How banks can better leverage transactional data to create tailored, embedded insurance

Banks sit at the center of all our financial transactions so they have a natural advantage when it comes to offering their customers insurance products. Daniel Poole, our VP Strategic Partnerships EMEA talks about the widening gap between digital and legacy banks and opportunities for banks to utilize transactional data into building an ecosystem of ancillary services in a recent interview with 

The nature of the world that we live in means that consumers expect our digital experience to be tailored and customized to our needs. A recent survey found that almost half (45%) of US bank customers are highly interested in receiving at least one insurance offer from their bank, and this is driven by convenience and ease. Poole highlights that transactional data can be utilized for seamless purchases of protection products.  

Poole uses having a baby as a hypothetical example – “You’re buying a pregnancy test, and then you’re looking at nursery equipment and furniture,” indicating that there is a new family member inbound. Banks are crucially positioned to access customer data earliest and have the capacity to present these customized offers to the customer when they need them. 

Banks have struggled with the commoditization of traditional financial services for years. Conventionally, people would visit a bank once a week but many have turned to online and mobile banking. Poole highlights that it’s an opportunity to build an ecosystem of products surrounding their customers and re-introducing touch-points to build customer value. Challenger banks are chasing customer acquisition and finding pathways for profitability. However smaller banks often means smaller teams and therefore building an insurance product is time consuming and presents many operational and product challenges. On the flip side, acquiring via strategic partners offers a fast, flexible and low resource entry into accessing multiple product lines anywhere in the world. 

“Right product, right time” is crucial in the customer purchasing journey and presenting the customer with a ‘one-size-fits-all’ product ends up being a ‘one-size-fits none.’ All banks have the data to be able to execute but it’s about the digital smaller banks to leverage using this data in their backend and for legacy banks to strategically use all of their transactional data points. There is an opportunity for both traditional and neobanks to better leverage their datasets to create customized, embedded insurance offerings

Key Video Highlights:

  • 00:48 A vast majority of consumers who use digital banks are very interested in receiving insurance and warranty offers based on their transactional data. What does this mean for your region?

    2:30 What’s the fastest, safest go-to market strategy for small regional and/or community banks? 

    4:18 The gap between digital banks and legacy banks in embedded insurance is widening. To what extent is legacy banks’ inability to work with transaction data to blame? 

    6:40 Experiencing “insurable life events” is a major motivator in buying decisions. Discuss how transaction data signals life-event-related embedded opportunities?