Standard Bank looks to blockchain tech for insurance claims
Big four bank Standard Bank is experimenting with blockchain technology for processing motor vehicle claims.
So says Deepesh Thomas, digital head at Standard Bank Wealth, in an e-mail interview with ITWeb.
This as the big four bank is aggressively pursuing the digital insurance space, which has been shaken up by the emerging insurtech start-up companies.
South Africa’s big four banks recently upped the ante in launching online insurance products amid the COVID-19 pandemic.
The banks have seen a massive decrease in consumers visiting branches amid the coronavirus pandemic which has claimed over 16 000 lives in SA.
Insurtech start-up companies in SA have also been unveiling several digital insurance products that are disrupting the market.
Standard Bank Insurance, through its Direct Life Insurance Services division, recently announced it is offering consumers the option of purchasing life insurance online.
Thomas points out that Standard Bank recently invested in a low-code insurance platform that allows the bank to rapidly innovate and create products that can be tested with customers in a matter of weeks, as opposed to the traditional platforms that take years of customisation and implementation to get into the hands of customers.
He explains that the platform is powered in the cloud and is based on a software-as-a-service model. “The first product we created was a commercial cyber insurance product, which took us a couple of weeks to roll out.
“The investment in this specific capability allows us to focus on what we call a ‘two-speed architecture’, focusing on enhancing our existing products, services and operations and at the same time investing in our future-ready business by enabling rapid prototyping, new product development and partnering for speed,” says Thomas.
“Using this approach, we can cut product development time down from two or three years to six weeks, giving us the agility needed to meet consumer needs as quickly as they change.”
Regarding blockchain technology, Thomas is of the view that there is a need to make insurance more transparent for both customers and insurers.
He points out that this is especially true for the claims process. “Blockchain allows us to automate certain claims and at the same time make the process wholly transparent.
“For example, we are investigating using blockchain in the motor claims process. A windscreen replacement can be costly. In that process, the cost of assessment of that claim itself is high.
“Blockchain allows us to automate the process, reduce costs of claims and track previous claim behaviour and integrate it with the service provider. Both the insurer and the customer have visibility to the entire value chain as a result.”
Legacy IT pain
Thomas adds that Standard Bank is constantly looking at investing in innovation and strategic partnerships so it can respond to the needs of customers and the market in general.
“We have plans to scale our investment across our footprint in Africa and to further develop complementary products that we don’t currently have available.”
According to Thomas, generally incumbent insurers all share the same pain-point – legacy IT systems which create inflexibility in product development and innovation.
“We believe our investment in this platform will allow us to occupy a unique space in the market; an incumbent with the agility of an insurtech. We also see further opportunities of partnering with other incumbents to help them solve their legacy system pain-points.”
On the competition posed by the insurtech start-ups, Thomas says they are both a threat and an opportunity for Standard Bank.
“On the one hand, they have the agility and nimbleness to innovate and react quicker to customer needs than traditional incumbents; however, what we have seen in the market is that they have struggled to obtain the reach or scale needed to fully transform the insurance market, since establishing of a new brand, marketing and distribution in insurance is typically expensive.
“On the other hand, we see an opportunity to partner and create strategic alliances with some of these insurtech start-ups that fit into our overall vision and customer value proposition. In this model, we bring our brand and scale of distribution to help create a successful partnership and solve some of their pain-points.”