Digital by design
Almost two million people and businesses across the UK and Ireland have a relationship with Close Brothers Premium Finance. The core aim of the company is to help individuals and businesses spread the cost of their insurance by providing a finance solution that enables the customer to pay over a number of monthly instalments. More than half of all people who buy motor insurance, for example, expect to set up a direct debit to pay the cost over ten or twelve months. In some cases the insurer themselves is able to offer monthly repayment terms but more often than not it falls to the broker to either collect the premium in full from the customer or provide some form of financed repayment facility. Most brokers don’t have the resources to offer that those facilities themselves so they look to companies like Close Brothers to provide it for their customers. Close Brothers Premium Finance has been providing this service for 35 years and is today a trusted partner to more than 2,000 insurance brokers. As you'd expect, most of its business is now conducted electronically with a fair degree of automation, to the extent that it could be described as a digital business. “But it has become a digital business by evolution rather than by design,” says CIO Chris Loake. Much upgrading had already taken place before Loake joined the company in 2014 from Experian where he had worked for 11 years, for example the process of consolidating the group's data centres into a central location was well under way.
However the digital channels were not sufficiently scalable or stable to meet the needs of the business going forward. When Loake arrived this was already understood by the business leadership, and a technology update was being discussed; a process he quickly pointed out would be expensive and ultimately ineffective unless it was carried out as part of a root and branch business transformation. “We needed to re-architect the business into a truly digital entity. We stand or fall by our relationship with the brokers – and ultimately their clients – and that relationship is delivered through our servers and our technology.”
Who is our customer?
The first task was to map the current technology estate. Like the curate's egg, some of its parts were excellent but had not been utilised properly. Other parts had fundamental problems. However this mapping had to be done in conjunction with understanding what it was supposed to do. “We are an intermediated business,” Loake explains. “99 percent of our business is sold through insurance brokers. But we had an identity crisis: who are we?” In the insurance sales process the end customer generally has only a limited understanding as to who Close Brothers Premium Finance is. Even though Close Brothers Premium Finance works closely with brokers to make sure the customer is provided with all the information needed to make them aware that they are entering an agreement with a third party lender it’s the very nature of the insurance purchase model that the customer often just sees their broker as the provider of the end to end service. Whilst they will receive Close Brothers branded documentation, if they have queries, want to change their bank account or requested payment date, or settle miss payments, they will have to deal someone they don't immediately recognise, having perhaps bought a supermarket branded insurance policy, managed by a broker, from a price comparison website in the first instance.
Insurance is not the core business of a retailer, so it uses a broker to configure its product and in turn the broker uses an insurer or insurers to provide the risk transfer facility and a provider such as Close Brothers Premium Finance as its finance provider to pay the insurer’s premium and arrange monthly collection from the customer “All the customer wants is insurance and to be able to pay for it monthly. In some parts of our market segmentation we are asked to be as invisible as possible so that the insurance distribution brand can provide a seamless experience!” This is an approach is known as 'white labelling' and is very common in the personal lines insurance market. At the other end of the scale, Close Brothers Premium Finance provides finance for much larger commercial insurance premiums for large companies. One construction company customer, for example, has over £23 million worth of annual insurance policy premiums to cover its insurable risks. “In that case it’s unlikely that we can be or would be expected to be invisible in the background or white labelled” he says. “We want to be sure we understand the customer’s business and that they understand what we are doing for them. In that market segment it is a completely different offering. We need our business and our technology to be structured to support these different market segments.”
Having mapped the customer journey in each of the different segments, it was possible to plan the digital journey to deliver the ideal experience to them. “There are two options”, Loake says, “You could decide to build a new business alongside the old one, with new systems and ways of operating, and flip over to that when it is ready. However I think that is an approach that is set up for failure. It's not much use saying that we will give you a splendid service in three years' time – they want to know how we can help them now!”
Close Brothers Premium Finance
Partners in progress
An incremental approach gets over that problem, and is much more adaptable to changing markets. So it was decided to start with the all-important contact centre which was using traditional channels to communicate with customers such as telephones and e-mail. To support the evolving customer experience management requirements of our business partners and support a wider set of channels – so that a customer could be provided with a more joined up experience across all of the brands they form relationships with through the insurance buying cycle something more sophisticated was needed.
