Banks must take advantage of data to cross-sell

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Banks have a natural advantage when it comes to offering insurance products to their customers. According to Cover Genius VP of Strategic Partnerships, EMEA Daniel Poole, since consumers are already accustomed to their banks being the financial hub of all their transactions, this relational reality puts insurance in a unique place. as a natural and intuitive extension.

At its core, this cross-sell opportunity is based on all of the consumer data they already have, Poole said, and the extent to which it can be used to tailor and personalize their insurance offerings to their needs. customers, which suggests that banks are often the first to know when a customer is undergoing a major change in his or her life, such as having a baby.

“You buy a pregnancy test, then you’re on Amazon and buy ‘what to expect when you expect,’ then you look at nursery equipment and furniture,” Poole said as a hypothetical example. . “All of these things indicate that there is a new family member coming in. Banks are well placed to detect changes in the lives of customers and present practical and tailored insurance offers to the customer when they need it. “

This transactional data trail will show up with most major life events, such as a college student, marriage, and retirement. The key for banks, he said, is to realize that data has the potential to be the cornerstone of their unique and personalized insurance offering for consumers. Provided, of course, that they take advantage of it to create something truly practical and frictionless for consumers.

The Bank Challenger Advantage

According to a survey conducted by PYMNTS.com and published last month, nearly half (45%) of bank customers are very interested in receiving at least one insurance offer from their bank relevant to purchases and events. This willingness of consumers shows an opportunity for both traditional banks and neobanks, also known as “challenger banks”.

But Poole said there is a gap in their inherent ability to deliver these services and traditional banks are being left behind.

Challenger banks, he noted, unencumbered by legacy systems and processes, were designed to be convenient and easy to use, which the data shows is the primary buying trigger for customers. While neobanks have an advantage, given their digital nature, they still have the opportunity to further enhance and personalize their offerings with built-in insurance and guarantees.

“Convenience and ease is just the right product at the right time and makes it easier to buy,” he said. Consumers don’t want one-size-fits-all offers that end up being one size fits all, he said – they’re looking to the bank to tailor protection insurance offerings to that customer’s rigorous demands.

“And it’s not enough to just have the data. You have to be able to use the data, ”he said. “While all banks have the data to be able to run in this area, digital banks and challenger banks, again, have an advantage because they are often free from legacy systems that can limit both the ability to use datasets consistently; and the ability to from deep integrations with partners, such as Cover Genius.

Traditional banks, he said, are weakened in this regard by their tendency to compartmentalize their data. Transactional data, which could help them build better insurance deals, is completely isolated from what is actually on offer, not providing any benefit to the policies written. If all data was optimized, banks would have visibility and make strategic use of all these data points.

With InsurTechs, there is an opportunity for traditional banks and neobanks to better leverage their datasets to create integrated, tailored insurance offerings that protect their banking customers while creating a strong engagement with them.

What Frictionless Insurance Looks Like in Bank-Backed Insurance

The rule of thumb that financial institutions should take into account when considering an expansion in insurance, he said, is that “it’s about making things as easy as possible for the customer to every step of his insurance journey ”.

For consumers, Poole said, the real test of convenience comes the day they have to file a complaint for something. This is the real moment of truth, and it is up to the financial institution (FI) to determine how each touchpoint in this process can be optimized for the needs of consumers.

What this means is that it’s time to end things like 30-page policy documents in a tiny font – because no one wants to read this. This means eliminating the 45 minute wait on the phone to speak to an insurance agent in order to get an answer that could be answered just as easily, if not better, with a dynamically rendered website with a good FAQ ready to go. consulted.

“When a customer comes in to make a complaint, do we need to ask the standardized and generic sets of questions when in reality we can dynamically render the complaint forms just to ask questions relevant to that complaint? And can we use this data that we have already used to quote and sell the insurance policy to pre-populate a lot of responses to automate and streamline this process for the client? “

Perhaps more importantly, when it comes to paying claims, he said, with all the options to pay a consumer digitally and instantly, it’s time to kill the check and the tradition of someone who waits near the mailbox for his claim to be paid.

This ensures convenience, customer satisfaction is high and customers can go about their business. Now is the time for financial institutions, including traditional and challenger banks, to embrace their data and use it to unlock new bespoke insurance opportunities that will drive revenue and customer satisfaction throughout the market. banking experience.

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NEW PYMNTS DATA: SUPERCONNECTED GENERATION – THE UPCOMING USER AUTHENTICATION CHANGE

About the study: Superconnected consumers use a variety of connected devices to interact, buy, and pay online, but say password authentication is slowing them down. PYMNTS surveyed 2,127 consumers and found that these highly connected and highly desirable customers want financial institutions (FIs) and merchants to ditch the password and provide a better and safer way to authenticate online.

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