INSURANCE is a necessary financial safety net, but signing up for one can be frustrating.
New customer Lily lamented that she has to submit over a dozen documents for registration, such as proof of prior insurance, a signed proposal form, payment information, and the list went on.
“It’s really a hassle as everything is done in person, ” Lily vented.
“I had to take time off work to meet my agent and visit his branch to provide the documents and fill in forms for various verifications. How do I do this during lockdowns? Where’s the social distancing?
“Apparently, it then takes days or even weeks for my application to be approved!”
Lily’s insurance agent Khairul is all too familiar with her frustration.
“The existing system has many inefficiencies. Everything is done face-to-face as we need to collect documents and manually conduct due diligence to verify the identity of the customer before the application can be processed further.
“Because it takes so long, my customers often cancel their application to go for another insurer, hoping for faster approval and a less stressful process.
“The ongoing movement restriction has made it even more difficult, as I haven’t been able to meet my customers to get their documents and photos, which means I can’t enrol them for new policies. My revenue has dropped significantly, ” Khairul said.
Insurance companies predominantly service customers through agents and branches to ensure compliance with regulatory policies.
Recent lockdowns and safe-distancing measures however have built momentum for the need to serve customers with more digitally-focused alternatives for contactless service, without compromising security efficacies.
Recognising this gap in the insurance industry, fintech specialist KiplePay is working with insurance companies to enhance existing online application systems that will streamline customer-facing processes by removing cumbersome and labour-intensive security steps.
“Insurance companies need a cost efficient, paperless system and a faster, less painful process that will retain a customer during onboarding, to minimise drop-offs, ” said KiplePay CEO Kay Tan.
“They need an e-KYC (Electronic Know Your Customer) solution that can digitally and remotely manage the mandatory process of identifying, verifying and authenticating a customer and the application, ” he said.
Using KiplePay’s new solution Kiple e-KYC, Lily can now apply for her policy online with Khairul’s guidance.
Armed with just her smartphone, she uploads images of all the necessary documents including her MyKad. The optical character recognition technology then extracts the image of her MyKad along with her name, number and address, among others.
“Another great aspect is that Kiple e-KYC doesn’t require heavy hardware investment to enable the necessary security checks and as such, transitioning to our system can be done seamlessly, ” Tan added.
Once a tedious exercise, Lily can now apply for insurance on her own, in five easy steps:
1. Sign up by creating a customer account: Lily sets up her account on Khairul’s company system and selects the type of insurance she prefers.
2. Perform document upload and virtual verification: Using her phone camera, Lily takes pictures of both sides of her MyKad. This automatically enables the Kiple e-KYC engine to analyse security elements using artificial intelligence (AI) capabilities, which include scanning several distinguishing landmarks, holograms and features to authenticate her document.
3. Virtual biometric check: Lily also takes a video of her face and performs simple actions as prompted. The system will create a 3D facial image of the individual and match it against the MyKad picture, to verify that it is the same person.
4. Risk rating cross-checks: KiplePay’s solution then cross-checks the applicant against the insurer’s database of blacklisted customers. Once a risk rating is established, the application will be approved or declined.
5. Digital signing of agreement: If approved, Khairul will help Lily determine her policy and she can digitally sign the agreement to complete the process with a two-factor authentication check via a one-time-password (OTP), which is sent to her mobile phone.
Lily, who turns to online platforms for all her needs from groceries, e-hailing to banking, finds the entire process fast and efficient. “The verification process was very easy as I am used to doing it for e-wallet registrations, ” she said.
Kiple e-KYC is an end-to-end identity verification solution that integrates AI and smart biometrics, which not only alleviate processing pain points but are necessary tools in fighting fraud.
“AI-enabled biometrics improve every aspect of the identity verification process, enhanced with the ability to conduct remote mobile onboarding 24/7, promising speed, accuracy and scalability, ” said Tan.
This ensures that the applicant is genuine and creditworthy of a new policy.
Tan explained that the Kiple e-KYC system creates a trust anchor – an additional security feature embedded for machine-to-machine communication – which conducts image matching, and lastly, authenticates and assesses the customer’s liveness along multiple facial markers to prevent identity theft.
The AI compares the live subject in the short-recorded video uploaded by the applicant against static samples (such as images), taking into account elements like lighting conditions, contrast resolution and other distinct aspects of the subject.
“Everything can be done remotely and only takes minutes, ” Tan said.
Kiple e-KYC can also spot changes in facial features due to weight gain or loss, ageing, hair loss as well as minor plastic surgery.
“As a Malaysian company, our system is well-adapted to detect Asian features, ” added Tan.
Khairul, an agent of 20 years, is witnessing first-hand, transformations within the industry.
“In the past, after documents are uploaded or sent to the branch, employees would manually check and cross reference each document to ascertain the identity and credit status of the applicant.
“This could take days, even weeks, and the lockdowns have caused longer delays as there are fewer people working on cases, ” he said.
The traditional method of identity verification is time-consuming, inefficient and expensive.
“It is also highly impractical as it leaves much room for human error, ” Tan said, explaining that it was not a scalable practice.
“More customers, means more manpower, adding to the company’s operations cost, which should be more effectively channelled towards further digital enhancements of the business.”
Khairul is fast realising the benefits of Kiple e-KYC.
“It has changed the way I deal with customers. The verification system is fast, and I am not spending so much time on just one case.
“The ease of the system has allowed me to sign up more customers from all over Malaysia, which means increased business, ” – a bonus in the current economic crunch, he shared.
Customer needs are always evolving, and today, they want new and faster ways to interact with their financial service providers.
The current Covid-19 pandemic has highlighted the value of digital transformation and it is a wake-up call for organisations and industries that are overly reliant on traditional operations and personal interactions, to quickly embrace digital transformation and be ready to face a definite shift in consumer behaviour in the new normal.
“Technology like e-KYC has immense benefits, and research has shown that it can improve business operation efficiency by 30%-65% while improving workforce efficiency, security and productivity, ” Tan said.
“The adoption of e-KYC definitely helps lower costs and increase competition, paving the way for greater innovation in this sector in line with Bank Negara Malaysia’s push for greater adoption of digital financial services, ” Tan concluded.
In June this year, Bank Negara published its policy document on e-KYC technology outlining the requirements and guidance in implementing e-KYC in the financial sector for the identification and verification of individuals, which the central bank recognises as a crucial piece of the puzzle to Malaysia’s digital financial revolution.
To learn more about how KiplePay is digitising industries, go to digitalwarriors.greenpacket.com
Green Packet is an internationally recognized telecommunications, media and technology Company. Founded in the heart of California’s Silicon Valley in 2000 and subsequently listed on the Malaysian Stock Exchange in 2005, Green Packet designs and produces wireless devices, user-centered applications and services that enable the delivery of valuable digital experiences.