Are Insurers Ready For a Consumer-Activated Enterprise?

Over the next thirty minutes, 2,500 customers will tweet about the customer experience they had with their bank. Almost two million apps will be downloaded. Thirty thousand customers will file claims with their insurance providers.

Raphael Capelli, managing partner of the North American financial services sector GBS at IBM, listed these numbers in his presentation at the Oracle Industry Connect conference held this week in Boston. It’s time for financial services to move towards a customer-activated enterprise, he explained.

“I think we are underestimating two things,” Capelli said. “The first one is the speed of the move, and the second one is its impact on the business.”

[ How Insurers Can Turn Change To Competitive Advantage. ]

Today’s customers are becoming increasingly more connected. Forty percent of smartphone users check the Internet before getting out of bed, Capelli stated, and 91% keep their smartphone within arm’s reach at all times. More users are willing to volunteer personal data such as GPS location and turning to social networks to obtain information they would normally research on Google.

“Technology is forcing business model changes and challenges,” said Oracle president Mark Hurd in his conference keynote speech. “Social will now change the way we buy, the way we sell, the customer experience and the employer experience.”

The rise of social is a big problem or a big opportunity, said Hurd, depending on how companies look at it. Digitally enfranchised customers pose a challenge to financial services because their expectations for service are radically changing. The incoming generation of customers has sky-high standards for customer service and minimal loyalty towards companies that provide anything less. Going forward, consumers will be more loyal to businesses that can make the right decisions, at the right time, with the right information.

According to Capelli, the combination of big data and analytics is becoming the key differentiator for businesses seeking to pursue higher levels of customer experience. Banks and insurance companies are strong in capturing transactional data, he explained, but are behind in their ability to capture unstructured data.

“This gap must be addressed very, very quickly,” Capelli urged. Disruptive companies are entering the financial services space and gaining market share with new business models that are based on innovation. These disruptors are capturing the customer relationship and creating distance between traditional financial institutions and their own clients, he explained.

Financial services businesses can create new customer experiences by moving outside the transaction and entering the customer’s life. With big data and new cloud and cognitive technologies, companies can leverage customer information to create insight, anticipate clients’ needs, and transform their customer experience into one that today’s consumers have come to expect.

[The mobile employee -- as well as the mobile customer -- are here to stay. Is your insurance company prepared? Learn how to set up and maintain a mobile infrastructure that can support today's needs and tomorrow's expected mobile demands. Attend the From BYOD to 802.11ac: How to Build A Next-Generation Mobile Infrastructure session at Interop 2014 in Las Vegas, March 31-April 4.
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Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio