Unlocking the potential of automation with digital customer data collection
For industries that are highly regulated, complex, and intensely customer-focused - like insurance and banking - data collection comprises a massive part of many of the core processes such as creating an account, onboarding, policy updates or claims.
Most of these processes have traditionally been performed manually, and usually require multiple interactions between the customer and the customer service department.
Manual data collection has served an important purpose in these industries, providing a personal, human touch. However, it’s always been time-consuming, inefficient, and just plain tedious. Not only that, as we accelerate into the digital age, with its increasing complexities, customer expectations, and soaring amounts of data, manual data collection is becoming increasingly problematic.
In fact, here’s just one number that bears this out: The average form abandonment rate in the insurance industry is ~80%!
That means that of 100 potential customers, only 20 complete the initial registration phase. That works out to a lot of lost customers (and revenue).
Why manual data collection needs to be phased out
It’s true that manual data entry doesn’t require advanced technology to manage data collection, but you end up paying in lots of other ways.
Some of the disadvantages to manual data collection are pretty obvious:
- Data inaccuracies
When customers are filling in forms that require manual re-entry of data by the employees there’s a significant margin for error. Information is often misread, mistyped, or simply overlooked. In fact, the average error rate in manual data entry is about 1%.
These types of mistakes usually occur as a result of several factors. Sometimes it’s fatigue brought on by large workloads and re-entering the same type of data over and over. Other times, it’s difficult to read someone’s handwriting.
Whatever the reason, these mistakes can create discrepancies that may end up costing your business millions of dollars.
- Inefficient use of resources
Manual data entry is extremely time-consuming, and your company pays the price for that in employee salaries. Not only that, you’re using valuable resources for tedious, manual, repetitive work, which often results in low staff morale. That leads to high employee turnover, which costs your business even more money.
- Long processes and friction
Manual data often requires multiple interactions to fix errors, get missing or invalid information, and ascertain the accuracy of the data. As a result, these processes can take anywhere from weeks to months, making it harder for companies to scale and grow, with slower time-to-revenue and lower lifetime value for customers.
Here are a few, less obvious disadvantages to manual data collection in industries like insurance and banking:
- Dissatisfied customers
PDFs, long, confusing processes, errors, multiple interactions - these are some of the things that modern consumers refuse to accept. They want easy, quick, seamless online experiences, and if they don’t get it - they simply walk away.
- Inconsistent terms and definitions
When huge amounts of data are collected manually from multiple sources, key terms are often captured inconsistently, undermining the quality of your data and leading to additional confusion and errors.
Here’s the bottom line: If your business is still using manual data collection, you’re paying the cost many times over.
The data influx and the challenges it brings
The volume of customer data that needs to be collected is increasing exponentially. In industries like insurance and banking, where automation of workflows and core processes has become crucial, this presents several challenges. In fact, we’d go so far as to say that the influx of customer data has made digitization a prerequisite for automating customer service.
Digital data collection is the start of the workflow automation process, allowing automatic filtering and segmenting based on different criteria and factors, such as cohorts, products and services, and more.
This also helps increase customer satisfaction, ensuring that customers are routed to the right customer service agents and departments.
A change in perspective
The pandemic has made it abundantly clear that a seamless digital customer experience is now a must - modern customers are evolving fast and won’t accept anything less than a smooth, easy online process.
But it’s not just about the pandemic. By the year 2025, Millenials will make up around 75% of the global workforce. Millennials place such a high value on the use of digital tools and their ability to get instant answers and offer comparisons, wherever they are. And now that the first Gen Z cohort is hitting adulthood, these demands are only going to grow - a study conducted by EY showed that two out of three customers prefer digital interactions and about 80% of respondents claimed they purchased insurance online.
While most consumers understand that not all processes, such as insurance claims or banking requests, can be processed instantly, digitization and automation of the processes can improve efficiency, reduce reliance on manual processes and human error and result in better customer service.
This is where things become tricky, especially for industries like insurance and banking, where the human touch is so important. So how do you meet your customers’ need for personalized service while also providing a simple digital experience?
Automation, with the human touch
According to the latest numbers, by 2030, 46% of insurance claims and policy processing jobs will be automated.
However, one of the major challenges that automation brings is finding the right balance between automation and tailored human service.
That’s why finding the right automation solution is so important - because it’s not just about automating and digitizing. The right solution combines automation with personalization, knowing when to connect the customer to an actual human as seamlessly as possible, right when they need it.
Lowering costs, increasing scale
Research shows that automation can reduce the costs of insurance claims by up to 30%. This is a clear indication of how smart digitalization contributes to increased ROI while also opening up new opportunities for long-term growth, such as innovative insurance products and protection services.
Automating data intake not only helps you lower costs, it makes it easy to quickly adjust and implement process changes. This level of agility allows you to quickly respond to market changes and new customer demands, increasing customer lifetime value and giving you the ability to scale.
For example, digital data collection not only captures relevant consumer information and centralizes data storage, it can also allow you to automatically screen applicants for potential upsell or cross sell opportunities.
First things first - digital data collection
Before you can even start tackling the automation-human balance challenge, you need to focus on ensuring your data collection process is smooth and simple, bringing in reliable and up-to-date information.
The first step is digitizing your data collection, making sure all customer data is collected digitally, directly from the customer, in an easy-to-read format that can be processed automatically.
This will allow you to collect data from your customers quickly and without involvement of your staff, freeing them up for other types of tasks that could improve your business growth while increasing morale.
Digitizing data collection will help you:
- Reduce errors and improve data accuracy and completeness
- Improve management and tracking of customer data
- Free up company resources to better focus on business growth and scale
- Cut down turnaround times and improve customer satisfaction
Living in a time of constant changes requires us to be open to embracing technology. In industries like insurance and banking, a significant chunk of that technology revolves around automation and smart solutions.
Automation will not, as it was once feared, take away jobs from humans - it will take care of the repetitive, mundane tasks, freeing up employees to evolve and innovate, developing new skills over time.
Companies like Guardian Life are already seeing how the use of automation and AI is driving the next stage of their success. Automation of manual and repetitive jobs such as manual data collection can help businesses grow and thrive by enabling them to redefine their goals and accomplish them in the best possible way.
Last but not least, streamlining and improving the data collection experience for both your customers and employees will give you full visibility into your customers’ journey. Improving the way you do business through digitization and automation will enable you to provide a better customer experience. Considering two-thirds of companies compete on customer experience alone, this makes improvement in this area crucial!
And the resulting benefits? Improved response time, higher customer satisfaction, increased revenue-per-employee, and more.