Everest Group have been in the industry since 1991 and are a specialist research firm producing c. 2,500 reports per year, these include their assessment of the state of the Customer Experience Management (CXM) market.
Through this latest report they estimate the CXM market to be in the region of between $112 and $114 billion of revenues in 2023 for work connected to customers looking for support assisted through digital or human channels. There is an expectation that revenues will, however, be flat through 2025.
However, this accounts for only one third of the market which if taking in-house operations into account would be c. $330 billion, which presents a continued opportunity for the outsource community.
Other highlights include views around channel adoption and predictions of the death of voice are still not coming to pass, when considering include both agent supported voice and conversational AI driven interactions then, 72% of revenues were still coming from voice-based activity in 2023.
The average number of FTE has reduced by 15% since 2018/19 in the 2022/23 report. We know this has been driven by automation, elimination activities, improvements in efficiency, deployment of technologies especially around agent assist. The impact of generative AI has clear contributed to the ability of agents to be more efficient and reduce AHT. However, a survey of over 200 enterprises showed that 20.6% expected no impact to headcount, the majority (37.3%) expected a moderate impact of 5 to 15% and the smallest proportion of respondents (14.3%) expected a significant impact of greater than 15%.
What are clients or prospects looking for?
What insights can we gather from the session that can be applied in our conversations?
- There is still a strong demand for voice
- Deal cycles are longer than they used to be (as we’ve heard in many discussions)
- Increased adoption of GenAI is happening
- There is a desire to develop strategic partnerships, with longer relationships to enable access to better solutions
- Cost optimisation including movement to offshore locations to balance costs remains a focus,
However, when it comes to locations the list of new ones for global English support is growing. More attention is being paid outside the traditional locations and people are talking more about sub-Saharan Africa. Whilst limited numbers have been signed so far, there is a clear interest here. This could be in part be due to people being keen to understand what talent will be needed in 3 years and what skills those people need should also be a consideration as potential clients are now asking these questions.
Priorities for businesses working with service providers still include looking for smart optimisation, operational efficiencies and the collation of insights and data that can inform decision making in the business.
There is a continued focus on the development of agent experience, driving staff satisfaction and making agent roles easier through the use of technology and GenAI to ensure that talent is retained within business, to the ultimate benefit of customer experience, of course.
What businesses want to know is how you can solve a specific problem or challenge. They are now less inclined to say “this is my volume can you staff to that” and more likely to say “this is the problem, how can we create better outcomes together?”.
Customer experience remains critical and there is a movement from delivering an OK experience at the lowest cost, to instead now looking at the end-to-end experience from marketing through the customer lifecycle and then back into the next phase of marketing.
The impact of technology?
As with all changes, consideration needs to be made as to what is appropriate for the needs of your customer. For example, the use of voice in sales environments means that there 82% of activity is still voice led, whereas in Tech support this falls to 61%.
Technology will be beneficial when used in the right contexts, modernisation of existing solutions, the ability to collate data to make decisions around both customer and employee experience, but it needs to be an enabler not just an offering. We need to be clear as to what problem you are using it to solve.
Some clients will forge strategic partnerships with suppliers bringing the right technology and people to solve an issue. Using an outsource provider can bridge the gap from the migration to emerging technologies as outsource partners have people with the skills, knowledge and experience to support that change and can flex staffing requirements as necessary.
Decision making, however, will take longer as a result of the impact of technology change across the wider organisation. Changing experiences using systems and using better data to bring a consolidated view and benefits across the wider organisation means that there will be more stakeholders in the decision making process and therefore it may take longer to make those changes – which could then contribute to the feeling that deals need to be longer in duration to ensure benefits have time to be realised
“Clients don’t want people just running around hitting things with a technology stick, they need to ensure that they consider the benefits”
Sector specific outlook
Healthcare has grown quickly last year and it appears it will continue to do so, Retail has again grown well this year and is forecast to grow faster in 2025, travel and hospitality whilst flat this year is expected to grow faster next year as the sector starts to look more at connected experiences using generative AI.
There is expected to be some reduction in headcounts in the Telco and Media space as providers look to squeeze costs and use technology to deliver savings.
