Digitally sourced policies jump 100% during lockdown
Canara HSBC OBC Life Insurance intends to have a higher degree of personalization and friction-free processes in its digital journey:
The digital strategy at Canara HSBC Oriental Bank of Commerce Life Insurance has been focused on ensuring that its sales through its website and digital partners continue to grow in the post-covid scenario. Rishi Mathur, Chief Digital & Strategy Officer, says the company has enabled its sales team and bank partners with the right tools and remote working capabilities in record time so that it is able to reach and meet the insurance requirements of its customers. “While there have been few initial challenges, we have been able to enable remote engagement processes and also using the ‘Insurance Self-Network’ platform, we have been effectively able to reach out to our customers. Almost all of our applications are submitted through digital means,” says he.
The company claims a rapid increase in volume of leads and quotes being generated on its website and through targeted digital campaigns and customers have been reaching out online to ensure they are protected during the period of the pandemic.
RISING DIGITAL INVESTMENT
Digital business is an important and growing component of overall business plan of the company. The technology and digital strategy are closely aligned to enable its distribution partners (mainly Canara Bank, Punjab National Bank, HSBC and PolicyBazaar) to create a seamless process for customers, and empowering its employees with right tech tools to serve partners and customers effectively. Mathur points out that the company has seen aggressive growth (over 100%) in policies sourced through digital business in the first few months of 2020-21. The company invested in digital technology to enable its teams to be able to support sales at bank locations an for seamless integration of systems with the bank partners. “We have strong plans to invest in and grow digital over the next few years. Our aspiration is to grow the business at >50% p.a. over the next few years and reach optimal scale,” says he.
BUILDING FUTURE
The company is actively investing in digital and technology enablement initiatives across the organization and the covid situation has created an opportunity for it to accelerate the deployment of critical technologies to further enable its workforce. “Our capex and opex on technology have been growing in line with our business growth,” says Mathur, adding: “We have invested in some critical enabling technology applications such as a revamped workflow, CRM, digital builds for our website and buy journey which are long term investments in building capability for the future and be ready for an increasingly digital world.”
BRAND SEARCH UP
The company uses social platforms extensively to reach out to its customers and showcase its brand values. In 201920, it extended its main campaign onto digital in the form of ‘Promise Batao’, which encouraged people to share their promises of life protection with their loved ones.
Mathur maintains that in 2020, the company has so far strengthened presence on social media with topical and relevant campaigns to keep its audience engaged and the brand alive during these challenging times. “In line with our brand platform of ‘enabling people to fulfill promises’, we ran the Family Promise challenge that gave us tremendous user generated content and the recent Father’s Day campaign coupled with a quiz tool to test what kind of protector father you are. Our overall brand search volumes have been increasing due to consistent presence in digital media and targeted placements. We intend to continue and further strengthen our online marketing and promotional efforts in 2020-21 with fresh campaigns and topical and relevant messaging for our customers,” says he.
The company has over 920,000 followers on Facebook, over 16,000 on LinkedIn and 1500 subscribers on YouTube.
ANALYTICS FOR CRM
The company has been using analytics as a key cornerstone across multiple business processes. Analytics is used to identify high propensity customers for cross-sell and up-sell campaigns, as well as using data enrichment to improve its conversion through targeted campaigns. Mathur says by using existing information and leveraging the power of analytics, the company is now able to create preapproved and pre-qualified offers which are customized for specific segments and can reduce the requirements to be collected from prospects before it can issue them a policy. “Analytics and modelling are a powerful capability which we have leveraged effectively in managing our persistency (through modelling and predic ting lapsation behavior) and in addressing fraud risk and effective assessment of customer profiles with limited information,” says he.
PLANS FOR IT INITIATIVES
Mathur also mentions that the company is committed to building a strong technology backbone and digital enablers in the current financial year, which will help it in business transformation and increasing digitization of the business processes. In addition, in line with the constantly changing and dynamic nature of the needs of digital customers, it intends to have much higher degree of personalization and friction-free processes in the digital journey.
Asizeable majority of banks have started exploring the potential of the cloud as a business strategy but only a few seem to be actually using its abilities and capabilities to support these institutions in disrupting the marketplace. It is a wellestablished fact that cloud can be the foundation for a comprehensive transition that BFSI institutions need to achieve in order to be a serious player in the new age financial services business. Institutions undertaking piecemeal cloud projects may find it difficult to realize the desired results.
When banks and financial services institutions begin to rely increasingly on the cloud, there are questions that come up. Are they still using the traditional 3-tier architecture for new applications? What percentage of the new applications are developed on cloud architecture? Are they adopting hybrid cloud architecture, or there are plans to do so in the near future?
