Even before the Covid 19 pandemic, the financial industry faced major challenges – and these are always opportunities. Melanie Abt, Senior Sales Director Financial Services at ServiceNow, and Dieter Schöne, Senior Manager Solution Consulting at ServiceNow, in conversation about different starting positions at banks and insurance companies, two digital speeds, the glue between the numerous existing systems and what cattle breeding with the usual vertical range of manufacture has to do with financial institutions.
Let’s start with a ray of hope: the Covid 19 pandemic has just shown how important digital offers are. When it comes to online banking, banks have nothing to blame, right?
Melanie Abt: Years ago the banks started to set up a real success model with online banking. According to Bitkom, a good two thirds of all Germans use their bank’s online services. More than half do their banking with their smartphone. Contactless payment has now arrived on the market. Banks have actually done a lot at the customer interface.
Dieter Schöne: The situation for insurance companies is far less favorable. As a result of the changes caused by Covid-19, around half of insurance brokers have recorded an average loss of 40 percent in sales.
Today I can take out insurance online just as digitally as I can set up an account …
Lovely: … is true for many standard products, but personal customer contact is obviously still very important for insurance companies.
Dept: Then there is the difference in the frequency of customer contact. I am in digital contact with my bank almost every day. Check account balance or share price, transfer money, see whether a certain transfer has been received, etc. I typically only approach the insurance company again in the event of a claim. And that happens – luckily – rarely.
Lovely: Accident, fire, burglary, these are all emotionally negative experiences. Three things are all the more important: One: If the customer reports a problem, the process on the insurer’s side must work perfectly. Two: Insurance companies have a very high need to identify positive events through which they can get in contact with their customers. And three: smart policies.
Let’s start with the latter: How can ServiceNow help with insurance contracts?
Dept: When it comes to smart policies, for example, we’re talking about Internet of Things scenarios. Example: water sensor in the basement or the sensory burglar protection of an entire establishment. The sensors provide data and sound the alarm before the damage can get really big. The policy can be correspondingly cheaper.
Lovely: The ServiceNow solution not only triggers a complete rescue cascade. The customer decides on the right communication channels and the necessary interactions.
Dept: With our system, the entire ecosystem can be orchestrated silently in the background. This ranges from the uncomplicated recording of damage – taking a photo by cell phone – to controlling the craftsmen. Our platform acts as a platform for everyone involved, including the partners.
Lovely: In addition, the system can also make suggestions on how to deal with certain situations during operation, for example reminding the homeowner to turn off the water before going on vacation. That goes far into the area of prevention.
That brings us to point 2, the positive insurance topics?
Lovely: The health insurers show how it can be done: Those who are willing to share their vital data not only receive monetary benefits from the insurers, but also advice and support with prevention. From the decision maker to the insurance benefit to the partner in staying healthy. All insurers can benefit from this model.
Dept: Technically, that’s not trivial. A sensor-based solution requires the administration of the entire installation. I have to ensure that the sensors work and that the system not only displays an event, but also processes the necessary actions. Customers and employees can benefit from the mechanism behind this.
Remains point 1, the perfect process of a damage report?
Dept: Let’s talk about the processes as a whole. Banks have invested a lot in their front end. In the backend, a lot has remained the same. This makes the elegant front end superficial make-up that only poorly connects existing systems. Call center employees still use a large number of separate systems. Holistic view of customers: Nothing.
Lovely: For example, only 50 percent of banks worldwide can digitally block credit cards. Even with such a standard process, the degree of automation is surprisingly low.
Dept: The technologies available today would make it possible for a Covid-19 aid loan to be applied for completely digitally at the house bank, forwarded to KfW and checked, approved or rejected there with the help of artificial intelligence. Only if the technology does not provide any clear results would humans have to intervene. The reality is different.
Changing existing systems completely is time-consuming and extremely costly.
Lovely: That is why we speak of two speeds in digital transformation: The data can initially remain in the existing systems, the “Systems of Record”. With the Now Platform we are introducing a level that connects the data and initiates the necessary activities, the “System of Action”.
Dept: While little is changing with the existing systems, the system of action is, so to speak, going off: consistently clear and uniform user interfaces, the customer history at a glance, no double or triple entries of bulky information, ongoing status notifications, automated notifications on possible follow-up topics, etc. Seen in this way, the Now Platform is quasi make-up with a depth effect. The fun factor for customers and employees is high and the degree of automation increases significantly. This conveys great confidence and security, especially when it comes to filing a claim.
Can you give some examples of what ServiceNow can do specifically for the financial industry?
Dept: ServiceNow can, for example, digitize customer inquiries such as ordering a replacement card, inquiries about payments, credit limit increases, issuing new credit cards, withdrawing erroneous payments or duplicating a receipt, across departments.
Lovely: Today employees still spend too much time looking for data and information. They often manage the operations using spreadsheets and email. This leads to unnecessary waiting times and a lack of transparency for customers and frustration for employees. In addition, the vertical range of manufacture at financial institutions is still very high. If car makers had the same vertical integration, they would raise the cattle to get the leather for their seats.
Dept: It’s adorable. But you don’t have to feed and massage the cattle by hand. All those involved would benefit from end-to-end process automation.