Of course, the willingness of customers to engage with AI differs by sector. Healthcare and travel and hospitality have been among the slower adopters. As technology has moved faster, BFSI and Retail are embracing these changes too, with a focus on use cases to improve experiences and end to end solutions. Agent assist, post call automation and agent training are all areas where AI solutions are moving into production. Less progress has been made on knowledge management and least of all on the use of sentiment analysis.
Most progress has been made with transitioning to production, where there is a direct impact to the customer. The focus so far in the past 12 months has been to deploy Gen AI into “safe” internal use cases, initially.
Evolving expectations
Clients expect more than ever before from outsource providers. In terms of the top 5 capabilities / requirements, some themes are consistent with those that have always existed, however in some cases there may be more openness or need for support, especially when using new and evolving technologies.
- Uplifting quality
- Elevating customer experience
- Implementing new tools and technologies
- Productivity
- Ability to introduce new ideas
AI skilled agents who are supported by automation allowing them to be more efficient and effective and deliver better experiences as a result, is becoming a standard expectation. Future capabilities will include near real time voice-to-voice translation with minimal lag. The opportunities that this may present need to be considered, but this could support many clients, as a result there needs to be careful consideration.
If you wish to chat about or need support in any of the areas discussed then feel free to contact us.
Running a contact centre can be tough and a real challenge, so it is always good to know you are not alone.
However, tapping into our teams experience in running and managing a contact centre operations over the past 25+ years, we thought we’d highlight the top 4 common contact centre challenges seen in centres today:
- Call Duration – this isn’t talking to agents about AHT, but inefficient process resulting in higher AHT is still an issue for many. Agent knowledge/competence could be part of the solution, however so could appropriate automation.
- Repeat Contacts – whether intentional (process requirement) or unintended as a result of unclear information these contribute to:
- Cost to serve
- Customer retention
- Agent frustrations
- Improve Service Levels – in recent years average speed of answer has increased, queries have become more complex and recruitment has become tougher!
- Understanding The Possibilities – Technology is evolving at pace and as a result it can be hard to understand the art of the possible. The CCP network has >120 technology and >220 outsource partners – so there’s plenty of options to find the right fit.
Are you facing similar challenges within your contact centre? Not sure where to start when it comes to finding the right fix? Weel look no further than CCP, we are here to provide both generous and equitable advice when it comes to your customer contact operations.
Click here to contact the team today.
Reviewing the results there was a clear view that people know their roles, the different aspects of it, the impact of people development and appropriate investment in it and the importance of the ongoing development of people in contact centre environments.
We know why we are here and what we are supposed to do
This survey area scored strongly and aligns with wider miPerform research around front line staff and how they are engaged, there is no shortage of data at a senior level, however those who engage directly with customers are perhaps less likely to see the strategic objectives of an organisation. There are still opportunities to unlock further value from customer conversations, ensuring people have the right skills and knowledge to engage in these.
I know what excellence looks like in my role
84.5% of participants in the survey believe that they know what excellence in their role looks like. However, the ability to demonstrate this to customers and to clients is something to be considered, how can we ensure that we are measuring and reporting the service that is being delivered? Measures like CSAT are always considered, however the retention of both customers and critically employees, which could be the most significant metric as staff who are engaged, know their role, are confident in their delivery are happier in their work, they will not only delight customers but will be less likely to leave due to feeling undervalued. This results in unquestionable benefits the employee, customer and business.
“It is essential that leaders and managers have the capability to maintain a culture where people can connect with the role”
The ability to deliver continuous feedback in the right way so that people feel supported and empowered is critical to people wanting to, and being able to share that knowledge with customers.
Staff development plays a huge role in brand reputation, perhaps as an output of increase productivity and delivery of service levels, with 94% suggesting a strong correlation to the impact on this.
However there was sometimes a clear disparity between the amount of time available for staff training and the recognised benefits equally there were times when the time available was much higher than expected. Another key theme was there was a gap between in knowledge about what specifically people needed to be trained on, to ensure that there is value in coaching there needs to be better analysis as to where the training is needed and what technology can be used in supporting this.
