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Standard Bank taps AI to boost insurance business

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 17 May 2021

Big-four bank Standard Bank is using artificial intelligence (AI) and machine learning to predict those clients likely to cancel their insurance policies.

The initiative by Standard Bank’s insurance business, aimed at democratising data science and improving client service, was recently recognised by US technology giant Microsoft.

Last year, the bank told ITWeb it is also dabbling with blockchain technology to process motor vehicle claims.

A recent report by consultancy firm Mckinsey says AI and its related technologies will have a seismic impact on all aspects of the insurance industry, from distribution to underwriting and pricing to claims.

Using AI and machine learning, a cross-functional Standard Bank team has developed a model that allows the insurance business to predict which clients are likely to cancel their policies, among other use cases.

In an interview with ITWeb last week, Dharmesh Kalain, head of business intelligence for insurance at Standard Bank, said this is part of an ongoing programme to develop “self-service analytics” capabilities within the bank, whereby employees are able to analyse data and generate insights – even if they are not data specialists or data scientists.

Earlier this month, the team behind this initiative was invited to present the solutions via an on-demand session at the global Microsoft Business Applications Summit. Further, the approach was featured in a keynote address at the annual summit.

“We have proven that data analytics can be democratised using the power of AI, and this will further empower the Standard Bank workforce as we accelerate the implementation of our future-ready strategy,” said Kalain.

“We can now quickly build machine learning models without the long wait times associated with the traditional approach by data scientists. This capability allows us to better understand our clients and solve everyday business problems at a rapid rate.”

In the first major use case, the team is using the model to predict which clients are likely to cancel their short-term insurance policies, and why.

This allows Standard Bank Insurance to proactively reach out to certain clients to find new ways to satisfy their needs, and ultimately, to improve client satisfaction and retention rates.

The model analyses a range of data points and is continuously learning, says the bank.

In another potential use case, it adds, the model could be used to forecast business volumes based on factors such as marketing and COVID-19-related lockdown restrictions.

It could also predict whether new products or app features are likely to be successful, and can assist with operational budget forecasting to ensure the decision-making is made more efficient.

For instance, the bank explains, the insurance business’s sales support team will leverage the forecasting model to plan for peak periods so that it can allocate resources effectively.

“We are off to a good start,” said Kalain. “We will continue to look at ways to use data science that will help enable self-service analytics throughout the group. We are excited about the business intelligence opportunities created by cloud-based technologies, which will ultimately allow us to have a better relationship with our clients.”

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