Now you can authorise debit orders electronically
AS BITCOIN and blockchain increasingly feature in the media, the questions of who can benefit the most from crypto-currencies and the platforms that carry them become more pressing.
Bitcoin is a digital, global currency that people can use to perform transactions across the internet. Blockchain, as it pertains to Bitcoin, is a public online ledger of all executed Bitcoin transactions.
Jonathan Jardim, senior developer for Rubix Digital Solutions – a subsidiary of SilverBridge Holdings – says insurers stand to benefit from this form of financial technology (fintech).
Blockchain can be defined as a distributed digital ledger in which transactions, such as those made in Bitcoin, are recorded chronologically and publicly.
In essence, blockchain facilitates secure online transactions, and, because it is decentralised and used to record transactions across numerous computers, records cannot be altered retroactively.
Jardim says: “While many believed that blockchain would not have a significant impact on the insurance industry, the rise of fintech start-ups has changed this. More nimble and innovative (at least according to perceptions) than the more legacy-driven insurance companies, fintechs are embracing a host of forward-thinking solutions to attract customers.”
Customers are increasingly on the look-out for insurance solutions that are tailored to their unique needs, resulting in fintechs starting to gain a foothold in the market. This means traditional insurers need to change their approach, not only to product development and customisation, but also to how claims are filed and paid out.
“Distributed ledger technology is about more than just providing a medium for Bitcoin transactions. With insurance being driven to a large extent by the claims process, blockchain seems to be an ideal way to automate processes that are still mainly paper-driven, manual and prone to human error,” Jardim says.
“Already, a significant number of banks globally are experimenting with the technology to improve customer transactions. Why should insurance be any different?”
Swiss Re and several of Europe’s biggest insurers have joined forces to put blockchain through its paces and see how it can make their business more efficient. Their establishment of the Blockchain Insurance Industry Initiate, also referred to as B3i, is focused on looking at how distributed ledger technologies can better serve clients through faster, more convenient and secure services.
Research by accounting firm PricewaterhouseCoopers shows that, although insurers have been slow on the uptake of blockchain, it makes sense given how multiple participants need views of common information. In addition, the removal of a “central authority” record keeper that acts as an intermediary has the potential to reduce costs and complexity.
“The digital business landscape is seeing insurers continually needing to reinvent themselves to adjust for customer demand. Blockchain provides a great opportunity to capitalise on a different way of doing business that benefits all stakeholders, from the customer right through to the insurer itself,” Jardim says.
sizwe.dlamini@inl.co.za THE days of suppliers waiting for written or verbal authorisations from you to initiate a debit order from your bank account are over. Fintech start-up Direct Debit has launched E-Mandate, a valid electronic agreement facility that allows you to sign and authorise debit orders and recurring-payment transactions online from any webenabled device.
Jaco van Wyk, co-founder of Direct Debit, says: “E-Mandate allows customers to sign an electronic debit-order mandate with a mouse, stylus or their finger, thereby giving debit-order authority to the supplier. Previously, the sign-up process came to a grinding halt because the supplier had to wait to receive paper or voice authorisations. Customers are now able to sign up easily and quickly. The electronic signature gives instant debit order, card-not-present or recurring credit card authority.”
E-Mandate has received approval from the Payments Association of South Africa (Pasa), and its sponsoring financial institution is Mercantile Bank.
In the past, you could sign documents electronically, but the challenge came when authority for banking-level transactions was required.
Van Wyk says: “We had to work hard to get E-Mandate approved by Pasa. Thanks to the groundwork we have done, Pasa now makes provision for customer authorisations using voice, paper and electronic means. Our E-Mandate agreement is the first of its kind in South Africa.
“The take-up has been from suppliers that want to go from offline to online sales or from onceoff product sales to subscriptions. Our biggest response has been from businesses offering insurance products such as funeral cover and life insurance, non-profit organisations wanting to automate online and face-to-face donations, as well as from information technology companies.”
After completing and signing the E-Mandate form, both the business and the customer receive a copy of the agreement, which is stored in the cloud for seven years, as set out by Pasa.