Ensuring that coaches and trainers have the right insights to direct training as effectively as possible can be supported by technology:
- Focusing efforts with support on the right subjects and with the appropriate delivery methods,
- These may be conversations within the operation, not necessarily removing people from the operation to sit in a training room
- Remote working needs to be considered in this context with the appropriate monitoring and support,
- Training still needs to be specific to the needs of the individual,
- Which enables us to think more about how we make training and coaching really count for the individual?
Tools like Cognexo as a micro learning solution can take as little as 2 minutes per day and be delivered through a channel aligned to the daily tasks of the staff member, therefore engagement levels are maintained above 91% as it is part of the daily routine.
Behaviour shifts are the result of the right conversations.
It isn’t always necessary to take people out of their day-to-day environment to change culture or behaviours and the role of the manager in ensuring that they are “walking the walk” being a visible leader, providing coaching and support, leading with the right insights ensures the most impact.
Managers must be able to understand their people as individuals, that the outcomes that need to be delivered for the customers require appropriate trust and autonomy due to the unique nature of customer interactions which is increasingly pertinent as AI and automation completes the easier tasks, we need to consider what measure and how we manage. Whilst this may feel obvious, the shift to home working may make access to these skills harder for our next generation of Team Leaders.
We need to listen to the experiences of the front line staff, the roles are getting harder, but we need to ensure people are allowed to contribute to the process, to provide feedback about the processes and how things may be done differently, technology may be used for surveys with employees and to consolidate those responses, with a workflow to the management to ensure that all staff feedback is captured.
“Managers need to ensure that they understand their people on a personal level”
Enabling people to review their own performance and to track against the expected levels of delivery empowers them to properly understand where they are, how they are doing and where they may need support.
This can be used as a tool to support culture change, however, when time can be limited because of operational pressures so the subject matter and insight of what training or coaching is critical to get the right support to staff at the right time.
Budgets may not always be allocated to ongoing training and investment time may not always be scheduled as often as people may like, ROI models around attrition reduction benefits and how this filters through the business in other impacts, the role of ongoing personal development to retaining staff and supporting the growth of brand reputation,
In a world of AI we still need to ensure investment in people
A 1% increase in engagement can deliver a 2% increase in productivity, there are multiple benefits as a result, using coaching and learning to deliver contact centre culture is not achieved through pizza on a Friday, technology can be useful but we need to ensure that people within the organisation are considered in the mix, from agents and first line manager levels, who need to see that the insights are being used through to the senior team who may need stronger insights to drive strategic decision making.
If you’d like to talk further then please contact me directly and we can look at how we can help.
Guest Author – Elaine Seculer (Head of Marketing at Taskaler)
As we dive deeper into the knockout stages of the Euros (dare we mention it), did you know that Pakistan is the largest producer of hand-sewn footballs? In fact, the official footballs used in the last two FIFA World Cups were crafted in Pakistan.
But there’s more to Pakistan than footballs; it’s also emerging as a leading location for outsourcing, offering unique benefits over many offshore countries that might first come to mind, which places Pakistan as an attractive alternative well-worth considering.
We speak with Jawad Farooq and Elaine Seculer of Taskaler to get the inside track on Pakistan as the latest outsourcing destination of choice!
1. The Rise of Pakistan in the Outsourcing World
When you think of outsourcing, countries like India, South Africa, and the Philippines are the destinations you probably first think off. They’ve been popular choices for years. However, these markets are becoming saturated, with increased costs being felt of late – that’s where Pakistan steps in!
A hidden gem if you may, not yet overrun with competition, meaning you can find high-quality talent at very competitive rates. Early birds in the market are already reaping the benefits!
2. Why Pakistan is Cost-Efficient?
Pakistan’s stock market has seen unprecedented levels of growth of late. The KSE-100 Index, tracking the largest companies listed on the Pakistan Stock Exchange is at a 6 year high, making it the top performer among Asian frontier markets, thanks to improving economic conditions and a favourable IMF deal which boosted investor confidence.
Whilst the country’s currency (rupee) is relatively weak, this has been highly favourable for international businesses who receive a healthy exchange rate against the dollar.
