The benefits of automated identity verification
Sung Feng Wu, Vice-President of Travel & Ticketing with SafeCharge, explains how automated identity verification could streamline the insurance experience
Expanding an industry online has become normal and has given business benefits to many. The travel industry in particular has become more accessible for consumers and far more efficient for businesses. This also means that other industries connected to travel – like travel insurance and insurance in general – have become a digital business. But despite the plethora of benefits that the digital landscape has brought to the industry, it can often be a double-edged sword.
With increased reach, accessibility and customer base, also comes a rise in digital fraud. With digital fraud, insurers are fighting a two-headed beast; making sure that they do not fall prey to potential scammers but also ensuring that they remain compliant to regulations such as eKYC, GDPR and AML. Although general insurers and insurance brokers are not subject to specific AML rules and the Money Laundering Regulations, they still need systems and controls to prevent financial crime.
However, while staying secure, they also need to make sure they maintain a frictionless user experience for their customers. Lengthy identification forms can drive away customers which ultimately pose a threat to insurers’ bottom lines. These often-conflicting criteria mean operators have to juggle multiple priorities and stakeholders.
Despite the plethora of benefits that the digital landscape has brought to the industry, it can often be a double-edged sword
Building the right verification infrastructure is therefore key to implementing a smooth travel experience that doesn’t forfeit customer security or sidestep compliance requirements. Insurers need to unify these competing needs by automating their identity verification processes.
Reducing costs and driving growth
Automating the verification process and validating customers’ identities in real time means insurers not only reduce their costs by eliminating their manual workload, but also minimise the risk of making manual errors. Without automation, the whole experience can be frustrating for travellers, who often buy their travel insurance at the last minute and will simply go to the next provider that will give them what they need quicker.
By automating the KYC process, insurers can reassign their resources to other revenue-generating functions of the business that require human expertise, ultimately helping them to identify new business opportunities and drive growth. Furthermore, traditional KYC providers can generate false positives and lack access to crucial databases, which can be mitigated by automating the use of multiple verification suppliers.
Remaining compliant
In the wake of GDPR and PSD2, automation can also help insurers adapt quickly to the latest regulations. GDPR, for example, requires institutions to provide a certain degree of assurance over personal information. With the insurance industry needing to know without a shadow of a doubt the identity of the person they are insuring to ensure they are not being subjected to fraud, automation can streamline and simultaneously cross-check multiple complex qualification requirements. No longer will customers and insurers need to repeat the time-consuming verification process for each transaction – rather, travellers benefit from a set of solid authentication credentials that can be used for future transactions, while insurers gain a compliant, 360-degree view of their customer.
Building customer loyalty
Automation also ensures that the verification process is fast, effortless, and conducted in record time. This means travellers experience a smooth and seemingly easy onboarding and verification experience, leaving them to form positive associations of the operator and making them more likely to use their business when they travel again. This helps insurers maximise their sales conversion, reduce drop-off rates, and encourage customer loyalty. By facilitating a painless verification process, automation also leaves room for customer acquisition through positive word-of-mouth.
With digital fraud, insurers are fighting a two-headed beast
The rise in fraud for insurers
The troubling issue for insurers is that, unfortunately, scammers are becoming more prevalent, and it is not just holidaymakers trying to make some extra money with a fake claim, but more professional fraudsters that look for new and nefarious ways to con an insurer. Therefore, in order to verify a customer’s identity, insurers need personal information from their customers – however, customers also want to feel secure that they are choosing the right provider and are not being conned into divulging too much personal information.
In an online world, focusing on travellers’ digital identities may be the solution – by using an automated verification solution that incorporates multi-vendor checks to capture and analyse customers’ information in real time, insurers can generate a unique online footprint for each customer that is difficult to replicate or steal.
With more operators understanding the importance of the customer experience, the identity verification process is now a key priority. For insurers looking to generate real business value from their verification technology, an automated solution is the answer.