The decision on a new platform brought in the people expected to actually use it. Employees were taken off the phones for a few days to experience the different packages that were being considered and visiting other companies' contact centres. The system that was eventually chosen was the one they liked best. A Cisco communications management solution is being implemented by contact centre specialist and Cisco Gold Partner Natilik that is introducing all the tools needed, including webchat, for a seamless customer interface. The Close Brothers Premium Finance customer services team was named as one of the top ten teams in the UK at last year's National Contact Centre Awards, with further honours at the London & South East Contact Centre Forum Awards and the team are expecting further success in this years’ awards. The contact centre is already well on the way to being recognised as ‘world class’ and the delivery of the new technology solution later this year is expected to take them onto the next level. The other side of this coin is the online customer interface, or ‘gateway’ which provides customers with the capability to self-serve at key stages of the journey with Close Brothers, such as credit agreement signature and simple account changes. “This was really not working as we wanted it to before we did the end to end customer mapping I spoke about. Now, instead of having an unexpected e-mail from a company that they don't recognise and may go into their spam filter, they will have an e-mail identified as coming from their insurance provider, reintroducing us as the provider of the financed instalment facility A link will take them to our secure customer interface, and through that they will be able to sign their documentation and complete the insurance finance application process.” The online completion service is expected to save up to 80 percent on the cost associated with sending documentation by post and administrating it on it’s return, while speeding up the process of completion of finance arrangement which benefits both the customer and the insurance provider and is already being widely acclaimed in trials by the brokers. As Sue Kitson, Best Business Practice Manager at the leading insurance broker Griffiths & Armour has commented: “We have been trialling the new online document signature service with great results. Submitting documentation online and having the customer review, sign and submit direct to Close Brothers Premium Finance has saved us time and money, and the industry needs more such services. The system is quick and easy to use and it’s freed up our staff to spend more time with our customers.”
Two companies were brought in to deliver the enhanced customer gateway, the content management specialist Liferay, and DocuSign for electronic signature technology that facilitates electronic exchange of contracts and signed documents. “At present”, Loake says, “the percentage of customers who sign online is probably in single digits. Though there will always be customers who prefer pen and ink, the target is to drive that up to around 90 percent.”
As well as delivering better customer experiences and increasing satisfaction scores, which have always been high (Close Brothers Premium Finance was a finalist at this year's Customer Satisfaction Awards organised by the Institute of Customer Service), the digital transformation will deliver significant cost savings. Making the organisation leaner through technology will improve productivity, and make it possible for the company to extend its service into areas in which it couldn't previously operate. This will enable Close Brothers Premium Finance to cover more of the different types of insurance offered by the brokers and potentially look into associated markets where we can provide financing solutions. It will also allow the company to make better use of synergies within the Close Brothers Group. “We are part of a Bank with a full suite of offerings not all of which we currently offer to our brokers. One large broker recently told me that if we could take on his invoicing, debt management, and single payment processes he could realise real productivity benefits in terms of administration and concentrate his staff’s efforts on the core business of identifying and providing insurance solutions. We are fulfilling perhaps 60 percent of the brokers' needs at the moment and need to ask how we can improve on that, but currently we have to scale value with headcount. That is not sustainable but technology can make it happen.”
It's fortunate that Loake (a keen cyclist who was once a member of the UK National Rowing Team) has plenty of energy because his 2016 workload would tax anyone. The contact centre will be fully deployed around October, he says, and at the same time the enhanced customer gateway will be substantially ready, with an early release in the summer. But his big thing, as the foundation to his Digital Transformation strategy is the current deployment of an IBM Integration Suite, to explain which he resorts an analogy. “We have a rather inflexible architecture at the moment with multiple point to point connections between individual software components. Unravelling that, peeling back the layers of the onion to get to the heart of it, is a challenge! The Integration Suite delivered by Prolifics who are an IBM Premier Partner and specialists in IBM software implementations, will allow us to integrate the new contact centre without attaching it directly to the old system. The same with the new customer gateway. Instead of talking to one another direct they will communicate through the Integration Suite. It makes the components work like Velcro – when attached they are tightly integrated but when you want to remove one it comes off cleanly and you can stick a new one on!”
The digital transformation is a huge project for a company the size of Close Brothers Premium Finance, and represents a major investment by Close Brothers Group, its merchant banking parent company. Working with trusted and expert partners is, as we have seen, an effective way to manage that change but with multiple projects running simultaneously and with multiple vendors, sometimes more holistic programme support is needed, which is why Atos was selected as the delivery partner, and Cognizant as the test partner, for the overall programme. In terms of the selection of Atos, Loake comments that “the company that is trusted to deliver IT for the Olympics every four years can be confidently be relied on to get it right first time. “There's no way we could hire the number of senior people we'd need to scale up and deliver this programme ourselves. Anyway, what would we do with them afterwards? We don't need that many permanent people. We have an established business change team looking at the implications the project will have for our employees and our partners. A whole level of thought leadership is being provided by those business change teams and the technology guys in-house who are working with the Atos teams to navigate through this journey.”
For a service organisation like Close Brothers Premium Finance how it is perceived in the market is vital. Currently it has a net promoter score (NPS) of +35 for customers and +45 for brokers. “These are phenomenal numbers,” concludes Loake, “but we aspire to get them both over +50. We want to enable future sustainable growth and drive our NPS above +50: those are our two objective headlines for the programme.”