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The Connected Life: The Art of the Possible in Insurance

Gathering and Harvesting New Data through “The Connected Life”

The Connected Life, the digital life is steadily emerging. Today’s insurance consumers are increasingly tech savvy and want services on demand and expect them to be readily accessible anywhere, anytime. Because of this, the insurance industry and more specifically, the personal property and casualty insurance sector, is experiencing a significant period of change and opportunity. The primary change agent in this disruption is the significant amount of specific data that an insurance organization can gain for individual policyholders or prospective policyholders in this era of the Internet of Everything.

An industry steeped in tradition, legacy systems, conservative business practices and risk avoidance is now faced with the need for significant, rapid adoption of new technology accompanied by new data analytics models. This change is in-progress and data from the connected car, connected home and connected person is being gathered. The challenge facing the Insurance organization is not the data gathering, but the management, mining and “harvesting” of this expansive data. In fact, Cisco acknowledges five pillars in this space: Connect, Collect, Analyze, Decide and Apply. Focusing only on the first two areas of Connect and Collect will not provide an advantage over competitors. The key focus areas that will bring true value to insurers are Analyze, Decide, and Apply.

Put simply, a competitive advantage can be achieved by those organizations who effectively “harvest” newly gathered data from connected life solutions. Virtually all property and casualty insurance organizations with a top 100 ranking are investigating, testing, piloting or commercially deploying “Big Data” initiatives. These data gathering initiatives include connected vehicle/telematics, connected home and connected health of the individual, and further include value-added offerings for the consumer, while providing the opportunity for insurers to learn a lot about the policyholder or a prospective policyholder. Read More »

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Enabling “The Easy” Button for Insurance

Nearly a year ago, I wrote a blog titled, “Mayday for Insurance and Financial Services,” where I detailed how next-generation customer experience capabilities, such as virtual interactions between business experts and customers, are transforming business processes – such as the “Mayday” button technology offered on Amazon’s Kindle Fire HDX. The purpose of that blog was to explain virtual interaction capabilities and discuss how they are likely to become integrated into the insurance industry in the near future. So what’s changed? Well, I’ve gone from blogging about the changes to come, to speaking at insurance industry conferences about how virtual transactions are now transforming how the industry does business and how Cisco is helping fuel these virtual interactions.

I attended the Property Insurance Report National Conference, and had many great discussions. The focus of the conference was on ways the property insurance world is changing, through consideration of new ideas and the utilization of new tools being built. It’s widely considered that with the arrival of better information and tools, the most sophisticated insurers will be able to separate themselves from those who don’t take these changes as seriously or employ them as skillfully. Features such as online video sales and support are working in the real world for other industries, so how they can be applied to insurance?

At the conference, I gave a keynote presentation titled, “Omni-Channel for Insurance – Virtual Enhanced Distribution & Service Channels”. The presentation specifically focused on how virtual interactions are transforming the insurance industry and improving customer experiences.

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The Advice Advantage: How Banks Can Close the ‘Value Gap’ and Regain Customer Trust

Today’s banking consumers are used to experiences that reflect their likes, dislikes, past histories, and even their future plans. But not always from their banks. These kinds of interactions are more common when buying an online book, streaming a movie, or planning a vacation. Despite numerous omnichannel initiatives, many banks continue to lag in providing contextual, relevant, and convenient experiences to their customers. And while many customers yearn for personalized financial guidance, a Cisco survey of 7,200 smartphone users and bank customers in 12 countries found that for too many bank customers, the choice is between no advice, or what they perceive to be generic advice delivered inconveniently.

As a result, bank customers often try to attain their most important financial goals on their own, via “friends” on social media, or from non-traditional providers of financial services. Moreover, since the financial crisis of 2007-2008, banks’ brand equity has fallen. Read More »

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Big Data Analytics Remains a Big Opportunity for Wealth Managers – Part I

Wealth Management firms are spending billions on IT to differentiate in the market place. Yet the question remains, can “Big Data” have a material impact on the business? Can it deliver business outcomes by reducing risk, increasing assets under management, driving profitability, client satisfaction, products per client, client and financial advisor retention, all while improving the cost/income ratio and return on equity?

