Over the last few years, digital technologies have been transforming the BFSI industry globally. Digital platforms have allowed the banking, finance and insurance sectors to reach and engage customers on a broader aspect, through integrated apps, and on social channels.
While processes like electronic-Know Your Customer (e-KYC) and moving infrastructure to the cloud have allowed insurance companies to significantly reduce their operating time to acquire new customers, banking and finance sectors too have efficiently leveraged technology in order to create competitive advantage through faster trading systems and reduction in operating risks.
Today, utmost importance is being given to digitalisation of the core business processes and reviewing of the organisational structures in the entire BFSI industry. This transformation illustrates the increasing need to introduce digitalisation in banking, finance and insurance sectors for better efficiency. The utter need for innovation and developing empowered solutions that take maximum advantage of advanced analytics, data, and digital technologies has never been more important in the BFSI industry ever before. We are witnessing organisations innovate in expanding services, acquiring customers, delivering proactive advice and applying technologies like block-chain for improved results.
Use of Artificial Intelligence
Transformational strategies are required to be moulded around the benefits of technology in order to gain maximum profitability. Like for all other industries, technology is riding the horse of fortune for BFSI industry as well as it guides the different sectors to prolific growth with utmost ease. The adoption of AI in the banking and finance sector has been gradual, yet technology is steadily seeping into the ranks, efficiently cutting down on various redundant and time-consuming tasks. With the introduction of AI in both these sectors, the operations have become hassle-free, impactful and effective. And with AI in place, cloud computing and digital dashboards are already the norms.
Application of AI in the insurance industry has drastically changed the way companies do business with AI’s multi-facets namely – Text Analytics, Machine Learning, Robotic Process Automation, Video Analysis and Text-to-Speech taking the operations forward. The introduction of virtual claims through AI has made it more efficient to settle and pay claims.
Retaining the existing customers and implementing productive ways to attract the right ones is very important for every industry and especially, BFSI sector. Giving the right offer to the right customer through the right channel remains the key to success for every business. In order to implement this, a business requires trusted contact, relationship, and necessary information about those they look to grow with. While most of the banking and financial institutions strive to full-fill customer stated needs, success generally comes to those who create a product or service that revolves around the customers’ needs.
Today, maximum people prefer an omnichannel journey when talking about buying an insurance product. The most successful insurance companies these days prefer providing a consistent user experience to the customers across all possible channels. It is very important to understand the potential customer at a level where his needs can be addressed as a seamless customer experience completely depends on the understanding of needs. Interestingly, digital transformation in the BFSI industry is not just about upgrading the current operating systems to be faster and cost-effective – it’s more about reimagining the possibilities from a customer’s point of view.
Leverage the Power of Data
Data analytics plays a great part in the digital transformation of the BFSI industry. It helps the companies to better understand the consumers, identify various upcoming business opportunities and reduce the costs of business operations. In finance and banking sector, advanced analytics allow the organisations to better anticipate the loan default or identify the customers who are underpaying. Most of the banking institutions use data mining for a better prospect and client targeting while prioritising the leads and establishing connections with the possible potential customers. Data mining can also be used by the financial institutions in order to reinvent themselves as platforms offering highly tailored solutions to their clients.
Under the insurance sector, data can be combined with behavioural analytics to identify the policy seekers who are a flight risk and offer them customised products for complete client satisfaction. Moreover, in order to be more competitive in the industry, many insurers extract the actionable insights of the customers using Data Analytics. Predictive modelling is yet another important tool which is used under digitalisation of the insurance sector.
Views expressed in this article are personal opinion of Ashish Gupta, CEO-docprime.com and CTO-Policybazaar.com.