This is a good example of what is happening in today's banking and insurance world. Who is the insured in these taxis – the non-existent driver, the car itself, or the firm Uber as a whole? Are you, as an insurance company, ready to soon tackle this technological and financial challenge in the wake of Uber and nuTonomy?
In the traditional, and sometimes cumbersome, financial sector, innovations have for a long time made very small gains. Giant leaps in technological advances didn't always seem realistic, and the sector was assured profit in the traditional business model. Yet the banking crisis in 2008 and the recent monetary policy with zero – and even negative – interest rates have shaken the financial sector to the core. And the increasingly fast technological changes that are being embraced by the public in large numbers are putting the banks' and insurers' traditional business model under heavy pressure.
Challenges in abundance
Traditionally, each bank department had their own IT personnel. Over the years, this has delivered a whole host of customer information which cannot be linked together in any shape or form, making it tough for the banks to form a single view of their customers. The same customer, however, requires an increasingly large amount of digital flexibility. They want the same experience that they have with other service providers on their smartphone in every aspect of their lives, including opening an account or taking out car insurance.
80% of customers in the insurance sector ask their insurer to provide a tailor-made offer and personalized advice for car, fire or life insurance.
New technologies, along with their suppliers, are popping up all over the place. Disruptive, non-banking players are taking a share of the market away from banks and insurers. In the supermarket, you can put a loan in your shopping cart, loans are agreed peer-to-peer and you can call on crowdfunding to get your new coffee bar off the ground. ApplePay is already on the mobile payments market, and Google Hands Free is in the testing phase. This new competition, of which the Apples and Googles perhaps have more capital at their disposal than the traditional banks, are not subject to banking legislation, which allows them to enter the market quicker and in a more flexible manner, unhindered by strict regulation.
How can a traditional bank deal with these challenges and how can it guarantee its place at the table alongside the new competition in the near future? And how can an IT supplier in the financial sector offer a solution to these challenges?
Continue reading on p.22 of the Financial Services edition of our SimplICiTy Magazine.
