido, a vendor-agnostic technical consultancy specialising in assembling and integrating proven cloud technologies to improve customer data and identity management, has discovered that the Insurance sector in financial services are laggards in the quest to build customer identity profiles that will encourage a more personalised service, generate sales, increase retention rates and ultimately, customer loyalty. The sector has stated that it wants to use data to harness empathy within the customers beyond simple renewals and product purchases.
All of the four insurance companies interviewed agreed that a personalised approach is integral to building loyalty, but to one smaller provider it is everything: ‘You are competing in a market which is dominated by the direct insurance writers, including the household names of Hastings, LV=, Direct Line and Tesco. They have the scale and underwriting capacity to undercut you dramatically, so to compete you have to be very good at serving niche customers with niche products, typically where the direct writers don’t have an appetite,’ said James Fairhurst, Group CIO at Brightside Insurance.
Business technology leaders from insurance also agreed with peers in logistics and retail that the digitalisation of services and disruptive aggregators have added further stress to market competition. Online giants like Amazon and Facebook are having a major impact on their sectors, in particular on the expectations of customers when it comes to the online user experience for technology-driven transactions and how organisations respond to customer needs. An added complication for the insurance sector is the urgency to have a strong multi-channel offering to meet the needs of customers who expect to be able to pick up the phone and get an answer, as well as use digital services.
‘Amazon has cracked customer identity management, it works for you, it is simple and it is very personalised,’ said Richard Warner, CIO with LV= a mutual insurance firm that has grown rapidly in recent years. ‘The bar in customer services is not set by other insurance companies, but by other experiences customers have. People look at organisations and ask ‘is that a good experience?’ based on what they have experienced elsewhere on the web.’
However, Alan Walsh, CEO of Amido, comments: ‘Amazon’s customer identity solution is not where they excel – its purchase recommendation is basic as information on the customer is based on what they previously bought and does not take into account anything else about that individual. A joined up identity strategy reduces spam and personalisation excellence comes when you use insight gained from multiple data sources (social profiles, email marketing, order or browsing history, customer services, transactional history, cookies, online journey etc.) to offer up products and services that customers want, when they want them and in the right channel. You can then apply machine learning to predict future behaviour and pre-empt what customers want before they know they want it. One technology product cannot do all this – it needs a combination – and judging by our research findings, the financial services insurance sector is struggling to gain headway in delivering a more personalised service.’
Andrew Sell, Head of Digital Marketing at Prudential UK adds that although they have sophisticated technologies, they’re still a fair way behind from forming a customer view in the way retail and media are doing. ‘We have a sophisticated Enterprise Data Warehouse that combines data from across our business, but there are still pretty big repositories of data that are not yet joined to this platform.’
Alan Walsh, CEO of Amido comments: ‘Whilst Data Warehouses are an important element of your data storage, they only give you hindsight, insight at best. What machine learning gives you is foresight. It’s having all three working together that really counts.’
The report clearly reveals that organisations see customer identity data and creating a single customer view as a rich resource, but the sector seems unsure about how to achieve this – even though they know that the lines between marketing and IT have blurred. Pooling data together from disparate sources enables customers to feel more secure in their dealings with the brand, their products and their services. Sharing this data across the entire business will help with customer profiling and identity, in turn increasing profit and loss margins as well as improving the overall experience, including the ability to tailor services and products to individual customers.
Richard Warner, CIO of LV=, agrees with James Fairhurst from Brightside Insurance: ‘A lot of our conversations with the customer start with the product, and this will have to change to create an organisation that is more empathetic to the customer. Long term, having an understanding of the customer will lead to having a better interaction with them. We need insight into their wants and needs. As a CIO, how do I have a set of processes that support the customer?’
Chris Gray, Director of Technology at Amido, adds: ‘Combining the expertise, knowledge and resources of Technology and Marketing departments will create a centre of excellence, one that utilises machine learning, data warehousing and customer behaviour information from multiple sources. This all creates that holy- grail, 360 view of the customer’s identity, which is the foundation needed for effective personalisation. The fact is, across all the sectors we spoke with, customer data is mainly owned by the marketing and commercial teams; but true customer identity resides in the data the customer is willing to share – and getting people to share information is a challenge. With Gartner predicting that by 2018, 50 per cent of IT and identity access management programmes will be focused on both enterprise and customer facing infrastructures as the two spheres evolve into one, leaders need to start working towards joining up their information by collaborating their technology solutions.’
Alan Walsh, Amido CEO, concludes: ‘Industries need to understand that identity is different to personalisation. Identity underpins personalisation – unless you have a complete view of the identity of your customer, how can you offer a truly personalised service? Customer identity is a huge part of experience, especially the merging of the digital and physical world as the transition between the two should be seamless. Once you get this right, it presents huge opportunities for all industries and across all channels. But you need to start with your technology first and most organisations already have the software; now you just have to make them talk to each other as digitalisation of the customer’s behaviour is not going away any time soon.’