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customer experience behavioral analytics solutions

Solving the Risk vs. Customer Experience Challenge

Risk vs Customer Experience, a battle as old as time…

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 to look for any friction in the application process and remove it. Applications with low friction have higher conversion rates. Higher conversion rates mean higher revenue. Problem solved and your promotion awaits, right?

customer experience software

Not so fast…

As you remove friction from the application process, you’re inadvertently increasing the risk profile of your applicants. This inverse correlation makes risk and fraud teams’ jobs more difficult as they are responsible for lowering risk as much as possible.

Let’s explore this conundrum for a minute…

What’s at stake for customer experience teams?

Two words – false positives.

According to a recent TransUnion report, 63% of consumers would consider no longer doing business with a financial institution or retailer if they were declined during the application process, which makes it an imperative initiative to determine genuine customers from bad actors & fraudsters.

Let’s think about that for a minute. With only 1 in 5 blocked transactions being fraudulent, the cost of false positives far outweighs the cost of actual fraud (depending on what kind of insurance you’re selling).

Incorrectly turning down a genuine customer immediately lowers current revenue as well as future revenue loss from cross-selling and up-sell opportunities. It also devalues your brand and wastes acquisition spending.

As a business, it seems as though you only have two options:

1) Deliver an application process filled with cumbersome security barriers leading to high drop-off and frustration.

OR

2) Deliver a frictionless customer experience with high rates of genuine customers being turned down.

What’s at stake for Risk teams?

Money, and lots of it.

Take life insurance for example. One single question is responsible for over $3.4 BILLION in premium loss per year.

According to Verisk, 47% of applicants don’t disclose their smoking status when they apply for coverage. This makes accelerated underwriting much more difficult as carriers move away from fluid tests on every applicant. 

Having analyzed hundreds of millions of insurance applications, we’ve learned that roughly 11-13% of every application has some level of misrepresentation and, of those, roughly 30% are underwritten.

This level of non-disclosure and premium leakage is impacting the bottom line of 100% of insurance carriers. 

How to Deliver a Dynamic Experience Without Sacrificing Security

customer experience behavioral analytics solutions

“Everything in moderation, including moderation”. 

Delivering a great user experience during the application process doesn’t mean letting every user through the process. What it does require is operationalizing a dynamic security approach that acts in real-time.

And providing a dynamic, personalized experience tailored to each individual user (whether genuine or risky) requires that understand their intent. That’s where we come in.

Why Understanding “Intent” is Crucial for Dynamic Customer Experiences

It wasn’t that long ago that in order to purchase an insurance policy, you’d likely walk into a retail location and engage face-to-face with an agent.

In that environment, the agent would “tailor” the experience to you. For example, 

If you were unfamiliar with the product you were applying for, or maybe you were frustrated and confused by the questions in the application, there was a person to educate and assist you through the finish line.

If you were highly engaged and showing interest in other products, there was a person to provide more information and potentially upsell you an additional product.

If you were nervous or you didn’t know the answers to certain questions, there was a person there to further qualify your application.

In all previous banking transactions prior to the rise of the internet, there was an underlying concept – human interaction. In a face-to-face setting, there’s a trained employee reading your body language, taking into context the nature of the transaction, and handling it accordingly.

Each prospect or customer was unique. Each case required a different approach by the branch manager in order to convert a happy customer or further qualify a potential fraudster.

Are we applying the same level of personalization, qualification, and dynamic experience in the digital era?

The Digital Transformation Created “The Faceless Digital Customer”

Today, most interactions are now done digitally. With that, carriers are using “final answer data” which is simply what information a customer, or agent, submits. 

But wouldn’t you want to know how they’re behaving when filling out an application and what their true intent is? Are they confused? Frustrated? Ready to purchase or just window shopping? Checking a quote, then going back and editing important information and checking to see if the quote is lower? 

It wasn’t long ago that carriers were able to do this in person – but what if they could do it online?

This is the data gap that we identified and it’s why we started ForMotiv. Turns out, how a person fills out an application, either in person or digitally, is highly indicative of their intent.

Dynamic Customer Experience: Measure Behavior, Predict Intent

If you’re truly a data-driven organization, you need to leverage all of the pieces of the puzzle to create best-in-class dynamic experiences that cater to an individual’s intent.

At ForMotiv, we’ve developed a solution that does just that.

As users engage with an application, ForMotiv passively collects and analyzes the user’s digital body language, which consists of hundreds of unique behavioral signals to understand the intent of the applicant.

In an effort to model the face-to-face interaction, ForMotiv measures unique parameters like hesitation, typing speed, mouse movements, corrections, advanced keyboard shortcuts, and hundreds of other behaviors to determine not only the intent of the applicant but the best path forward for that user.

If a user shows behavioral signs of risk or fraud, like how they answer certain high-impact premium questions like tobacco or family history for life insurance, carriers can triage those applications in real-time. In addition, carriers can apply different real-time treatments to users based on the likelihood they are to purchase a policy. 

These are just a few of the many ways leading carriers are leveraging real-time intent scoring to drive personalized user experiences, increase sales, and lower their risk exposure with ForMotiv’s Solutions

With dynamic experiences, customer experience and risk teams can finally be friends again.

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