IT’LL BE COEXISTENCE
President & Business Head – IT, Kotak Mahindra Bank, believes the traditional architecture will co-exist for a good amount of time along with new ways of designing and tools for development. “However, the techniques for innovating front-end experience are changing at a faster pace than for the back-end systems. With the evolved landscape, the front-end has to be cloud and microservices have to be ready for a smooth and seamless experience. Serverless computing, dynamic scaling up and scaling down of computer power, multi-cloud, and hybrid cloud integration are capabilities that new age architecture has to leverage to add value to enhanced customer experience,” says he.
HYBRID CLOUD
Sankarson Banerjee, CIO, RBL Bank, says his bank has been moving away from traditional 3-tier architecture for a long time, even for on-premise applications. He explains: “The 3-tier was appropriate for client server applications, but modern web applications do not fall neatly into the 3-tier paradigm; many are 1-tier, 2-tier or n-tier or even not tired at all. Mesh architectures, grid architectures, graph architectures, serverless architectures - all these have been evolving for some time for different use cases and we’ve started to adopt all these different models for different applications.”
He emphasizes that hybrid cloud is about application deployment, not really about application architecture. “It can be applied to 3-tier architecture or (say) mesh architecture equally. It means that the application can sit partly on-premise (private cloud) and partly on public cloud. This is increasingly the go-to architecture of enterprises, since pure public cloud can be very expensive while pure on-premise is very limiting. An optimal mix gives us benefits of scale and flex while managing costs,” he explains.
Gaurish Lawande, Director – Systems Engineering at Nutanix, adds another perspective. Says he: “Modern enterprises use a large data plane; data can now be stored on the public cloud, private cloud, and at the edge. Customers can now choose the platform (SaaS, PaaS or IaaS) depending on the type of workload and what best suits their needs.”
As the amount of data generated by the enterprise continues to increase in volume, it will be important for businesses to integrate and utilize the latest technologies and innovations to extract even greater, real-time value from that data. Interoperability and enterprise-wide access to the data will be key factors for decisionmakers to consider, as they look for an IT architecture that can help them remain relevant and capable of acting, reacting and anticipating any operating conditions or market condition, he adds.
COMPETENT INFRA
Gaurish emphasizes that applications that run the modern enterprise certainly need an infrastructure to match. “They need an infra that that is web-scale, offers various consumption models (appliance, SW or in the cloud), offers a choice between opex and capex, is scalable, and most importantly, is platform agnostic. HCI and software-defined solutions will be seen as fundamental to their continued growth and survival,” he explains.
Given the preference for cloud-based solutions among startups and fintechs and given the cautious approach banks have towards the cloud, hybrid cloud architecture can be a potential solution. What are the new and emerging applications for which the hybrid cloud is an apt model?
Sankarson Banerjee of RBL Bank says the caution of established businesses like banks towards the cloud has mostly to do with the management of change. “Banks already had heavy investments in on-premise hardware that they wanted to maximize the use of, and unlike startups had legacy applications that were not cloud-ready. As banks start transforming into cloud-native applications for their digital transformations, adoption becomes more widespread,” he points out.
He hastens to add that hybrid cloud is not a risk management strategy for going towards full cloud; but can only be a permanent strategy for cost management and data control. He then elaborates: “Cloud is about renting, so it is more expensive and has an additional profit and loss impact. Banks will always mix buy with rent, even as they move to all cloud-native applications.
The only difference will be that even the on-premise will look like the cloud and have similar features so that applications can move in and out. The most cost-effective mix is to have steady workloads on premise and peaks and surges on cloud.”
LONG-TERM DATA CONTROL
He also points out that there is the issue of data control - long term (7-10-year storage or longer) - which is sometimes best done on premise because this period may exceed the lifetime of any cloud contract. “However, this is changing as cloud providers move from being startups to long-running, stable, large businesses able to sign long-running contracts,” says he.
Sanjay Gupta of Kotak Mahindra Bank says cloud adoption for banks entails learning, which is still ongoing and has not matured to the desired levels. Security is going to be the key and hence, security of information (infosec) has to be considered and evaluated as we work towards this and as the usage increases, he adds.
He confirms hybrid cloud is one such way of ensuring data security that enables banks to play an intelligent role between service providers and customers. “Hybrid cloud can play an enabling role to intensify opportunities for new use cases and ensure trust from a data security point of view,” he adds.
Gaurish says BFSI organizations have been some of the early adopters of new technology. Nutanix, he says, is associated with some of India’s largest banks, broking firms, lending institutions and payment companies as customers, which are engaged in modernizing their infrastructure and leverage the company’s Enterprise Cloud Platform to run their mission-critical applications and workloads. “These organizations have been enthusiastic about the potential of technology to improve customer experience,” says he.
DIGITAL INNOVATION CRUCIAL
Gaurish argues that financial companies understand the importance of digital innovation to strengthen their operations and remain competitive, with a shorter time-to-market. “For example, having the ability to launch new mobile services in a matter of days or weeks instead of months, is a huge benefit especially in times of change. They realize that simplifying their IT helps free up resources for other critical business functions such as attending to customer requirements. Ultimately, more FSIs in India will gravitate to the simplicity, flexibility and scalability of software and cloud as new business models,” says he.
