Today’s era of total mobility has seen insurance consumers increasingly demanding to receive customer service across a number of different channels – each driving an exponential increase in data volumes. Bombarding systems with queries and operational tasks like never before, this surge in traffic is taking its toll on insurers’ back-end systems. A new architecture, the digital integration hub, is rapidly coming into focus as the ideal solution to ensure that legacy back-end systems are not compromised while enabling U.S. insurers to digitalize their customer and intermediary interactions.
Rewind to just 10 years ago, and insurance providers in the U.S. comfortably relied on the telephone and e-mail. Since then, the pace of technological development has spelled out an ever-increasing number of touchpoints, creating pressure from consumers and intermediaries to deliver a better, faster, more intuitive user experience. In 2019, 23% of insurance executives said enhanced customer experience was their primary indicator of marketing success to support their acquisition and retention efforts (66%) and to increase personalization (60%). Customers expect that information should forever be at their fingertips, through an app or an instant messaging (IM) service. Modern consumers expect a seamless customer experience in which one conversation can be carried out, successively and simultaneously, across various platforms.
Intermediaries, brokers and direct insurers as well as a growing number of third parties are increasingly responding by striving to provide their consumers with information, modeling and fast processing of claims across different devices and channels. As a result, frequency and volume of system interactions across multiple channels are surging. More than ever, systems are being interrogated through a huge range of operations.
Risk arises because the data required to fulfill these queries is stored in back-end systems that also contain business-critical information such as customer data. These back-ends must be kept safe from third-party access – and third-party activity must not interfere with line-of-business systems by provoking unpredictable peaks in queries. Although new front ends have been designed to be remain independent from back-end legacy systems, the front ends often put pressure on the legacy systems, occupying machine time on low-value activity rather than core operations.
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New technologies and automation also pose great risk to existing infrastructures. For instance, new front-end development technologies such as single-page-web-application, html5, css3, angular, react and progressive eb apps (PWA) struggle to operate at the required speed and highlight the limitations of legacy systems. Additional data sources, from distributed ledger technology, big data, IoT, cloud computing, AI or biometric technology heighten the issue of handling growing data volumes.
So how can insurers leverage the powerful potential of application programming interfaces (APIs) without placing their back-end systems in jeopardy?
A new architecture centered on digital integration hubs has distinguished itself as a more efficient system and a means to overcome this challenge. In this new architecture, APIs read data extracted from a “data lake,” which is perpetually updated in near-real time by the legacy systems rather calling data up from legacy systems directly. The opportunities to feed data into the data lake from other sources such as IoT is endless and presents a game changer for the industry.
When gathering data from legacy systems, traditional data management platforms tended to be based on a batch approach, which updated data in the data warehouse (DWH) on a daily basis rather than in the near-real time way offered by digital integration hubs and require hundreds of extraction and ETL procedures. While traditional DWHs can be useful for analytics and reporting, their more infrequent pulling of legacy data makes them unsuitable for customer-facing front ends. Reducing the complexity of the API service layers, digital integration hubs allow for historical and new real-time data to be fused into a single repository that APIs, rather than the back end, can interact with. During peak activity, the digital integration hub can handle the load and leave back-end systems unaffected.
Other advantages that come with digital integration hubs include their provision of 24/7 real-time data and intuitive Google-like search functions. Brokers can seamlessly access data through dashboards or “cockpits” that allow them to manage customer profiles based on a 360° view. Through system integration, flexible end-to-end solutions can help insurers to embark on their journey toward digitalization and meet customer expectations without putting their systems at risk. Insurers should embrace the opportunity to introduce a digital integration hub and connect legacy back-end system integration with new technology and data-sources.
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Today, there are some vendors on the market that can provide one or two of the elements composing the solution, but end-to-end solutions offering all of the above benefits are much less common. Paying attention to the specific needs of the client, experienced consultants can be helpful in selecting and combining different options to fully realize the benefits offered by digitalization.
To find out more, download the latest whitepaper from Fincons Group here.