Accelerating Digitalisation in ASEAN Insurance Sector with eKYC

Subang Jaya, 10 October 2023 – The insurance landscape in the ASEAN region is undergoing a transformative shift, driven by the rapidly evolving digital landscape within businesses. These changes are reshaping the future of the insurance sector, with pervasive technologies having a profound impact on the consumer experience.

In the past, insurance products and services, such as purchasing, updating, or canceling policies, were primarily accessible through face-to-face interactions. However, the digital revolution has made these services easily accessible through self-serve models,  which reflects an observable shift in consumer behaviours.

“Consumers today demand convenience and seamless transactions that align with their busy and fast-paced lifestyles,” said Joe Seah, Chief Commercial Officer of Innov8tif Solutions Sdn. Bhd.

The COVID-19 pandemic has accelerated the shift in consumer behaviour as lockdowns and social distancing measures prompted customers to turn their way towards online platforms, not only for shopping but also for purchasing insurance policies. The convenience offered by shopping and securing insurance coverage online created an urgent purchase pattern, compelling sectors to reevaluate their physical business strategies and transition to online platforms.

The prolonged global pandemic had forced many companies to temporarily halt operations during minor outbreaks which in turn, led to the downsizing of staff. With many affected employees turning to the gig economy for short-term employment solutions, they remained cautious about an uncertain economic climate. Consequently, consumers started to seek sector-specific insurance coverage, such as for travel or hospitalisation, instead of committing to policies that require larger investments and longer terms.

This shift in consumer preferences has also disrupted the traditional agent-to-consumer approach within the insurance industry. Faced with a surging demand for life and travel insurance, insurers were compelled to adapt by transitioning from manual, pen-and-paper processes to the adoption of digital onboarding, or better known as Electronic Know Your Customer (eKYC).

Despite its complexity amongst agents, eKYC has emerged as a game-changer, not only in insurance but also in the banking and financial sectors. This technology has eliminated the need for time-consuming face-to-face meetings and paper documentation which offers a convenient and secure remote customer verification process. In many parts of Asia, eKYC has become a mandatory regulation especially in the banking, financial services, and insurance (BFSI) sector to prevent fraud, money laundering, and terrorism financing.

“Traditional KYC can be a major pain point for both parties, especially when customers are lost due to a complex and tedious transaction experience. The time it takes to verify a customer may take several business days, and it is a 50/50 chance that said customer is providing a legitimate document. By the time the documents have already been verified, the customer might have already taken their business somewhere else,” said Joe.

“EKYC has enabled the industry to onboard new customers remotely and securely, and better cater to the needs of the digital generation. Users simply need to submit a photo of their government-issued ID and a selfie, streamlining the verification process and ensuring regulatory compliance. The insurance sector can utilise the same eKYC and biometric authentication technology to verify online users during the application process and subsequent transactions,” he continues.

This shift towards digital onboarding has allowed insurers to expand their market reach worldwide without delays and creates an always-available, digital self-help platform for the customers’ insurance needs — anytime and anywhere. It empowers insurers to adapt their operations and processes to comply with regulations across the globe, all while maintaining security and efficiency.

Regulators worldwide are encouraging the insurance industry to embrace digital innovation, as it promises a more strategic and secure future. Insurers who prioritise customer convenience while ensuring secure transactions are poised to lead the industry's transformation toward a fully digital landscape.

As the ASEAN insurance industry embraces these digital trends, customers can expect an always-available, digital self-help platform for their insurance needs – accessible anytime and anywhere. This transition toward a digital frontier not only meets consumer expectations but also positions insurers for long-term success in an increasingly digital world.

This article is provided by Innov8tif Sdn. Bhd.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.