The financial service industry is challenged on many fronts. Since the global financial crisis five years ago, financial institutions of all shapes and sizes must now address a wide range of issues in order to fully recover and flourish in the new economic environment. One of the most influential elements to this recovery is the hand-in-hand evolution of technology and big data, providing the industry with many opportunities to restore success, to grow and streamline.
Personalising the service in a big data world
Financial services, especially insurers, have always been heavily reliant on data, specific to the individual, to function successfully and tailor policies. In today’s big data world, data success has become synonymous with personalisation, and the use of unstructured information (or big data) to personalise consumer interactions, often in real time, is now expected of all the consumer industries by the consumers themselves. It’s an issue that modern financial institutions, especially those facing competition from consumer marketing-savvy companies like retailers now operating financial services arms, cannot afford to ignore!
And neither should they. Consumer personalisation in finance is a very valuable tool. By harnessing big data as part of an overall strategy, insurers may learn much more about their consumers, and can use that information to strengthen and clarify their brand voices; meaning they can cut through the data ‘clutter’ to better adapt to consumer needs and really connect with customers. In an industry many view as being close to commodity-status where price is the key differentiator, this can be a much more tangible and sustainable source of differentiation.
Cutting through the clutter: How big data benefits insurers
Allowing processes to be intricately tailored around customer need, consumer-centric data personalisation can achieve much.
If an insurer learns for example (through big data), that a customer (who currently has a home insurance policy with them) is looking to purchase a new vehicle (such information might be found through social media), they can present them with relevant car insurance offers (adapting the brand voice) to retain their loyalty. Timing in situations such as this is crucial, allowing for swift, precise action and decisions.
So, big data personalisation is key to clarifying the brand voice; which in turn leads to an increase in loyalty, enhanced customer experiences, and increased revenue for existing customers.. Plus, using data to develop an adaptable voice across communications channels (social media, email etc.) enables insurers to gain new customers, as it makes the organisation and its products more attractive and appealing to consumers.
Well-managed data analytics may also be used by insurers to reduce risk; maximising profit and enhancing service offerings. Insurers rely on information to evaluate and assess business risk, and the insight given by unstructured data (due to its volume, velocity and variety) provides valuable protection. While allowing insurers to better position their brand and service offerings to consumers, big data effectively reduces company risk. For example, car insurers are already using the (optional consumer entry) ‘black box’ to collect data on consumers who believe they are safe drivers – so they can contact and reward such consumers with lower premiums (and vice versa).
Ensuring insurer’s data futures
But for full future benefit, financial institutions must do more than just use personalisation to improve customer communications.
A balanced, appropriate approach to data use and management must always be applied when considering consumer personalisation. Privacy issues (as well as practicalities such as retaining reactivity and enriching customer experiences), are integral to healthy data relationships – and the line between appropriate and inappropriate data use must always be clearly acknowledged for trust to remain.
But as long as insurers and other financers remain disciplined and attentive in their approach to data, the benefits of integration (stated above) will be seen across entire organisations – advancing the whole as a result of precise streamlining, a well-adapted and timed brand voice, and uniquely personalised targeting of niche markets and individuals.