Did you know? Pakistan’s outsourcing rates are even more competitive than India’s, which has long been the go-to for outsourcing!
3. English Proficiency and Education
Pakistan’s Constitution and Laws are written in English. English is recognised as the official language and is widely used in business and higher education. This means that communication is smooth and easy, with about half of the educated population speaking English.
4. Big Brands and Business Environment
Pakistan is already attracting big brands, with businesses like Audi, BMW, Samsung, Unilever, Nestle, Carrefour, and Standard Chartered all successfully running their operations in Pakistan for years now. This shows that Pakistan has the infrastructure and capability to support large-scale business operations. Plus, with Pakistan being four hours ahead of British Summer Time (BST), you can easily set up shift patterns that cover your core business hours, making it convenient for meetings and collaboration.
5. A Thriving Start-Up Scene
Pakistan isn’t just about established companies; it’s also buzzing with start-up activity. There are numerous start-up incubators, funded by both private investors and global giants like Google, fostering a vibrant and innovative ecosystem.
Piqued your interest?
If you’re curious and want to explore more, drop us a line – we’d be more than happy to help you discover all that Pakistan has to offer for your business!
Like it or not, AI is coming and it will change how we talk to customers. But there are risks. What if those customers are vulnerable? Can AI look after them properly? And while we’re thinking about vulnerability, as AI increasingly consumes customer data, what needs to be done to look after that too?
On June 25th Customer Contact Panel hosted an event with CXReview at the IBM Innovation Studio in London on this very topic. Speakers included Gemma Woodcock of IBM, Jim Steven of Experian, Elaine Lee of Reynolds Busby Lee and Keith Shanks of CXReview.
Steve Sullivan of CCP was master of ceremonies and led the discussion.
Here we outline the key takeaways from all speakers for what we can do right now to mitigate those risks and set contact centres on a path to responsible use of AI.
Contact Centre AI: Not if but when
- The event focused on: Outlining the risks and considerations when implementing AI and automation, and
- The adoption scope within the Contact Centre environment, specifically supporting agents to deal with the ‘cognitive load’ when handling vulnerability and more challenging customer contacts, whilst maintaining quality and overall customer experience.
While there was much discussion around Al, Generative AI and the inevitable impact on our roles, we are still a long way from a time where agents will not be required in customer contact; we’ve evolved too far as humans for this to change. However, ignore AI at your peril.
“Consider those that did not take the internet seriously, those on the high street who failed to embrace it and look at what happened to them”
Gemma Woodcock of IBM
The AI data question
Ultimately the use of AI depends upon building models that can make predictions that add value. These are dependent on what the source data looks like. Ensuring correct identification and use of the right material is essential; wrong information can lead at best to incorrect responses and at worst to biases or hallucinations, all of which carry considerable risk to brands and their customers.
Consider also that using the questions that your customers ask you to inform future responses may not be typical – for example they may have arisen from an unusual event at a specific point in time – and if you treat them as such, this may lead to incorrect or just plain weird future responses. . Moreover, if the answers to those questions relate to your own IP and you are using open-source solutions, you may be making your IP available to others.
Additionally, who you are sourcing your solution from needs to be considered. In March 2023 alone there were 14,700 start-ups established in the AI space. Which means due diligence and an understanding of how AI solutions, which are often highly specific by nature, work together is essential.
That isn’t to say everything in AI is new. The early concepts and mathematics of AI date back to the 1950s and 60s. Over the last decade or so, increases in computing power have begun to make AI more commercially accessible. Which means AI and machine learning is already well-established in using models that look at patterns, as we’ve long since seen for Amazon purchase recommendations, or in more recent years the introduction of machine learning and explainable AI in credit scoring.
As is often the way with AI, these are specific use cases with an enormous amount of investment behind them to make them function well, particularly to allow for the use of AI in regulated industries. One aspect of these is that they depend on properly labelled data. Which is already well-ordered and highly specific in the world of credit risk. But the process of labelling data, especially data that isn’t already extremely well-ordered, is intensive and expensive.
