Over half of insurers in Australia continue to adapt to the impacts of the COVID-19 pandemic by accelerating their move to digital payments, according to the latest FIS Readiness Survey.
The Readiness Survey focuses on the entire capital market industry and explores how firms are transforming their technology and operations to compete in the future.
The latest survey found that 55% of Aussie firms are planning to accelerate their move to digital payments to improve their competitiveness.
Regarding reasons for shifting, 58% of the respondents aim to drive the shift towards digital payment solutions to deliver a better client experience. Meanwhile, 58% want to improve fraud detections and payment security as they look to manage potential risks in a post-pandemic world.
Among all available payment technologies in the country that Australian insurers are looking to invest in over the next 12 months, digital payments (70%) was the most popular. It was followed by mobile payments (60%) and real-time payments (55%).
Martin Sarjeant, senior vice president, product management, insurance at FIS, commented that the global pandemic accelerated the digitalisation of the entire payment space and impacted all industries – including insurance.
“With consumers paying via contactless methods including digital wallets, it seems antiquated for insurers to still be cutting and mailing checks to their policyholders,” Sarjeant said.
However, the survey found that only 55% of Aussie insurance firms ranked their capabilities in digital payments as very efficient – substantially behind the global average of 69%.
“Australia's insurance sector has not been as quick to embrace new technologies, with many firms relying on outdated legacy systems,” Sarjeant said. “Now, the sector is on the brink of a new era in payments modernisation, with almost three-quarters of Australian insurance firms planning to invest in digital payment solutions in the next year,” he continued.
“Those firms jumping on the digital payment's bandwagon will be quick to reap the numerous benefits, whether through improved client experience, better operational efficiencies, or enhanced fraud detection and payment security capabilities. What's more, these firms will be especially well-positioned to not only retain existing clients but create new customer relationships.”