These are questions that are being discussed in board rooms across the financial industry and topics that I will cover in this blog series.

In order to answer these questions we need to put the wealth client at the center and understand changing client needs and expectations around how the client wants to be served by the firm. We need to examine external factors such as the impact of game changing consumer technology and unprecedented client access to information, as well as understand how new market entrants are challenging the traditional financial advisor value proposition and business model as a new round of Robo-Advisors hit the market.

Up until recent years, banks enjoyed an account centric transactional business model. What is changing is the onset of unstructured social interaction data as smart mobile devices and mobile broadband Internet usage reach high penetration levels. Device proliferation is leading to the availability of “data exhaust” from mobile phones, tablets, automobiles, video cameras, and from sensors in buildings, streets, consumer wearables and footfall traffic counters. Correlation of such data to better attract, retain, and serve clients can create market advantage.J pagano Wealth Mgt Blog part 1

The “Big” in Big Data comes from the fact that worldwide data volume is doubling every two years with unprecedented volume, variety, and velocity. Ninety percent of the all data in the history of the world was created in the last two years (SINTEF)! The concept of Big Data is about the correlation and analysis of transaction data, social interaction data, and machine/sensor data in a way that can turn data into knowledge, knowledge into insights, and insights into actions in real-time.

So what does this all mean for wealth managers?

As a wealth manager, what impact would it have on your business if you were able to increase the understanding of your client exponentially? Actions derived from data are informed by highly personalized needs predictions that can arm wealth managers with deep insights about their clients, increase their relevance in every interaction, and directly contribute to business outcomes. Big Data can help wealth managers transform the client value proposition and re-imagine the client experience.

The new vision for financial services is that a firm must be present in the financial lives of its clients, any time, any place, on any device, and across any channel.

The firm can no longer wait for the client to come to it. It must be proactive in delivering highly relevant value-added services in real-time and anticipate client needs. The firm needs to aspire to creating a “market of one” experience for each wealth client, understand the needs of and the hierarchy within the household, and move to a client centric versus account centric go-to-market approach.

When it comes to Big Data in Wealth Management start with the foundation, put the client at the center, and define business outcomes. Focus on building capabilities around what is possible while re-imagining the client experience.

Wealth management firms can take concrete steps in the form of measurable business outcome based projects to significantly enhance the client experience. These include:

  1. Define a roadmap for wealth client data analytics maturity. This will identify gaps that can be addressed resulting in more relevant advisor-client interactions.
  2. Establish a wealth client listening system across all channels. Early detection of client behaviors can lead to the identification of issues and sales opportunities.
  3. Create a real-time single view of wealth client data with data virtualization. Substantial savings can be had by leaving disparate data in place while providing managers with a single view.
  4. Establish an analytics driven financial advisor collaboration platform. This helps create market differentiation by maximizing advisor productivity, sharing best practices daily.
  5. Deploy mobile virtual advisor video capability and establish branch analytics. This improves client experience and gives advisors more minutes per day with clients increasing cross-selling opportunities.
  6. Empower advisors with real-time client insights to drive business outcomes. This helps the advisor manage to client life events with much greater granularity and speed.

The choices that wealth management firms make around data analytics in the next two years will determine their position in the marketplace. Can Big Data help wealth managers? With a client centric and business outcomes solutions approach, the answer is an astounding YES!

I will discuss each of the above steps in more detail in my next blog. As always I welcome your suggestions, stories, and feedback!

 

 

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How U.S. Banks Can Transform Customer Interactions to Increase Profitability

You order a movie online and additional suggestions pop up, based on a deep knowledge of your likes and dislikes. You plan a vacation and similar suggestions appear, reflecting your financial state, the climate in which you live (and may hope to escape for a time), and past travel history. These convenient, personalized interactions are common today — and even expected.

Yet according to a Cisco survey of 7,200 retail banking consumers in 12 countries, customer expectations for financial services are not being met. Many of the most valued customers — and not just tech-savvy Gen Y ones — feel disconnected from their financial services institutions. They state that their banks do not know them personally, and are providing advice only on the bank’s terms — in the branch, during banking hours, when staff is available,  — if at all. Read More »

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