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Showing all posts tagged with Digital trust

< The beta blog | Nov 11, 2014

Digital technologies are allowing insurers to take customer connection to a new level

In the mid-2000s price comparison websites changed the insurance market. They shifted power into the hands of the customer by providing the ability to access and compare information and research for free. But since then insurers have wrestled with the challenges faced by the digital age. Insurers have struggled to build customer loyalty in what is now a highly price conscious and high-switching UK market, and many have struggled to engage customers to meet their changing demands.

It is no longer acceptable to think of ‘an insurance customer’. Customers’ experiences are being transformed by online retailers, search engines, social networks and other industries. Because of these experiences, customers are justifiably demanding more from their insurers.

And insurers can no longer ignore these threats from other industries because these companies are now their competitors. Our data suggests there is a growing customer demand to buy from alternative providers. 18% of customers are prepared to buy an insurance product from an internet search provider, 15% would buy from an online retailer whilst 5% would buy from a social network.

The UK market is one of the most digitally mature in the world. 86% of customers conducted some kind of online research, while that converts to only 50% of insurance policies that are bought online. Insurers have a huge opportunity to bridge that gap. Customers not only want to buy online but also to interact with their policy online, when it is convenient for them. Customers don’t think in terms of ‘channels’ and instead think about their how best to achieve their goal. They want to communicate with their insurer by phone, email, online and on social networks and expect a service that meets their goals and achieves the outcomes they’re looking for as simply and easily as possible. Above all they want a service that is tailored to their needs.

Insurers need to break away from a one touch per year relationship, digital provides a way to connect with their customers in new ways, and use it to provide a highly personalised service. For years insurers have prioritised risk data, rating factors and product development over listening to their customers and providing the experience they demand.

The digital insurer of the future must look beyond seeing digital as an add-on, and instead see it as a key driver of change for their entire business. Insurers don’t need a digital strategy, they need a business strategy fit for the digital age. 

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< The beta blog | Oct 22, 2014

Big Data: Big Danger?

On Sunday 19 October I took part in the Institute of Ideas' annual Battle of Ideas at the Barbican which aims to encourage free-thinking and open-ended public discussion on a range of topical subjects. PwC is a proud sponsor of this yearly event.

The other panellists for the ‘Big Data: Big Danger?’ session were Sheila Bird from the Cambridge Institute of Public Health, Marion Oswald from the University of Winchester, and Sandy Starr from the Progress Educational Trust. The session was chaired by Timandra Harkness.

The session looked at the danger and opportunities of Big Data. I focused on 4 topics: Definitions; Decisions; Next step; A new Data Deal.


Let’s start by the definition of Big Data, which is assumed often to be understood, but seems to mean different things to different people. There is no right or wrong definition. To me, big data is the ability to use lots of data to support decisions.

That begs 3 questions:

First question: What kind of data? Let’s start with where I live (GPS), who lives with me or next to me, what I read and buy on the internet (cookies), how I use my phone & iPad, my car (GPS), what I buy (credit cards), what we watch on TV (Set Top Box) or listen on radio (DAB), what our neighbours are like (post code socio demographic and behavioural data). And of course a very thorough picture of my health profile. There is one thing which isn’t known (or should not be known), it is my name, as it will have been taken out of the data and replaced by a number. Marion Oswald talked briefly about getting the right law and regulation. There was a great article in the Evening Standard developing these points.

Second and third questions: Data to do what? And for whom? We can use big data to improve health, to improve security and detect frauds. In which cases, the beneficiary overall is “society” – and that’s all of us. Big data can also be used to help me get a cheaper car insurance. It requires me fitting a “black box” monitor that allows my insurance company to know how I drive, which presumably will demonstrate with real time data that I respect speed limits and do not drive erratically. In that case, I benefit and the car insurance company too (and the manufacturer of the black boxes, and those employed to build them).

Automatic Decisions

Big data has also come to imply that decisions are made by computer programmes, or with Artificial Intelligence, automatically. For some, alarm bells start ringing. Let’s look at two examples and check the benefits and the dangers:

Many organisations are already equipped with software that processes invoices automatically. The software checks: “Is this invoice matching a contract we have? Has the invoice been authorised by an approved person? Is the amount within the authorised payment bands? Do we have enough funds to pay now?” That saves the organisation time and improves accuracy, which means suppliers can be paid in a timely manner. When these software packages are well tuned, the entire payment process is more efficient and effective. That seems to be a good thing.

But some would say that isn’t really big data, but simply automation of repetitive, standardised tasks. That’s true. Big data comes in the next step: using all these payment transactions, over a few years, to help organisations manage the overall picture of what they spend, with whom and when. Big data can help describe what has been spent, then it can help predict where the spend will be. It can help detect “abnormal” payments. It can help predict whether there is too much risk concentrated into a few suppliers. Think Fukushima and the problems caused indirectly to Apple and its super-efficient but perhaps too concentrated supply chain.