About Nutanix’s role in helping these organizations, he says be it with EndUser-Computing, Application or Database Automation, Nutanix solutions have enhanced IT teams’ experience at every stage of execution. “This in turn leads to faster time-to-market and a great customer experience for the customer’s customer,” says he.
Gaurish also says as a service provider, Nutanix has witnessed rapid cloud adoption in the BFSI sector. Both public and private clouds provide benefits for BFSI organizations, he says, but to truly gain a competitive edge, they are increasingly looking to a hybrid cloud infrastructure.
“Hybrid cloud delivers the benefits and convenience of the public cloud, together with the security of a private cloud, without compromising on efficiency and cost. This allows financial companies to be more empowered to move applications across clouds with ease and gain greater control of their IT spend, while remaining confident in the security of their data,” he elaborates.
TRADITIONAL APPS MAINSTAY
Gaurish is of the view that traditional apps will continue to be the mainstay of BFSI organizations for some time. While the cloud is a de facto platform, BFSIs have core systems and applications that are not architected for the cloud and realistically it
will take time for this to happen,” says he, arguing: “Instead, financial companies will adopt a hybrid approach, by moving their data across a mix of public cloud, private cloud / on-premise. As that transition takes place, the BFSI industry can ensure it is ready with the infrastructure and skills to support traditional as well as cloudnative apps.”
IMPORTANCE OF SAAS
He says SaaS has accelerated this trend. “SaaS often speaks directly to business, with the CIO as an enabler, and as they become richer and more common, business starts to gain a direct understanding. This helps greatly with convergence. The main SaaS movers here are GSuite/O365, Human Capital solutions, CRM solutions etc, he adds.
Another development according to him is that convergence will increase. “Everyone is becoming much more digital native,” says he.
Gaurish responds to a specific query on the challenges BFSI companies faced in scaling VPN access and related services to employees working at home during the pandemic: “It was more of a logistical challenge to most organizations, than an ‘IT challenge’. At the beginning of the lockdown, as organizations were forced to adopt remote working almost overnight, the priority was ensuring that employees had access to the resources that enabled them to do their jobs. It was also important to ensure that this access to company and customer data was secure.”
He says for many organizations the task at hand was moving not just a few, but hundreds of employees to the remote working model, and scaling their existing services to accommodate this shift meant they had to invest in even more hardware. “Luckily, organizations realized they had another, better option - moving towards cloud-based services and solutions like Nutanix, which allowed them to quickly scale up or down as per their requirement, and on demand,” he adds.
Such a situation also necessitated the need for a secure control plane. Organizations, Gaurish says, realized they required a comprehensive control plane for holistic administration across systems, storage, databases, clouds, applications and networks. “And the pandemic has forced customers to consider solutions that would make managing workloads super easy irrespective of their data plane,” he adds.
IMPROVING CX
When it comes to customers, today’s c ustomers are digitally savvy, wellinformed. So, when a bank or a financial services institution looks at upgrading the customer journey it would need upgrade of back-end and front-end technologies to Sanjay Gupta says.
CX is the key for making customers adopt products and this is something which has to be a continuously evolving phenomenon based on how customer behavior changes from time to time, he says. Customer behavior has to be understood in terms of segmentation, usage patterns, personalization, transaction cycle time, device friendly UX, incentivisation etc and only analysis of these parameters will result in improving the overall CX.
He adds: “The separation of user interface, APIs and microservices, and light weight front-end pages are technologies that can be deployed to create a good CX. Finally, CX is about engaging through autonomous methods, using AI to get insights and personalise transactions and transition customer journeys into life journeys to simplify day-to-day needs.”
Sankarson Banerjee says there are 2 parts to the issue. He explains: “Part 1: The key CX parameters we look at are usage and adoption. Are people using the features we are launching, and is it a permanent adoption sustained over time? Many digital features seem great on paper but turn out to be difficult for people to understand or unattractive to adopt on a sustained basis. Users tend to fall out of these back into traditional channels. Now that covid has closed the traditional people-centric channels, it is more important than ever to understand why people use (or not use) something, and what helps them adopt it over the long term.”
“Part 2: Front-to-back, we’ve been shifting from traditional monolithic stacks to micro-frameworks and lightweight back ends. The reasons are many - monolithic stacks have long learning curves, large deployment cycles and are often limiting when it comes to paradigm evolution. Micro-frameworks can be mixed and matched, and because they tend to be small and specialized are often quick to learn. They are also more agile when it comes to shortened deployment cycles. As paradigms evolve, micro-frameworks are easy to discontinue in favour of newer frameworks in newer paradigms,” he concludes.
It is common knowledge that customer experience is often the deciding factor when it comes to banking. Today’s customers want personalized interactions, simplified banking and access to their accounts through technology. Banks that can innovate and meet customers’ needs have a huge competitive advantage.