“There are lots of new entrants without legacy systems to contend with who’ve learnt lessons from bigtech players. For incumbents in financial services, the pressure is on to make the shift in gear to keep pace with expectations.”
 

FST Media: How do you see today’s leading-edge digital innovations shaping the insurance industry of tomorrow?

Gandhi: Profoundly! Seriously, the technologies on the near horizon – or which are being rolled out now – will continue to change customer experience and expectations, change the way we service customers, bring about new or altered products, and change operating models.

I see analytics and AI playing a progressively greater role in customer interactions. The data and API economy is continuing to open organisations, competitors, and partners up to business-to-business integration and the capacity to participate in ecosystems. The Internet of Things (IoT) will provide a wealth of real-world sensor data which can help to offer innovative data-driven products.

So, we start to see commonly utilised technologies in analytics and AI which embed advanced and predictive analytics into operational processes. These can give you real operational efficiencies and create another level of support for customer interactions, such as AI being employed through chatbots.

As an example, we’re investing in technologies, such as AI and machine learning, in what we call ‘zero touch claims’. We worked with tech partners to apply IBM Watson’s Natural Language Classifier to enable real-time claim assessments. We analysed large volumes of claims to create an accurate, flexible, and robust AI-driven insurance liability determination engine, and this helps to dramatically speed up the claims process for customers with a really high level of accuracy.

Preferences for digital interactions will drive business behaviour, as well as product and service delivery. New technologies open up the prospect of digital further assisting other channels. At the same time, as customers increasingly interact digitally and demand greater personalisation, the importance of digital trust will also increase.

FST Media: It’s no secret that ‘bigtech’ players – including the ever-familiar faces of Amazon, Facebook, and Netflix – have mastered the art of hyper-personalisation. Should insurers make a concerted effort to keep pace with these big tech service specialists? What efforts can insurers make to meet the evolving demands of an increasingly digital-savvy customer?

Gandhi: Absolutely. They’ve reset customer expectations across the board, and there’s no exception for financial services. At the same time, there are lots of new entrants without legacy systems to contend with who’ve learnt lessons from these bigtech players. For incumbents in financial services, the pressure is on to make the shift in gear to keep pace with expectations.

Knowing your customer is key. That means using the insights at your disposal to save the customer time and give them a dynamic, high-value, and relevant proposition that’s geared to their preferences. Avenues like web chat are really good current media to interact with customers and figure out what they’re after in real time; so too are increasingly sophisticated chatbots. At Suncorp, we’ve invested in rolling out these technologies across key brands. In March, for example, we released the AAMI Intelligent Virtual Assistant (IVA) for our customers. If the IVA can’t answer a question, it will escalate to a live-chat specialist. It has been designed to help customers find answers to questions, without having to wait for an email response or contact the call centre.

Use the techniques at your disposal – and, in this case, data and analytics is a key enabler – whether that’s applied in the digital channel or in assisted channels, such as stores or in contact centres. There’s a wealth of potential in artificial intelligence and machine learning to streamline online processes and make working with us simpler for customers. Keep in mind that digital transformation, technological advances, and human behavioural change will continue to fundamentally change the expectations that customers have. As such, anticipating change is really important.

FST Media: Friends or foes, fintechs and insurtechs are here to stay. How can partnering with these entities benefit traditional insurers, and how effective are these alliances in accelerating digital innovation?

Gandhi: Partnering is key to our strategy, whether that’s internally (because we’re the steward of a lot of different brands) or through external partners that we take on, because we can see they’ve got a lot to add for our customers.

The way fintechs operate has some real attractions for incumbents. Partnering with fintechs is a good way to challenge the status quo internally and keep an eye on the game ahead. It’s valuable to understand why things have happened in a certain way in the past, but the internal disruption that comes with fintechs when they’re bringing new solutions or new ways of solving problems is a good way of orienting yourself to the future. To flip this around, too, incumbents bring scale and familiarity with the regulatory system. So, a fintech working with an incumbent has the opportunity to take a new digital solution to scale.

We see real value in incubation as part of our broader innovation strategy. Suncorp has just launched our Digital Incubator Program, which gives the new wave of fintechs access to mentors, designers, data, APIs and experts, and the opportunity to co-locate in our digital labs. It directly supports fintech and insurtech start-ups; they have the opportunity to use our capabilities and learn from industry experts in banking and insurance. It’s a springboard for them, and an opportunity for us to bring new value in digital financial customer services to our customer base.