Imagine then the complexities of labelling data in natural language usage and you begin to understand the significance of recent advances from the likes of IBM’s Watson – or the oft referenced ChatGPT – in Generative AI. In customer contact, these are what we call “foundation models”. They are pre-trained and need prompts, but can’t answer questions specific to your customers without customer data and an understanding of how customers are likely to interact. These large language models can be applied to this process – they can use
labelled data and the numerous ways to ask the same question in the past to develop further to meet your and your customers’ needs.
4 key tests for effective AI
The use of Generative AI should have 4 key considerations:
- Open: use of best technologies and innovation
- Trusted: can you trust the outputs
- Targeted: designed on specific use cases
- Empowering: ability to augment the human role/experience, not to replace it.
Pretraining and governance funnels need to be in place, with considerations ranging from the benefits of the use case to ensuring only the necessary inputs go into the model. Put simply, if nothing “inappropriate” goes in, then nothing inappropriate can come out. Additionally, this approach means it should cost less to set up the model and take less energy (power) to run. Remembering just how energy intensive AI can be, this is an important consideration.
When it comes to Risks, Regulations, and Technological requirements, there needs to be a level of governance. And during scoping of your solution, you need to consider the ongoing effort required to support it to ensure it meets – and continues to meet – strict governance. AI is not a fire and forget implementation.
AI and the bad guys
“It isn’t only the good guys that are using AI and Automation, ‘mal-actors’ are using it to enhance their processes too.”
We were fortunate to be joined by Jim Steven of Experian who shared with us some of the activity he has seen from his work in managing data breach responses. This has implications on multiple levels.
- Consolidation of data: bringing everything together to enable automation could mean that you are at greater risk if your business is breached. Additionally, using suppliers with cloud-hosted data may mean that their breach becomes your breach too.
- Benefits of automation are not exclusive to those doing good: we are not the only ones that can leverage great technology. Those with mal-intent are using it too; and they will typically do so more quickly.
- Consideration of how those impacted by a breach find the experience: when a breach occurs, it is likely that it will be across your entire estate of stakeholders. Therefore, it is not just your customers that will be impacted – it will also be employees, former employees, pension members, contractors and suppliers.
Communication with people who have had their data compromised is personal, it needs to be managed in different cohorts and isn’t really something to automate – especially with your employees, who you will need to support your customers through the situation with empathy and understanding. Not only that, but it’s important not to lose sight of the millions of customers who don’t currently interact online at all – they aren’t typically digitally savvy and may not even consider that their data is an important asset that can be used for nefarious means.. They must be informed and supported in ways that work best for them, cognisant that it is us who hold their data digitally.
Moreover, data breaches are not always one way – it’s not always about theft or ‘acquisition’ of data. Looping back to the theme of ensuring that you consider what data is held in the system for interpretation, bear in mind that even the simplest upload of additional data to your systems can impact operations. For example, there was an accidental, entirely innocent, upload of bad data to air traffic control systems in 2023 that resulted in 98% of aircraft being grounded.
People accessing and uploading bad data to your network could equally paralyse your organisation. Be mindful that centralising your information management may enable system vulnerabilities that could be exploited.
What about vulnerable customers and AI?
Elaine Lee joined us to speak about vulnerable customers and the need to ensure that we are considering them in our approach to technology and process solutions.
“40% of Companies are not doing well enough when identifying and supporting vulnerable customers.”
The FCA considers 52% of UK population to be vulnerable. The impact of the cost of living crisis on the UK population is that 25% of adults now have low financial resilience and the drivers of vulnerability are varied, including:
- Health
- Capability
- Life Events
- Resilience
- Equality
- Access
Remember, vulnerability isn’t static. We may be displaying vulnerability and require additional support today, but not in a few weeks’ time.
With 40% of companies already not doing well enough when identifying and supporting vulnerable customers, how will the introduction of AI affect those customers? Of course, there is a spectrum of risk. So it’s important to understand who and where your customers are on that spectrum at any given time, and the potential for harm – understanding what they are vulnerable to?
People may also be vulnerable through lack of access or confidence with digital tools, they may be under pressure financially through the continuing cost-of-living crisis or low financial resilience, they may be experiencing a physical or mental health condition or going through a life event that changes their ability to make decisions in the usual way.
