The combination of the finance industry and technology has always been a great fit. More than ever though, fintech innovation is driving new partnerships and novel ways to improve the customer experience.
It’s no secret that when it comes to financial services, customers are becoming more demanding. That is particularly true for millennials. In fact, 40 per cent of US millennials have switched banks due to poor customer service. Indeed, more than two-thirds (77 per cent) would switch to receive better service, according to recent research.
Meanwhile, in the traditionally slow-to-change insurance sector, 75 per cent of incumbent insurers “believe the biggest impact to the industry will come from building new products to address the changing needs of the customer”, according to research from PwC and Startupbootcamp.
It’s all to play for, which may be why the financial services industry has the highest current adoption of IT automation (43 per cent), AI (21per cent) and blockchain technology (21 per cent). Financial services organisations are now the earliest adopters of emerging technology.
The pro-tech trend is driving a widely-reported fintech start-up revolution. This is characterised by new consumer platforms like “bank of the future” Monzo. It’s also supporting new partnerships between long-standing players and fresh innovators. For example, Santander created InnoVentures, a US$100 million venture capital fund that invests in fintech companies practising disruptive innovation.
Heavyweight Goldman Sachs acquired Clarity Money last Spring. It offers a personal finance management and budgeting app, powered by AI, machine learning and data science.
The InsurTech ecosystem is also changing, says Jim Bichard, UK insurance leader at PwC in a recent trend report. “Three years ago the hype was about start-ups disrupting traditional insurers,” he notes. “Now the talk – and increasingly the reality – is about start-ups and insurers working together to create meaningful partnerships. All parties are working together and learning from other sectors to solve problems within insurance and react to the changing outside world.”
Who’s leading the way in fintech-powered customer satisfaction?
We’ve picked out some of the most exciting examples of industry-leading tech usage and fintech partnerships in the financial sector.
1 Xineoh: Using AI to model and match customer needs
This B2B SaaS offer lets users “match people with products, match inventory with opportunity, match prices with customer spending propensity, and match people with usage patterns.” This enables “businesses to out-predict their competition thus allowing them to maximise efficiency and customer satisfaction”, it says. Unlike competitor products, the solution can be up and running in just a few weeks. This helps users to create and launch products that satisfy customers. It also reduces churn based on a “deep understanding of what customers are doing and what they want”.
We’ve written about the importance of customer understanding and collecting actionable customer data in a recent Gather blog.
2 Neos: Putting the emphasis on prevention
In the insurance sector, the Internet of Things (IoT) is fuelling services that build in prevention capabilities with a financial services offer. For example, through Neos, consumers connect to in-house smoke and leak sensors and an indoor security camera via an on-phone app, with home insurance linked in. Neos partners include High Street names Aviva, Hiscox and Munich Re.
3 Homelyfe: Satisfying the consumer’s need for speed
Homelyfe is streamlining the insurance application/purchase experience with its partner platform. It allows third party companies to incorporate and implement Homelyfe’s technology and insurance buy flow into their own digital domains. Users access the tool via an app or website and the quickest purchase so far took just 85 seconds. Andrew Craven, co-founder, and chief technology officer, says: “It’s a game changer for the insurance industry, providing a much-needed modernisation of an antiquated process.”
4 Cuvva: Focus on flexibility
Cuvva is an app that offers hourly coverage for any car, and came out of a Barclays Accelerator programme in London. The Cuvva user enters the registration number and approximate value of the car they want to borrow from a friend or family member. Users chooses the time they want to be covered for, and take a picture of the car. Cuvva then gives an instant insurance quote. It even integrates with Facebook so that users can see which friends have cars to borrow.
5 Habito: The chatbot game just got raised
The evolution of chatbots using AI and natural language technology continues apace. According to Gartner, by 2020 chatbots will be handling no less than 85 per cent of all customer service interactions. They’ll also be responsible for over US$8 billion annual cost savings by 2022. Habito’s AI-enabled chatbot lets people discuss mortgage needs 24/7 from any connected device. It has also just added a life insurance offering. Through this, customers assess eligibility by answering as few as nine questions.
Watch out also for robo-advisors (automated investment advisers), which will control US$500 million of the investment market by 2020, according to Investopedia.
6 Clydesdale Bank: Getting customers involved
High Street stalwart Clydesdale Bank PLC/CYBG has opened an Innovation lab, Studio B, in London and Birmingham. It is allied to its app-enabled B banking offer and is “unlike anything else on the high street,” it says. “Studio B enables us to collaborate directly with customers and other interested parties on the design of future banking products and services.” It can then “showcase and test our best ideas with colleagues, customers and members of the public.“
It seems a solid strategy; there’s no doubt that listening to customers is a great way to retain them and grow your business.
7 vDEXI: Customer data is getting smarter
B2B data exchange company vDEXI lets insurers access standardised data from auto manufacturers and intelligence on driving behaviour. This allows them to “select and win” new customers, says vDEXI, which is already working with at least one large US insurer. The company suggests that US$20 billion can be trimmed from motor insurance premiums thanks to connected car technology and the resulting data they can provide.
As the move to AI and online continues, don’t forget that your users will still value a clear path to move from machine to (hu)man when they have a question or concern. This is particularly true when it comes to money and investments, where emotions can run high.
At Gather we know that a loyal, lasting client relationship is your greatest asset. We can help you gain a deeper understanding of your customer more easily with our smart tools, insight and support.