Army vs. Navy…Greece vs. Troy…Risk vs. Customer Experience…It’s a rivalry as old as time. Why can’t these teams just get along?
Well, for starters, their goals are perfectly misaligned.
Imagine that you’re a Customer Experience executive who’s been tasked to deliver best-in-class digital experiences. Your first move is likely looking for any friction in the application process and removing it. Applications with low friction have higher conversion rates. Higher conversion rates mean higher revenue. Problem solved and your promotion awaits, right?
Not so fast…
As you remove friction from the application process, you’re inadvertently increasing the risk profile of your…
Politics is the topic that we love to hate. It’s everybody’s dirty little secret that we enjoy a good scandal. Don’t fret though, this isn’t about politics, it’s about Machine Learning — though I suppose it is also a bit about politics.
Regardless of what side of the political fence you sit (or some of us who work hard to be Swiss and walk the middle line), each political party has its iconic figurehead that has a subjective list of good things and bad things. …
We recently published an article taking apart the rapid ascension of Lemonade, its controversial business model, and the overall impact it could have on the insurance market.
The way Zappos claims to be a “customer service company that happens to sell shoes,” Lemonade is claiming to be a “technology company that happens to sell insurance.” By integrating AI and behavioral intelligence into every inch of the company, from customer acquisition to underwriting to claims, Lemonade has been able to achieve over a $2B valuation in three short years.
And while it currently looks like a world-eater, we also discussed what…
Why Insurance Carriers Should (and shouldn’t) Be Worried About Lemonade
Stale industries with entrenched players who fail to innovate will continually be disrupted by forward-thinking industry entrants.
We’ve seen it with cable, retail, transportation, you name it.
Monopolies make great investments until the competitive moat is breached. Failing to pay attention to the customer and instead focusing solely on the bottom line is why companies like Amazon, Netflix, and Uber have risen to fame.
But while these Goliath’s continue to dominate their respective industries and dismiss incoming threats, the David’s of the world quietly load up their slingshots.
Assessing risk is the most important decision financial service companies make every single day.
And when making important decisions, you need as much information as possible.
And information today means data.
The amount of data we create, collect, and analyze today is enough to give Freddie Kruger nightmares.
With that much data created and consumed every day, we’ve turned to Artificial Intelligence to try to make sense of it all.
And while there are innumerable use cases data helps contribute to, biometrics and Behavioral Intelligence (BI) have emerged as the lead horses in the risk and fraud race.
If you were walking through airport security and noticed the TSA agents had blindfolds on, how would you feel?
Personally, I’d be petrified, as I’m sure you would be.
Now imagine a teacher walking out of a classroom immediately after passing out an exam.
Or a drug agency giving you a ‘do-it-yourself’ take-home drug test.
Or a poker player turning their back on their opponents while the cards are dealt.
Or an interrogator…okay, okay, I’m sure you get the point.
Intentionally ignoring someone’s behavioral cues, especially in a security setting, is ignorant and borderline reckless behavior.
Human body language and…
In order to understand digital behavioral intelligence, one needs to first understand behavioral intelligence.
And in order to understand behavioral intelligence, one needs to first understand emotional intelligence.
Emotional Intelligence (EQ) has been around for decades and refers to an individual’s understanding of their emotions and how those emotions influence their actions.
Having a high EQ allows an individual to also have a solid understanding and empathetic recognition and awareness of emotions.
Emotional intelligence is internal — it happens inside people’s brains.
On the other hand, Behavioral Intelligence (BQ) is external and involves what people can see and respond to.
Face-to-Face is now “Faceless”…
Not too long ago, most financial service transactions were done face-to-face.
Whether you were applying for a new credit card, a mortgage, or a life insurance policy, you would likely sit down with an agent to fill out your application.
That agent, like any good salesperson, was trained to read your behavioral cues.
If you were confused or frustrated, they would offer a helping hand.
If you were excited and engaged, they may try to cross-sell you an additional product.
If you were nervous, fidgety, or doing something odd like changing your answers or looking at…
People say that what’s old eventually becomes new again. If you pay close attention to modern UX design practices and also remember your high school biology, you’ll find a great example.
But it’s not beards I’m talking about, even though Darwin would get much respect from some members of the design community.
It’s evolution and A/B testing.
Darwin is famous for his “Origin of Species” where he raised the idea of “survival of the fittest”.
It’s the basic idea behind today’s A/B testing methodology:
Over the past decade, we witnessed a titanic shift in the way insurance businesses operate (thank you, Internet).
The companies that embraced the “Digital Shift” have thrived, while the companies and business models that ignored it or were slow to adopt an Internet/mobile strategy have wilted.
Hopefully, as the surviving insurers view the carcasses of their fallen competitors on the side of the road, they understand that a new threat has emerged.
And it has a name — Artificial Intelligence.
While you shouldn’t expect to see an iron-clad Schwarzenegger approaching in your rearview, the impact of A.I. …