Mobile apps are the new bank branch…will this kill the current bancassurance model?
Banks would never forget their customer’s name and address in branch, so why forget online? Aventus CEO and co-founder Peter Goodman explains how the Aventus platform is driving digital bancassurance transformation.
Mobile banking apps are effectively the new bank branches, with the benefit of being able to visit them on your phone at any time of the day. This in itself is an amazing evolution, resulting in new levels of time-efficiency and convenience for the mobile consumer. There is, however, a glaring inconsistency in the digital transformation of banking services …bancassurance.
We’ve spent a lot of time working on the Aventus Platform proposition for bancassurance. Bancassurance is defined as a “the selling of insurance products or services by banking institutions”. Historically this has been something that is delivered in branch, via cashiers and advisors. As consumers are now spending their time and money in-app rather than in-branch, however, the selling of third-party services needs to evolve too.
Industry analyst CACI predicts that 72% of the UK adult population will bank via a phone app by 2023, limiting branch visits to twice a year on average*. By leveraging Aventus, the digital bancassurance platform, we can dramatically improve the customer experience within the new (app) branch.
Evolving bancassurance is a necessity, not an option
As digital transformation within financial services begins to take shape, High Street Banks are under pressure to focus on the customer-centricity that has led to the success of a flurry of new challenger banks. This results in a large investment in innovation within incumbents. For example, HSBC is making plenty of noise about having spent $2.3 billion** on improving its artificial intelligence (AI) and digital capabilities around the globe.
Having already delivered an app experience which delights their customers, however, the challenger banks have a very different challenge to overcome. As many have focused on the current accounts, growing the marketplace and third-party product partnerships becomes critical as they look to increase revenue. Insurance is one of the most lucrative products to offer in this space.
These emerging banks will find that they are restricted by legacy insurance systems from delivering a customer-centric insurance journey, just as the incumbents continue to be. With increasing revenue top of mind, keeping up with customer evolution within insurance is too huge a prize to forget for the challengers to forget – global bancassurance reached a value of US $1,100bn of 2017.*** If the new banks do not seek to bridge the gap between antiquated systems and the digital experience their customers expect, they risk losing out on this revenue opportunity.
The digital Bancassurance future is here, it’s called Aventus
The key to our platform is the API strategy we have followed since day one, focusing on 1st and 3rd party data passing and augmentation, to make it easier to pre-populate answers and assist in assessment of policy ratings. This seamless experience in turn leads to conversion rates well above industry average.
Currently when you buy insurance within any of the High Street banking mobile apps in the UK, your bank will ask you questions that they already have the answers to but are incapable of leveraging in the insurance buy flow. This isn’t because they want to inconvenience you, of course, but because legacy systems preclude them from passing data in a compliant fashion. In an old-fashioned branch, staff members would be able to simply re-type your details into the relevant boxes, saving you any inconvenience. In the app-branch, however, it is on the customer to complete that process. The unnecessary friction threatens the bank’s relationship with the customer and incites them to look for insurance elsewhere.
The Aventus platform solves these challenges, but the customer-centricity offered by neo banks means that customers of the digital age are expecting more than a seamless in-app experience. To truly meet the expectations of the digital consumer, these new banks need to leverage their data and interaction points to offer an insurance tailored to their customer life events, in real-time. The Aventus platform enables “insurance moments”, which allow banks to offer the right insurance, at the right time, in the right place. For example, if a customer makes a high-value purchase, they are instantly prompted to insure the item. When a business creates their first invoice in their bank account, they should be offered invoice insurance. Such relevant and timely insurance product suggestions not only lead to hugely improved conversion rates, but most importantly a meaningful and trusting relationship between the bank and their customer.
The effortless integration means that new or increased revenue streams can be generated within weeks, rather than months or years. The start-up speed at which modern insurance products can be tested, evaluated and scaled on the Aventus platform will be hugely beneficial to the challenger banks as they look to increase and diversify their revenue streams.