Climb the mountain of digital transformation

Everyone knows by now that consumer expectations are higher than ever. The customer experience must be ‘frictionless’, to use the buzzword in the commercial sector. It’s a nice way of saying that the services for consumers must be as easy and quick as possible. Signing documents in triplicate and having to go to a branch to open an account is unacceptable nowadays. And if you’re already waiting in the queue for the terminal at Schiphol, you must be able to take out travel insurance quickly too.

Consumers have been thoroughly spoiled in recent years, particularly by innovative tech companies. It’s precisely those parties, which the financial sector should be watching most closely. Google and Amazon are payment processors now and active in the insurance world. At present, many tech companies still act primarily as digital facilitators or distribution partners for insurers. However, with their gigantic quantities of data and analysis and distribution capabilities, they can also take over the baton from traditional insurers completely.

Tech companies are extremely adept at looking around and discovering opportunities in new markets. They are more flexible therein than the ‘old guard’ in the industry. They are not held back, for example, by legacy processes and systems – an advantage that shouldn’t be underestimated. Because they don’t have to maintain outdated systems, they can spend much more time on innovation. For companies that have organised their services in the same way for decades, change is considerably more difficult.

However, it’s essential to make those efficiency improvements for the sake of competitiveness. Not only because legacy systems are expensive to maintain, but also to create breathing space and to broaden one’s horizons.

If the establishment can make those efficiency improvements, they will be left with more time to use the mountain of data at their disposal for innovation. Apart from a few players, data is still used too little by insurers and banks, in spite of the added value. That’s also the difference compared to the tech industry. It is precisely that focus on data which enables the Googles and Amazons of this world to enter entirely new markets. They know precisely what’s happening before they establish a presence.