The most successful incumbents in the innovation space will, I think, use many strategies, whether that’s working with established partners or through incubation programs, or other less formal approaches which all contribute to taking new solutions to scale. Not all will always succeed – but you’ve got to have the appetite to innovate.

FST Media: Financial services providers copped a severe reputational blow in the wake of the Hayne Royal Commission. In an age of increasing consumer scepticism and mistrust, how is Suncorp leveraging its digital capabilities to rebuild customer confidence?

Gandhi: There is no denying the Royal Commission identified areas in the system which were broken and cases where banks and insurers didn’t always act in the best interests of their customers. Suncorp welcomed the recommendations of the Commission: the demand for stronger governance, greater transparency, and the prioritisation of customer outcomes.

When you’re making the shift to a customer-centred business model with a focus on better outcomes, it provides another incentive to cut through complexity, aim for ease of service, and give customers transparency.

Acting on this is more than just a digital undertaking. But when you’re looking at building customer confidence, having a digital asset like the Suncorp app is key; it’s an interface which can tell the customer about their product holdings right across the Suncorp Group. It brings a high degree of visibility and transparency in a customer-friendly format, but also tips, rewards, and guides if you happen to get lost, via our virtual assistant Scout.

This all works to put the customer in control. It works against, if you like, customers being hampered by an asymmetry of information, and works to build transparency in a way that’s of real value to customers. There are lots of other things we can do, too, which put choice in the hands of the customer – like publishing online ratings and reviews for our core products.
 

FST Media: How does Suncorp incorporate human-centred design principles? What’s your approach to identifying and solving customer pain points?

Gandhi: I’m proud of our team’s catchphrase: ‘making digital human’. It says a lot and it’s all about putting the customer at the centre as we transform digitally.

I’m conscious that human-centred design (HCD) is something of a buzzword and that you can profess HCD without really having the commitment or the expertise to apply it in any particularly sophisticated way. At Suncorp, we’ve brought designers from different disciplines together to embed human-centred design principles into the digital experiences we’re building for our customers. You’ve got to make the effort to link HCD across teams – across business architectures, for instance – so your digital infrastructure best supports human interaction across channels.

When we look at customer pain points, I think it’s critical to look at the whole customer journey, rather than pain points in isolation. We are using a journey mapping approach for key customer experience pathways, feeding in quantitative and qualitative data to identify where we can ease friction points and reduce customer effort. More than that, though, bear in mind that identifying and fixing customer pain points isn’t the full story of design or of meeting and exceeding customer expectations. We need to bring it back to applying human-centred design – our HCD people look at human habits and how they’re changing, track digital adoption, examine how people use digital tools, and predict what they’ll expect channel interaction to look like in the future. It’s a fascinating field that’s alive with possibility to make life easier for customers.

FST Media: It has been said that strategy is good but “culture eats strategy for breakfast”. Drawing from your wealth of experience leading digital- and customer-focused teams, what lessons can you impart to other digital leaders in fostering a culture of innovation and getting the best out of their team?

Gandhi: What I’ve learned is that transformation has a lot of the same prerequisites, regardless of the sector you’re in. You can have a strategy, but unless your team owns it, you’ll have a rocky road. And you have to translate the strategy into something that’s personally meaningful for your team.

So, you have to work hard on your collective DNA: bring a passion for action to life, encourage learning by doing, empower your people to take risks, and foster the sort of environment where you’re constantly challenging your own views, beliefs, and boundaries.

It’s really important to acknowledge at the outset that genuine transformation is a long journey. You have to work through that with a long-term view. But you’ve also got to work through the near-term imperatives – that’s where a real tension can come in – and you have to set yourself up with some resilience and also a strategy to make sure you’re delivering value all the time; that means having an unwavering focus on delivery. Get quick wins by creating immediate value with your current capability. At the same time, you’re working to create new customer value over the longer term with new assets and capabilities. ⬤

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Dr Rachna Gandhi will feature on the Digital Innovation panel at FST’s Insurance Summit, Sydney, 12 September, 2019. Places are strictly limited.
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