Legacy Systems Prevent Financial Services Retailers from Embracing “Age of Personalization”
Staff Writer | February 29, 2016
Twenty-four percent of global financial services organizations run the risk of falling behind competitors because legacy systems are preventing them from offering customers fully personalized services, according to research undertaken by Marketforce. The study was conducted on behalf of strategic business applications provider Pegasystems and Cognizant, a provider of information technology, consulting, and business process outsourcing services.
The study surveyed 500 financial services and insurance industry executives, across 56 countries, to examine the challenges and opportunities they face due to rapid technological change. The study found that, while the majority of financial services retailers have plans to use data from connected and wearable devices to build detailed personal profiles of their customers and their behavior, nearly a quarter were unable to do so.
Many of those without such plans cited the inability of existing legacy systems, such as customer segmentation tools, to use and interpret customer data as a barrier to offering fully personalized services, leaving them reliant on outdated customer segmentation tools instead of newer, cutting-edge Customer Relationship Management solutions.
Data from newer, connected technologies, such as wearables, is playing an important role in enabling organizations to provide personalized offerings to customers, and the study showed the number of retailers in the financial services sector intending to offer these products continues to grow. In fact, 38 percent of survey respondents expect to use data from wearable devices to personalize their offerings within two years, with 68 percent expecting to do the same within five years.
Almost one quarter (22 percent) also said that they expect to use data from connected cars for the same purpose within two years, with 59 percent expecting to accomplish this within five years. Furthermore, 40 percent expect to use data from these devices to accurately predict the individual requirements of customers within just two years, with 83 percent expecting to achieve this goal within five years.
Despite this, almost one quarter (24 percent) of financial services retailers said they currently have no plans to offer customers full personalization, citing the inability of legacy systems to cope with these new data sources as the biggest obstacle. Of these respondents, 79 percent cited the lack of a single customer view as a barrier to offering full personalization to customers, while 85 percent cited the difficulty of processing very large data sets.
These respondents stated that the biggest obstacle to personalization was the lack of availability of sufficiently rich customer data, with 88 percent suggesting that their existing legacy systems are unable to connect to data flows from newer, connected devices.
“It’s never been more important for financial services organizations in the retail sector to understand customers, and personalize services to meet their needs. We live in an age where ‘Generation Selfie’ is king, and the expectations of customers across all sectors are increasingly influenced by the experiences they get from digital leaders such as Amazon and Netflix,” says Graham Lloyd, director and industry principal of financial services at Pegasystems. “For this reason, it’s critical that those in the financial services sector invest in technology that enables them to mine the rich seams of available data that can help them truly recognize their customers as individuals and personalize their customer journeys accordingly. Those that don’t could find themselves falling a long way behind.”
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Crawford Technologies Announces Release of ePresentment Gateway for Box
- New Study of More than 100 Insurers Finds Success Among Early Adopters of Emerging Tech, Says Novarica
- Anshuman Purohit Assumes Senior Technology Leadership Role at CastleBay Companies
- AVYST Welcomes Kitty Ambers as Chief Growth Officer
- Agero Strengthens Executive Team with Bill Gerraughty as Chief Financial Officer
- Electronic Chat with Jeroen Morrenhof
- 2019 Global Insurance Accelerator Cohort Reflects Evolution of InsurTech
- Nearly 50% of US Insurers Are Enhancing Security Capabilities Across the Board, Says Novarica
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA LIVE 2019
The tide is up! It's time to register for ITA LIVE 2019, our annual educational and networking conference! Our theme is "The InsurTech Revolution: Cutting Through the Hype." and we'll be bringing in a torrent of industry thought leaders, amazing insight and wonderful perspectives on the world of insurtech and its impact on the insurance landscape.
ITA LIVE 2019 will present real-life examples of true startup technologies that are helping insurers gain real advantage -- and a competitive edge -- in the marketplace. We’ll highlight the more successful InsurTech partnerships, while offering case studies that demonstrate exciting innovation and cutting-edge techniques impacting all aspects of the insurance ecosystem.
Ride the wave to LIVE 2019. Sign up today! We look forward to seeing you in May, 2019!
BLOGS AND COLUMNS
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE