(Image credit: Dollar Photo Club.)
When most people talk about digital businesses, they focus on sales and service—the importance of enabling omnichannel self-service to improve customer engagement, for example. Although designing a compelling customer experience is a crucial part of a successful digital business strategy, core operational systems play a foundational role in enabling digital transformation.
According to George Grieve, CEO, CastleBay Consulting, “cool” technologies like mobile and portal solutions are in fact “dependent technologies”; and, “if the core systems are data- and function-poor, rigid or hard to integrate with, implementing innovative technologies will be hard, costly, and unsatisfactory.”
Insurers burdened with inflexible core systems often settle for a quick fix by building engaging websites that don’t really offer full self-service. In these instances, form-based customer input is forwarded to the insurer, where someone manually rekeys the information into the core system. Other insurers are forced to recode complex operational logic and duplicate data—not just once, but for each channel solution.
These types of remedies can satisfy the demand in the short-term, but have long-term TCO implications that can severely restrict speed–to-market when changes have to be made in several places.
Fortunately, modern core systems can more efficiently enable key digital sales and services capabilities. Here are a few examples:
Customer Self-Service: To avoid disconnected, form-based quote processes and offer true self-service, core systems need to support straight-through processing—including automated underwriting, rating, and document generation. If customers cannot complete their transaction or get all the answers they need in one session, they will go elsewhere.
Omnichannel Capability: In addition to being able to complete their transactions online, customers also demand choice of channel or device. They expect to move seamlessly from one device to another with a consistent but appropriate experience for each channel—without having to rekey data or provide the same information twice. This is a key element of being “multi” channel and “omni” channel. To enable this, core systems must expose a consolidated customer view and a single source of truth across systems and channels. Each channel should provide a complete view of the policyholder and, regardless of the channel used, each transaction should be executed in real time against a common database and with all customer data. Many legacy core systems are still batch-oriented with policy-centric—not customer-centric—data models, so they cannot support the omnichannel model.
Personalized Customer Journey: Once insurers have established self-service capability across devices, they typically want to start tailoring and personalizing the customer journey. For example, branding differently according to how the consumer entered the site—from a sponsored link on Facebook, from a Porsche dealer site, or by searching for “antique auto insurance.” But this tailored journey should really go beyond merely aesthetic elements, such as background images and banners. For example, dynamic cross-sell/up-sell messages can be based on information about customers and their transactions and interactions to date, while differentiated product offerings, service levels, and pricing can be based on customer segmentation rules or campaigns. This deeper level of personalization must be driven by core systems to avoid the cost of duplicating customer information, product definitions, and processing rules.
To create a truly sustainable digital business, insurers must leverage the capabilities of their core systems and integrate those systems with their sales and service channels.