When implementing changes, ensure that you have properly tested your solutions to work effectively for vulnerability. Use diverse customer panels and map the possibilities for different customer types. The effort needed to get it right does have a financial impact on your business, but if you succeed it will reduce customer complaints, increase engagement and therefore increase customer value.
Use cases and how to implement AI safely in Contact Centres
CXReview’s Keith Shanks rounded up the presentations with a reminder of the history of automation and AI use in contact centres. He highlighted the predictive dialler as being a key example of great technology that when implemented either badly or with mal-intent, has negatively impacted consumer perception and experience.
“Automation in Contact Centres: It isn’t new. It’s been around for years with mixed results through implementation.”
Due the nature of the customer contact operations, there are plenty of use cases that can be considered for development and implementation.
- Ensuring consistency and pace
- Automation of decision making
- Increased accuracy
- Assisting agents in dealing with complex customer contacts
- Enabling access to the right information at the right time.
However, we need to be cognisant of the potential challenges and ensure that these are properly addressed.
- Data privacy
- Security
- Vulnerabilities of both organisations and individuals
- How we ask our people to engage with the use of technology
With great opportunity comes great responsibility
If you would like to discuss more around how you are implementing AI and automation within your organisation and what it may mean to your people, customers or processes, then please contact the team.
Additionally, we are able to provide access to content from the day if you would like to read further.
Our very own Neville Doughty recently caught up with Sean McIver for MaxContact‘s latest episode of Talk Time, discussing how successful outsourcing is built on a foundation of trust, respect, and a shared commitment to sustainability and fairness.
Take a look at the snippet from Nev for a sneak preview.
To listen to the full episode, click on this link.
The full range of Talk Time episodes can be found on Spotify and Apple Podcasts.
AI has begun to come of age – the last couple of years in particular have seen an explosion in AI opportunities.
In our new whitepaper, we explore the use cases and human considerations of implementing AI in contact centres.
The content was drawn from our round table discussion with a number of contact centre leaders from multiple sector across travel and leisure to utilities, subscriptions, lifestyle and wellbeing. We decided to sort the hype from the reality, chat about the risks and share reflections and learnings.
It was clear that the human component of customer interaction still has a key role to play, especially when dealing with customers who can’t or won’t engage digitally, are vulnerable or at a vulnerable time in the customer journey.
We hope that capturing our conversation gives a wider audience plenty of food for thought as we all get to grips with the opportunities AI brings.
9 steps to AI success
In the paper, you will find our 9 steps to AI success and our key takeaways from the day, where we covered:
- the importance of the ‘why’ of technology
- the diminishing role of voice and what happens when we make voice channels more available
- data responsibility
- how AI can support frontline staff and employee experience, and
- how AI can support the customer experience.
Are you ready for AI?
The whitepaper is free to download and immediately accessible below. We hope you find it useful and would love to hear your experiences too. Follow us on LinkedIn to share your thoughts.
Harry joins the CCP Team as Partnership Executive. As part of the role, Harry will be support our clients and partners (new and old), ensuring that they are getting the best out of working with Contact Centre Panel.
You can read more about Harry, and the rest of the CCP Team, by clicking here.
Article 3 of 3
Our third and final area to highlight is the talent shortage in operations and more focused in areas such as data analytics, AI, and digital innovation. Attracting and retaining skilled professionals is essential for insurers to adapt to changing market dynamics and leverage emerging technologies effectively. But how are they going about doing this, particularly when their operational hubs are positioned outside the talent hub of London?
1. Talent Development and Training
Insurance companies are investing in talent development programmes to upskill their existing workforce. They offer training in emerging areas such as data analytics, AI, and digital technologies to ‘bridge’ colleagues in volume areas with deep experience of the customer, products and processes, into specialist roles where they can build upon that foundation. Additionally, insurers are partnering with educational institutions to create specialised insurance programmes that provide graduates with the necessary skills and knowledge to succeed in the industry.
