For many people, lockdown has meant that the money that would have been spent on commuting, coffee shops and holidaying is now available to save instead. Like me, perhaps you’ve therefore opened an ISA with Freetrade, bought Deliveroo (aka Floperoo) shares via Primary Bid or pre-empted a long-awaited holiday by converting currency using Wise. If you had, you’ll have no doubt appreciated the ease, speed (seconds) and transparency of the payment processes offered by these fintechs.
Looking at insurance, and claims in particular, I can’t help but feel the opposite; that the payment process is hard, slow (a day or more) and opaque. As the payment function is often owned by a silo’d Finance department, re-imagining payment flows tend to fall outside of the digital transformation radar for both Operations and IT teams. That means insurers are missing out on a trick or two. When I tried to add my new credit card (2 unsuccessful attempts) on ride hailing app Gett, I simply downloaded another app, booked my ride and deleted the Gett app from my phone – all in under 2 minutes. The same will apply to insurance. So if you’re looking for more innovation than simple BACS payments to generate lasting customer loyalty here are a few ideas on some solutions for your particular requirements.
Payments In
As sales have moved online, many companies have started to integrate with Stripe. Stripe provides payments infrastructure for the internet and is an easy way to securely accept payments using debit/credit cards or support payment methods such as Apple or Google Pay. A lower-cost alternative would be to take an ‘Open Banking’ approach from a provider such as Trustly. They offer an alternative payment method button at checkout so the customer can seamlessly authenticate and approve the payment directly from their bank account. Stripe and Trustly’s solutions only work if the customer has available funds (which they might not), so offering a 0% interest payment method button via Bumper (think Klarna for vehicle repairs) can help customers cover their claims excess or fund additional repairs that aren’t covered by their insurer. For insurtechs looking to provide bank-like features to accept, hold and withdraw funds on behalf of customers, providers such as Clearbank and NEC Payments offer banking-as-a-service platforms that enable you to provide customers with their own virtual sort-code, international bank account number (IBAN) and payments cards.
Payments Out
One particularly effective way to make (multi-currency) payments to B2B merchants is by using virtual cards (VCNs) from Apiso. VCNs enable you to embed payments into your claim handling flows and provide an effective solution for handling foreign exchange in cross-border payments. The merchant appreciates the faster payment flow and the benefit to the insurer is the prospect of up to 1% cashback – creating a new revenue stream of £1m for every £100m of claims outlay. For B2C payments, we particularly like Trustly’s solution, enabling customers to receive payments directly into their bank account in real-time. Unlike BACS payments there is no need for the customer to supply their bank details as instead of the insurer ‘pushing’ a payment the customer is able to ‘pull’ the payment into their bank account instead, thereby side-stepping potential GDPR or compliance risks. This provides a level of control and transparency that is truly customer-centric and is key to building levels of unprecedented trust.
As an insurtech capability gateway, Claim Technology provides impartial advice and mobile-friendly customer solutions with pre-built integrations into fintechs such as Stripe, Bumper, Trustly, Clearbank, NEC Payments, Apiso and others. To accelerate your digital transformation agenda, e-mail us at hello@claimtechnology.co.uk and claim £2k of innovation funding to automate insurance processes in the cloud.