The second example builds on my car insurance example. What happens if somebody in my family starts driving the same car with the black box, but starts speeding regularly, and has a few “erratic” driving episodes? The insurance company may reserve the right to terminate its coverage of my car. Not great – but at least I should have known.

Extending further to the health sector: What happens if personal health conditions are used to impact eligibility to jobs, promotions, healthcare coverage?

It is easy to predict that big data applications to automate decisions to improve efficiency and effectiveness will continue to grow. For example, one could imagine that IBM’s Watson computer will soon lead to create better call centres through the application of excellent Natural Language Processing proprietary software.

Next step: Bring individuals truly in

Will there be more big data applications where the stakes are more personal? It depends if the public and organisations can work together to improve Awareness and Choices and build Trust.

First, Awareness:

Do we know what data about us is stored by what organisation? I found that of the 20 or so respondents to an informal survey in the PwC Data Analytics community, about 50% felt there were at least 50 organisations holding some of their sensitive data. Personally I stopped the exercise at around 35, knowing full well that the total is probably north of 150.

And it is not easy to find out what is held about each of us, as it seems one needs to ask each organisation that has some of your date what they hold. Those organisations in the EU are legally bound to give you an answer.

Second, Choices:

Are we truly given a choice to let our data being collected (and how much), stored (where), aggregated (with what other data, from what sources), passed on /sold on (to whom and for what purpose)? My view is that organisations probably need to become more customer centric and much more explicit about what they do with “our” data … which they seem often to consider “their” data.

Third, Trust:

I have three adult children, all quite digital. And the debate has been raging. Should we or not be bothered about sharing our “data” and trusting organisations to use our data ethically? The traditional line is “if you don’t have anything to hide, why would you worry.” That seems to be generation dependent. I don’t believe I have much to hide. I am sure I don’t want to share all of my life with every organisation.

We all have organisations we trust more than others. Personally, I will tend to be more trusting of organisations with a public-interest purpose. For example, the BBC, the British Library and the British Museum have missions to expose people to old and new content. Would I trust them to help me achieve a goal (e.g., learn more about French Modern History)? If getting a BBC/BL/BM recommendation of books to read, shows to watch or listen to, and exhibitions to visit requires me to share my goals, my reading list and habits, my diary, my viewing and listening habits, then I would.

A new data deal

Alex Pentland at MIT talks about the need for a new data deal. My colleague, Carlo Gagliardi, talks about putting the customer in charge of their data in a blog for the Management Consultancies Association. Working on raising Awareness, increasing Choices and building Trust – or ACT as a simple acronym to remember our next steps – is today’s challenge for organisations wanting to take advantage of enormous opportunities with big data. Without active promotion of Awareness, Choices and Trust it will much more difficult to realise the phenomenal potential of big data, as it will be seen by many to present more danger than benefits.

One final observation if I may. When we stop exercising, our muscles become weaker. I wonder if each of us relies too much on big data to make decisions for us, we will lose the opportunity to “practice” making simple decisions, and thus lose some of our sharpness in making choices. Remember being able to read a map?

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< The beta blog | Oct 9, 2014

In a world that's in beta, are new consumer risks looming just around the corner?

As the volume of digital interactions between people & businesses continues to grow, so does the amount of data created and available to those businesses. The challenge of analysing that data for commercial gain is becoming ever more urgent and apparent, as organisations seek ways to derive value from this expanding asset.

But insight from data has the potential to do more than just result in commercial gain. It can also help regulated businesses ensure compliance, drive better customer outcomes, and build more trust in their brand. We are seeing increased activity and interest in these areas from Financial Services organisations in particular. Aggregated and integrated data about customer transactions is now being routinely collected by many FS organisation. It should be relatively easy for a bank, for example, to avoid selling a product or service to a customer when it’s clear from that customer’s transactional history that such a product would be inappropriate.

Data can and is being collected about employee behaviour as well as customer behaviour. For example web-based tools can help organisations understand how employees behave when faced with key dilemma's and trade-off's. It is how people behave in these moments that can give a real insight in to the culture of the organisation, which is something regulatory bodies around the world are putting an increasing focus on. These same tools can then translate these behaviours into a level of "Conduct Risk" for the organisation which can in turn be correlated with customer outcome data.

The amalgamation of this data is now enabling many FS organisations to take pro-active measures to change employee behaviours in service of better customer outcomes, regulatory compliance and, ultimately, more sustainable profits.

