Vertical Industry Communications: Financial and Insurance ServicesVertical Industry Communications: Financial and Insurance Services
Major differences in communications exist in finance and insurance based on user roles and usage profiles.
October 1, 2018
In this, the fourth in our series on vertical industry communications, we analyze communications for financial and insurance services. For earlier articles in the series, see:
Finance and Insurance Highlights
This industry sector touches almost every adult in the U.S. and in most other countries. If a person uses a credit card, an ATM, a local bank, or an investment broker, or if the person has insurance on a car, apartment, or home, or if the person rents, buys, or sells real estate, that person is a customer of this industry sector.
The finance and insurance sector provides services in a variety of ways. Primarily, there is the fiduciary role: The finance or insurance firm is an agent for the customer to keep money safe (depository services), to help grow money value (brokerage services), to convert money into or out of physical assets (real estate, precious metals, etc.), or to apply the money to a future return (insurance, annuities, etc.). Finance and insurance represent about 6% of total non-farm employment in the U.S.
In most cases, finance and insurance enterprises operate on very slim margins, such as the difference between the lending rates for their borrowers and the deposit or CD rates for their depositors. This puts pressure on the IT and communications infrastructure teams to keep costs to a minimum, so it's very important to use best practices for communications technology selection and deployment.
In this article, you will see that large groups of users no longer need a traditional IP-PBX license or phone, and that many others can be served by a basic single-line or softphone option. Together, these choices can significantly reduce communications costs.
Finance and Insurance Value Chain
The value chain elements of this industry can be represented as:
Marketing, business development, and sales – to attract customers
Customer interface – to provide services to the customers, both online and in person
Delivery of the specific services – e.g. money transfers, investment management, risk management, insurance claims, brokerage services, etc.
Back office administration – the steps necessary to secure funds and maintain accounts
Operation of the enterprise – e.g. HR, Legal, IT, Facilities, management, etc.
The communications requirements are different in each of these value chain elements.
As we go examine each of these, hopefully you will see that large portions of finance and insurance industry users are requiring less and less use of traditional voice communications services. Some need only the Foundational Usage Profile, i.e. not even a phone at their workstation. Some are field mobile personnel who communicate using a smartphone that is driven from their mobile device business application software, as reflected in the Field Usage Profile. Others can be serviced by the Information Processing Usage Profile.
The bottom line is that upwards of 50% of finance and insurance industry employees may no longer need the traditional voice services of an IP-PBX. So, let's take a look at each value chain grouping.
Marketing, Business Development, and Sales
Marketing and business development are highly collaborative.
Business development teams, which include such roles as insurance actuarial analysis, are constantly shaping new finance or insurance products and offers. This requires very active sharing of ideas and analysis in order to create services that are compelling and competitive.
Marketing then takes these offers and packages them to capture attention from commercial or retail sectors. Creation and delivery of these marketing packages is also a highly collaborative activity, usually involving both internal and external resources, such as ad agencies and various print and online production houses.
Participants in development and marketing value chain elements primarily use the Collaboration Usage Profile. Communication for collaborative activities are moving almost entirely either to generic team collaboration tools such as Microsoft Teams or Cisco Teams or to more specific collaboration applications such as Workfront that is favored by many marketing organizations.
The collaboration software packages should be expected to provide the necessary communications services, such that the users will not require a separate PBX license for communications, either in-house or to external parties. Also, collaboration software packages will be available on computers, tablets, and smartphones, such that incoming and outgoing contacts by voice, text, or email will be provided through the collaboration app rather than through a desk phone.
Sales roles will base their communications on a customer relationship management (CRM) application such as Salesforce or Microsoft Dynamics, and essentially all continuing communication is managed through that CRM application on the user's computer and mobile device. These CRM applications include the tools for sharing, messaging, and, usually, meeting that sales personnel need to consult with back-office support and management.
"Outside" or field sales will also use the computer or mobile device for text and voice communications with customers or prospects. "Inside" sales teams will usually be part of a contact center, such that incoming customer requests reach the best possible team member and are always served quickly, with reference to the CRM transactions. Thus, sales value chain personnel fit into the Field Usage Profile, which does not require an IP-PBX license.
