Use Cases and Opportunities to Explore
Use Cases and Opportunities to Explore
November 2019
By Edward Shane
There is growing interest in the adoption and deployment of Immediate Payments by the insurance industry in North America. The need to transform workflows to accommodate digital payment technologies has never been greater as insurers seek to reduce expenses, eliminate dependency on paper and transact with policyholders demanding an electronic-based, immediate and transparent user experience. The stakes have never been higher nor the timeline more compressed for insurance companies to evolve or risk the dual consequences of bloated expenses ratios and policyholder attrition.
The terms Faster and Immediate Payments have quickly become generic industry catch phrases for those transactions processed through Early Warning’s Zelle®, and The Clearing House’s Real-Time Payments (RTP®) networks. The growing adoption of these networks can facilitate multiple outbound payments applications, including those originated to insureds, business partners and vendors. Obvious applications include the payment of claims to insureds and services providers. There is, however, a litany of additional outbound payment types that are ideal for digitization.
Often overlooked and certainly worth highlighting is the revolutionary impact to the premium collections process that is likely to evolve from the RTP Request for Payment (RFP) functionality. Insurers are quickly learning that they can transact directly with their customers by utilizing the messaging component of the RTP Network® to instantly present premium collection e-bills with data-rich remittance information.
Leveraging the BNY Mellon RTP RFP message solution enables the e-bill to allow your insureds to view the request and payment-related information and be presented with an option to pay instantly. Once the payment is processed, final, irrevocable funds are instantly credited to your account at BNY Mellon.
Most companies are intrigued with the notion of payment transformation but uncertain of dipping their toe into these uncharted yet enticing waters. Many of the insurance clients we speak with don’t know where to begin or what barriers of entry they might encounter with Immediate Payments transactions.
To help with this effort, we have compiled a set of use cases at the business application level to provide recommendations for piloting Immediate Payments and conducting proof-of-concept (POC) experiences that can be leveraged for large-scale rollout at the enterprise level.
The following chart offers payment channel options and collections scenarios we recommend your organization consider testing along with the appropriate processing network applicability:
The realities of deploying a new payments system can be a daunting undertaking especially if, like most organizations, technology resources are scarce. Absent the allocation of technology for a full-scale “build and test” of the RTP or tokenized networks, it may be difficult for insurers to effectively evaluate the business applications that should be targeted and prioritized.
BNY Mellon can help by lowering the barrier to experiment with Immediate Payments and offering several methods to initiate RTP and tokenized transactions. Your evaluation process can follow these simple steps:
Keep in mind that the network you choose to test with might also be determined by the client/ vendor/payee information to which you have access. Ready access to previously captured banking information, email or mobile phone number details might drive the network choice in some instances.
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