We have developed our own tool which we've called Conduct First which is a scenario based survey tool that organisations use with their employees to understand what actions they would take when faced with a difficult dilemma or trade-off. It enables the organisations to understand the conduct related risk associated with their actions and predict future risk based on the behavioural norms of the organisation.

The solution has been designed for service-based organisations that want to ensure that poor service standards, mis-selling activities and customer complaints are minimised. Find out more about it on the PwC UK website here.

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< The beta blog | Oct 7, 2014

CCO Questions #5: Will transparency harm the trust customers have in you?

“The true test of a man’s character is what he does when no one is watching.”

So said John Wooden, pretty much the most successful US basketball coach of all time and a double hall of fame inductee. Wooden had a knack for simple quotable statements that inspired his players on the court but most were great life lessons too. So what do Wooden’s words mean for us in business in the digital age?

Providing value to customers and a great return to shareholders shouldn’t be in conflict but in the short term, cut and thrust of day-to-day business, it can be hard to square that circle. You might even argue that creating long term customer value requires some short term compromises along the way.

In the modern digital environment this attitude just isn’t fit for purpose. Almost everything a firm does can be seen and shared in seconds. The belief that decisions and discussions can be made behind closed doors is an actively dangerous one. You have to assume that everybody is watching all the time. As the representative of the customer, the CCO should make sure that the whole business understands that and behaves accordingly.

Transparency is a fact of life now, whether it’s something you do by design or not. That means CCOs must champion the CCTV test: Imagine a security camera is recording what you are doing or saying right now. When that footage ends up on Youtube, are you happy for your customer to see it? If not, then you shouldn’t be doing it.

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< The beta blog | Oct 1, 2014

What's the key to social media success?

In the digital age organisations are using social media to build trust with their employees and their customers. Used well, social media enables organisations to innovate, stay ahead of the competition and engage with their customers on a more personal level. But, while social media offers a large number of opportunities, the key to achieving success is to have a well thought through strategy that is underpinned by good governance and risk management.

Watch our video to see how to harness the power of social media through good governance and risk management.

What do you think is the key to social media success?

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< The beta blog | Sep 11, 2014

20 Questions for the CCO: #4 Have you adapted to the visual world?

According to trade body IMRG, UK online spending will rise by 17% this year. That’s a whopping £107bn of products we’ll buy without necessarily seeing or touching.

What’s interesting is that we haven’t changed (our need for a deeper experience of a product before we commit to purchase is the same). What’s different is that we are now fulfilling that need through high quality imagery, video and digital experiences.

For example, every serious automotive manufacturer has an online configurator now. Drivers can personalise a near real image of the car they want, down to wheel choices and interior trim. They can rotate it, explore it and share it with friends. Increasingly an actual test drive with a dealer is a validation step, if it’s taken at all. Even traditionally dry industries like venture capital have embraced the visual world. Every pitch for crowdfunding investment comes as a slickly produced video, packed with infographics and animation. This extends post purchase too. We can often get the aftersales help we need from a ‘how to’ video, rather than calling a helpline or reading a manual.

The way firms interact with customers has obviously been shaped by the increasingly visual way we interact with each other. Sharing video and imagery through social media is the norm. It’s even the primary means of communication for some. Witness for example the exodus of teens from Facebook to Instagram as a way of ensuring a parent-free, visually driven experience. All of this change brings new and challenging demands for a CCO trying to manage customer interaction across an organisation. There are three key conflicts to resolve:

1. Quality vs volume – Creating compelling imagery and video in a socially enabled world can be a daily or even hourly job. Maintaining quality with volume requires the right processes, tools and partners. They need to be governed by clear guidelines that make on brand, quality production totally idiot proof.

2. Consistency vs flexibility – If a brand is the aggregate of all perceptions of a product or business, being consistent is critical. That means creating a common visual experience across all on and offline channels. Each will have different lead times to manage and may be owned by different functions within the organisation so coordinating them and defining the role they play in the visual landscape of a customer journey is vital.

3. Cost vs investment – Not so much a conflict as an imperative. The creation of high quality visual material and visually rich experiences has to be treated as an investment and protected from inevitable cost-cutting. Visually rich worlds that convey an experience of both the product and the brand are the new normal. Closing your eyes to the need is not an option.

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< The beta blog | Aug 6, 2014

Will commerce on social media erode digital trust?

Some of the leading social networks have recently announced that they will allow users to purchase products through their networks at the click of a button. This is good news for advertisers as it will give them enhanced metrics that allow them to measure return on investment and how social media can ultimately lead to sales.

However, I liken this development to so-called “in-app purchases” through smartphone or games console app stores. The operators of these stores have come under fire in recent months due to complaints from parents that their children are purchasing items from the stores without the parents’ permission. This has led to calls to change the way that in-app purchases work and Apple has even agreed to refund at least $32.5 million (£19.8 million) to customers who complained that their children had run up large bills by making in-app purchases.