By investing in talent development, insurers are closing the ‘skills gap’ to cultivate a pipeline of skilled professionals. This takes time to bear fruit and so with that comes an interim need to maintain the shortfall, or at least provide the foundation to build upon. The outsourcing industry is well placed to help here, both short and long term.
2. Outsourcing
In recent years, changing dynamics within the industry has seen employees talking with their feet and finding pastures new. There’s simply more choice for people and if the reward is better elsewhere and the work less complicated (and stressful) then the lure of jumping ship for better pay and conditions is strong, particularly when the commute is no longer a factor for many organisations. Whilst there are advancements in the technology space to soften the blow of the resourcing turbulence, the pace at which these are delivering tangible benefits is nowhere near sufficient to keeping up with the shortfall in resourcing.
We’ve seen the use of UK outsourcers as the stop gap, at least tactically for the initial shortfall, but the winners we are seeing are the overseas territories, South Africa especially for the customer facing roles. We believe those insurers that brave the outsourcing decision for their operations, hand in hand with technology outsourcing, will create strategic advantage versus their peers. We are currently seeing this with US based Insurers increasing offshoring to South Africa but not so much in UK Insurance, just yet…..
Want to hear more on this topic? Feel free to contact us hello@contactcentrepanel.com for further insight and guidance.
Want to read our previous articles? Part 1 and 2 have been linked below:
- Part 1 – Collaboration through partnerships
- Part 2 – AI, Data Analytics and Insights
Article 2 of 3
Insurers have long since leveraged data and analytics to gain actionable insights and drive operational improvements. After all, data is at the heart of underwriting, pricing and claims management. Advanced analytical techniques are being increasingly used to analyse large volumes of data, identify patterns, and optimise processes. Insurers are employing predictive analytics and AI for claims forecasting, fraud detection, and risk assessment, allowing them to make data-driven decisions and streamline operations. These run hand in hand with the operation itself and it’s critical the teams work closely together, especially when outsourcing is involved. Insurers are gaining strategic advantage in several ways. Here are some examples:
1. Enhanced Risk Assessment
By leveraging vast amounts of structured and unstructured data, insurers can refine their risk assessment processes. Advanced analytics and AI models analyse historical data, market trends, customer behaviours and external factors to improve risk prediction and pricing accuracy. This enables them to identify profitable segments, develop targeted products, and optimise underwriting decisions.
Insurers rarely let go of this core competence and fully outsource, so if the demand surfaces, it’s likely to be augmenting rather than replacing the mother ship’s in-house capability.
2. Fraud Detection and Prevention
Insurers are employing data analytics and AI algorithms to detect and prevent fraudulent activities. By analysing data patterns and anomalies, insurers can identify suspicious claims, behaviours or patterns that indicate potential fraud. Advanced fraud detection models help insurers mitigate financial losses, improve operational efficiency, and protect honest policyholders from inflated premiums.
Typically, outsourcers work across industry verticals and so bring a distinct advantage in terms of sharing learnings from one business sector to another.
3. Personalised Customer Experiences
By analysing customer data, insurers are gaining insights into individual preferences, behaviours and risk profiles, allowing them to tailor products, pricing, and services to specific customer segments. This level of personalisation enhances customer satisfaction, improves retention rates (increasingly important after the pricing reforms) and drives customer loyalty.
In an industry challenged with differentiation beyond brand recognition and price, personalisation is ever more important to the policy holder.
4. Process Optimisation
Of course, the need to identify and eliminate inefficiencies, reduce waste, and enhance operational performance doesn’t go away just because you enhance your technical capabilities elsewhere. Techniques such as Lean Six Sigma continue to be used to analyse processes, identify bottlenecks, and implement improvements. Reengineering processes to simplify and automate workflows, reducing cycle times and enhancing overall operational effectiveness will continue.
Through the use of process mining (we rate this software highly) and analysis, insurers can identify bottlenecks, eliminate inefficiencies, and create a pipeline of opportunities, driven by date, primed for automation.
If you would like to discuss further the challenges in the Insurance sector, the benefits of data analytics, AI and insights or generally about any of the points raised, feel free to contact us hello@contactcentrepanel.com
Watch out for the next article in the series considering the impact of Talent Management and Skills Gaps.