How do Insurance Leaders See the Future of Payments?
46 percent of insurance executives want to simplify their payments value chain as higher revenue, lower costs and stronger security will result from changing the consumer payment experience.
According to Anthem CEO’s Joe Swedish as quoted in the Indianapolis Business Journal, “Frustration is pre-eminent and growing by virtue of the intolerance of health care’s inability to match the experiences in other aspects of our lives…We intend to change this dynamic, and our strategy is to create an improved customer experience as a distinguishing characteristic of Anthem.”
Insurance leaders envision monumental changes.
- Reducing the number of fee collectors in the insurance payments value chain (46%), ranked higher than targeted offers (41%) and mobile payments (32%).
- 72 percent are evaluating direct connections with banks—illustrating how insurers may reduce fee collectors.
- 85 percent of banks report wanting to work closer with insurers to reduce costs.
Insurance Payment Systems Went Awry
The multiple fee collectors (card networks and merchant acquirers) in today’s payments value chain can inflate costs, introduce possible debit card number theft and slow down money movement.
Think of it this way: Imagine walking into an insurance office to make a payment. Steve, your insurance agent, tells you to hand your cash to Jim, who will hand it to Joan and Joan will then pay Steve. These two extra people complicate the process. Steve has to pay his employees Jim and Joan for their service. Two additional people introduce added risk of fraud and slow down the payment.
Insurance leaders now plan to remove the middlemen.
Business Outcomes of a New Insurance Payments System
- Lower cost card payments by reducing the fee collectors.
- Stronger security by decreasing the parties transmitting sensitive payment information.
- Higher revenue by engaging consumers with real-time money movement and cross-sell offers.
3 Take-aways for Your Next Staff Meeting
- Post payments in real-time to your billing system.
- Cross-sell consumers with targeted messages in your eBill.
- Prepare to connect to debit card issuers and reduce the fee collectors.
Like pioneers heading west for the gold rush, the finance, education and utility industries plan to simplify their payments value chain. This will raise consumer expectations for insurers. But you have the opportunity to move faster. Grab your shovel, jump on your horse and be the first one to the gold fields.
Related Blog Posts
Slam the Brakes on Gas Pump Fraud and Rental Car Scams This Memorial Day Weekend
The process of secretly reading data off credit and debit cards (aka skimming) could be netting criminals as much as $3 billion a year in the US, according to Bankinfosecurity.com.
As we look forward to Memorial Day weekend here in the U.S., travelers are getting ready for road trips to their favorite destinations. Whether it’s a beach party in Miami, snorkeling in Catalina Island, or even a staycation, payments – and more specifically, payment fraud – is a huge consideration for travelers, especially during the holiday weekend. I sat down with one of our payments fraud experts, Seth Ruden, to talk about what travelers must look out for regarding payment fraud and how they can keep their money safe. Here’s what he told me.
Cutting the Cost and Complexity of Merchant Payments – But Not the Customer Experience
New research from ACI and Ovum, released this week, highlights that many merchants in 2018 are investing in creating operational efficiencies in their payments systems. But the question is, as they strive to simplify systems and cut costs, will customer experience suffer?
Despite the Hype, Machine Learning, Models, Behavioral Profiling and the Customer Experience are Still Fundamental
Think about the last time you got a fraud decline. Where were you? In the grocery store? Buying airline tickets? On holiday? Shopping in the same place you’ve been a dozen times, but across the border? How frustrating was that, what did it do to your perspective, your mood, your confidence in your financial institution? This can be embarrassing and inconvenient, stressful and alarming for the consumer. There are few things that can be more disruptive in our day-to-day lives then the lack of access to your funds, or the care taken by your financial institution after a fraud occurs. According to ACI’s Global Consumer Fraud Survey, 20% of people may decide this is too much and move along to another financial institution.
Cross-Border eCommerce Expansion: A Fraud Perspective
For merchants that are expanding their online presence overseas, enabling the right locally-preferred alternative payment methods and connecting to local acquirers can be a critical determinant of success. But without considering fraud management strategy in tandem with payments strategy, the road to cross-border success could be a bumpy (not to mention costly) one.
The 12 Biggest Security Threats to Payments
Consumers ask a lot of you in terms of convenience, speed and, above all, security. This puts the pressure on you to offer a pain-free consumer experience that is also highly secure. And when you accept payments, you need to secure all parts of your organization. Here’s an actual example: one major breach occurred when an air conditioning vendor was hacked, allowing hackers to access the corporate network and finally the point of sale network. This highlights the importance of understanding the threat landscape we face today.
Maintain Vs. Invest: What the Digital Era Ushers in for Banks
Taking place this week in Brussels, the European Credit Research Institute (ECRI) will host a high-level debate on how policymakers can build on the process of digitalisation of banks to raise competitiveness in light of increased competition from fintech start-ups and tech giants.
Ursinus College: The Future of Campus Commerce is in the Cloud
Sixty-eight percent of schools are moving eCommerce to the cloudi. As Ellucian Live begins to descend upon San Diego this week, ACI’s Gene Scriven took a moment to chat with Ellen Curcio, Director of Student Accounts at Ursinus College, about the future of campus commerce.
Be sure to catch Ellen and Gene, as well as ACI partner and host Ellucian at the event on Wednesday, April 11, for a panel discussion on “The Future of eCommerce in the Cloud.”
Fraud Awareness Month Canada
A couple years ago, I penned a blog post to commend the Canadians on what made their culture so resilient to fraud that it developed the lowest fraud rates in the Northern Hemisphere. It got a bit of circulation and created significant positive feedback. This time, I would like to bring awareness back to Canada about a potential threat as it relates to the increasingly popular Tap payment channel.
Telcos Have a Unique Opportunity to Drive Mobile Payments
We are witnessing a significant and inevitable shift in digital payments towards mobile commerce. In the next ten years, we will see an exponential expansion in the number of devices and applications we will use to make mobile payments. You could pay for your groceries on your mobile, for delivery at home, then two days later receive a message from your fridge alerting you that the milk is running low. By the time you get back home, a new bottle of milk could be waiting for you, thanks to real-time delivery, even by a drone.
Securely Growing Online Sales in 2018: An Australian Perspective
Back in November 2017, I participated in a panel discussion for NORA (National Online Retail Association), where I looked at fraud trends in Australia over the previous holiday shopping season and made predictions to help retailers prepare. Now looking back, I am sorry to say that my predictions were painfully accurate.