An Evolving Industry and a New Way to Work
The insurance industry and the technology that supports it continue to evolve. Licensing and registration operations must remain at the forefront by providing extraordinary levels of efficiency and continuous assimilation of best practices. In recent years, important trends have emerged, and currently, the industry is responding to a pandemic crisis with grit and ingenuity.
The Growth of Call Centers, Evolving Role of Technology
First, call centers, both internal and outsourced, have grown, a result of the insurance industry’s increased digitization and the popularity of robo-advisers. This, in turn, is driven by a new generation rising higher through the business and overall evolving expectations of what technology should provide. In addition, there are products that are conducive to online purchases, such as term life. When a call center is a part of the distribution model, the ability to onboard and offboard agents rapidly is absolutely critical. This includes credentialing for multiple jurisdictions: licensure, appointment, and completion of mandated product and industry training.
Once a Liability, Now an Asset
Another trend is strategic and has to do with recruiting and retaining top talent. The C-suite has begun to view onboarding, licensing, and registration operations as a vital element of revenue generation rather than a necessary cost center. Top agents and advisers want to be associated with tech-savvy firms that provide them with a seamless experience, and insurance companies acknowledge that such first impressions of themselves are paramount. These producers, many part of an emerging younger generation, expect a firm to know who they are, they expect to know what their credentials are and where they are held, and they expect a frictionless process for onboarding, being affiliated and appointed, and placing business day-to-day. This is especially relevant to insurers, for which independent agents sell products for a dozen or more carriers. The ability to earn and maintain agent loyalty is key—chief distribution, revenue, and sales officers depend on the allegiance of their agents at achieve sales and revenue goals.
Consolidation’s Far-Reaching Effects
Consolidation in the financial services industry has been significant, with more than 649 transactions in 2019, compared with 362 transactions in 2014, and it continues. Even in a pandemic crisis, 2020 is set to meet or exceed last year’s level. In general, companies seek to gain market share, leverage their scale, and increase profit margins.
As broker-dealers consolidate the separate systems and operations they inherit from recent acquisitions, the most innovative firms have consolidated disparate operating functions into unified centers of excellence. To enable such a high level of continuous growth, they depend on highly efficient onboarding, licensing, and registration operations. This means employing for-purpose technology that automates licensing, CE, and renewal processes, and outsourced solutions provide scalability over numerous acquisitions—in some cases, 30 or 40 in a year.
Scaling and Streamlining
A more exacting and demanding regulatory landscape has been an unwitting contributor to the industry’s consolidation. To achieve a scale that supports more stringent compliance requirements and the necessary technological infrastructure, many firms have had to consolidate, divest, reclassify their products, or otherwise regroup. For example, Many fewer carriers sell variable annuity products, and many have divested their broker-dealer businesses. There is consolidation among vendors as well. Many firms are mitigating vendor risk by relying on fewer trusted partners with the ability to fulfill the more exacting requirements traditionally provided by niche participants. This is often a C-suite decision to gain economies of scale and lower the lifetime cost of ownership.
The COVID-19 Crisis and Working from Home
The coronavirus pandemic has created a new reality, affecting licensing and registration operations as we adapt to working from home. In every way, we have become even more dependent on IT, including organizations adapting their single sign-on processes. Transaction volumes fell in the early stages of the pandemic, but as of November 2020, they have risen back to previous levels, and in some cases, transaction counts are higher. Many companies used some of the early downtime to bring new products to market. Others have seen a rise in term life policies, streamlining underwriting processes in response. RegEd’s clients have relied more on its Xchange functionality, using operating and productivity reports as a useful basis of comparison to pre-pandemic metrics and facilitating all aspects of working from home.
Most licensing and registration requirements can be executed from a remote working environment, but there are exceptions. Paper checks still need to be issued for state insurance commissioners, which requires new processes and procedures for compliant close-out. Continuing education for call center agents has also been affected by the new work-from-home transition. Typically, they attend brick-and-mortar classes where their paperwork is collected. Firms dependent on call centers have had to adapt quickly to electronic education and document management to ensure health and safety.
RegEd is the market-leading provider of RegTech enterprise solutions with relationships with more than 200 enterprise clients, including 80% of the top 25 financial services firms.
Established in 2000 by former regulators, the company is recognized for continuous regulatory technology innovation with solutions hallmarked by workflow-directed processes, data integration, regulatory intelligence, automated validations, business process automation and compliance dashboards. The aggregate drives the highest levels of operational efficiency and enables our clients to cost-effectively comply with regulations and continuously mitigate risk.
Trusted by the nation’s top financial services firms, RegEd’s proven, holistic approach to RegTech meets firms where they are on the compliance and risk management continuum, scaling as their needs evolve and amplifying the value proposition delivered to clients. For more information, please visit www.reged.com.