Customer Interface
Of course, all finance and insurance companies depend on good customer service to retain their customers, but also to keep costs to a minimum. Thus, almost all finance and insurance firms are major users of contact center technologies and the Contact Center Usage Profile.
However, a major portion of the customer interface is shifting to Web pages, mobile apps, speech interfaces, and artificial intelligence technologies. We are already seeing this in retail investment brokerages and in both consumer and business banking services, and this trend is expected to continue.
Of course, this will modify the Contact Center Usage Profile, as the customer contacts will be expected -- even demanded -- to be provided in the context of the customer's current transaction. We may well see more examples of contact center technology being provided as part of customer-facing applications and Web services, much as we have seen with Amazon Connect in the retail industry as well as from Communications-Platform-as-a-Service (CPaaS) providers.
Retail banking and insurance also include the bank teller or counter agent role. These personnel are entirely engaged in transaction processing for the customer they are facing. The transactions are processed with online applications, so unified communications tools are not needed for these roles. In a few cases, banks are using instant messaging (IM) so that tellers can request a manager's assistance or other support. Essentially, the communications for these roles is provided by the Foundational Usage Profile.
Delivery of Specific Services
This area will vary the most between the finance and insurance industry sub-segments, since this is the actual delivery of the various services. As examples:
Issuing a new insurance policy may require involvement of an underwriter, especially if there is an exceptional risk item in the policy. This will most likely be an Information Processing Usage Profile since the underwriter will most likely make the determination from the documents and pictures submitted with the application. Similarly, processing a loan application will require intensive review of valuation, risk, and compliance documents, again served by the Information Processing Usage Profile.
Processing a property and casualty insurance claim will require field adjusters to determine the extent of damage to the insured property. This will most likely be a Field Usage Profile situation, since the adjuster will need to work in a mobile setting and will be using some form of software application.
Preparing commercial banking services proposals or creating a high net worth investment plan is likely to require the capabilities of the Collaboration Usage Profile.
As you can see, it will be necessary to examine the responsibilities and the workflows needed for the delivery of the specific services and then to match the communications tools to those workflows. However, the three usage profiles named in the bullets above, supplemented by the Foundational Usage Profile, should be sufficient for the range of needs in this group.
Back Office Administration
The back office teams provide the supporting administration for the services of the finance or insurance organization. For example, these important personnel will examine and process account openings or closures, and will respond to customer requests for account changes to addresses, beneficiaries, etc. These personnel perform essentially all of their tasks using the forms or online requests from customers or front-office departments and will process those with online software applications.
Communications with the customer is usually by postal mail, email, or notices in the customer's account. Internal communications with other departments is via automatic notifications that are built into the applications software. Thus, these personnel will be served either by the Information Processing Usage Profile or, in some cases, simply by the Foundational Usage Profile.
Enterprise Support
Most enterprise support value chain communications is provided by the Foundational Services and Information Processing usage profiles . Functional management and executive management, along with their administrative support teams, are communications-intensive jobs, due to oversight and coordination roles. This remains an area for which advanced IP-PBX features are still required, as described in the Management and Administration Usage Profiles.
Summary
Finance and insurance industry enterprises are increasingly finding that the business communications needed for the workflows within their value chains are being significantly revised or even eliminated by two major trends.
First, communications tools are being embedded in websites and mobile apps for customer-oriented communications. Customers will need to speak with an employee only when driven by regulations or when needed to assure authorization and minimize risk. Thus, communication system solutions are shifting to the application software and Web services categories and away from the IP-PBX model.
Second, traditional voice or video communications are being replaced or minimized by the functionality of collaboration software packages used by the marketing and business development teams; by the CRM or business software applications used by field personnel in sales, loans, underwriting, claims, etc.; and by the shift to Web-based and computer or mobile device apps in place of generic contact center activities. As stated, contact centers will still be key in this industry sector, but will increasingly focus on exception processing that requires contextual awareness of the customer's online or on-app interaction.
These shifts may be generational, as the screen-oriented, mobile-first younger customers come onstream, but the shifts will definitely require attention in order to keep the enterprise responsive and competitive.
BCStrategies is an industry resource for enterprises, vendors, system integrators, and anyone interested in the growing business communications arena. A supplier of objective information on business communications, BCStrategies is supported by an alliance of leading communication industry advisors, analysts, and consultants who have worked in the various segments of the dynamic business communications market.