It therefore begs the questions as to whether the same will happen when the social networks allow users to purchase products directly through their networks. Concerns have already been raised about how social networks are using users’ data and the networks will need to ensure that they can keep the details of any payments secure to avoid losing users’ trust.

Twitter plans to allow e-commerce around live events, or “in-the-moment commerce experiences” as it puts it. On paper this sounds like a good idea as news often breaks on Twitter before the mainstream media and world events can trend globally on the network as people follow developments as they unfold live on the Twitter feed. However, Twitter will need to provide assurance to advertisers that they have thoroughly tested the algorithms which serve up purchase opportunities for its users to ensure that inappropriate suggestions don’t appear beside world disasters.

For example, there were reports of some life insurance providers using the crash of Malaysian Airlines flight MH17 in Ukraine as a means of promoting their policies, something which attracted condemnation by many. If Twitter implements a mechanism that encourages people to buy products during a world event then it could harm both its own and the advertisers’ reputations if the adverts are deemed by the users to be inappropriate.

This wouldn’t be the first time advertisers have fallen prey to contextual based advertising and one only has to run a quick online search to find examples of where algorithms have served up inappropriate advertisements alongside serious news stories based on the specific keywords in the article content.

E-commerce through social networks could clearly be a big success for the social networks. But both the networks and their advertisers must ensure that the associated risks are identified and managed through a clear governance strategy to avoid losing users’ trust.

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< The beta blog | Jul 23, 2014

In a world in beta are we exposing too much about ourselves online?

We often try to keep certain details about ourselves off the internet, myself included. A common piece of information that many people like to keep hidden is their date of birth. Perhaps you have diligently configured your Facebook account to hide the year to make it hard to work out your age, or perhaps you’ve hidden the entire date.

Pretty sensible, you may think to yourself. However, have you ever stopped to think about what someone can tell about you just from your posts, or the posts that you’re tagged in? For example, you may have hidden your date of birth, but are you sure there are no photos from a previous birthday somewhere on your profile? Perhaps a photo of yourself blowing out the candles on a tasty-looking cake with a big “30” on it which has been tagged with the venue and a timestamp? Pretty easy then, in this case, to work out your date of birth!

Something else that many choose not to broadcast to the world is your home address. The problem is that while you may have hidden this information within your privacy settings, it only takes one geo-tagged post from your home to expose this information. The “so-what” factor really comes to bear when you think that most of us make posts or “check in” to places when we’re on holiday. Thus, these seemingly harmless acts can be all that a burglar needs to target your house, in the knowledge that you’re lying on a beach somewhere else!

The interesting and scary thing about this is that the personal data referenced above is used regularly by many credit card companies as a way of verifying your identity when you contact them. We’ve all answered “secret questions” before, such as your birthplace, pet’s name, favourite food etc. And, thinking about it, a lot of this information is pretty easy to guess based on your social media posts too.

In terms of the future, you only have to look at the ongoing growth of social media use globally and new innovations in biometric identification (illustrated in one of our World in Beta videos) to know that we will increasingly share more personal information – social or otherwise – about ourselves knowingly and, in some cases, unknowingly as time goes on.

So, you may wish to rethink what you share online and not rely on the fact that you have configured and reviewed your privacy settings… there are more clues in the other stuff than you may think.

Kay Dent · 6 months ago

Interesting and potentially unnerving thoughts, here. However, as technology develops, the companies that have access to this information - Facebook, for example - should be able to set up systems that automatically block indicators for certain personal information, like your date of birth. It might still be possible to deduce these things, but it would get harder if any photograph that indicates an aged birthday, for example, has the timestamp blocked (if the user chooses to do so). We could hope, therefore, that internet security develops at the rate of cyber communication.

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< The beta blog | May 19, 2014

As spending gets clickier, VAT gets trickier

As the competition for online consumer spend intensifies, it’s inevitable that new routes to market, distribution channels and payment mechanisms will evolve as suppliers seek out new and innovative ways of reaching as many potential customers as possible and develop means to make it easy and convenient to transact with them ‘in the moment’ (the one click panacea).

This is the field of dreams for content developers looking to get their products to the mass market, but of potential nightmares if you’re responsible for managing the associated VAT and other indirect tax issues - be it for those developers or any of the parties with a role in the distribution chain. It’s often difficult to determine who’s supplying what to whom and consequently who’s responsible for the VAT and where. Among other things, accurately forecasting revenue, appropriately contracting and maintaining the right pricing structure is beset with complication.

The plethora of new ways of doing business asks indirect tax questions that have never been asked before. There are a lot of uncertainties and even though some can be, and are being, clarified new uncertainties continue to arise as business models develop.

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