Challenges facing bancassurance

Today, the bancassurance model is up against numerous challenges that can be summarized in five issues: training, competition, regulation, cybersecurity and claims management.

Training

• Bank staff trained in finance often lack specialist knowledge of insurance products, which can impair the quality of advice given to customers, thus limiting the effectiveness of distribution,
• Additional investment in training and adaptation to new technologies are often required to familiarize bank staff with insurance products and reduce communication errors and fraud.

Competition

• Competition from fintechs and insurtechs which are also developing innovative financial solutions, often focused on improving customer experience through intuitive digital platforms and simplified processes. The emergence of these startups has revolutionized the traditional bancassurance landscape.
• The sale and promotion of specific insurance products is the area of expertise of bank advisors. Insurance companies find themselves excluded from the marketing process.
• A potential conflict of interest between banks and insurance companies may arise in the case of certain products, such as savings and pensions.

Complex regulations

National regulations governing bancassurance vary considerably from country to country, creating inconsistencies and operational difficulties for global players.

Cybersecurity and personal data protection

• The growing use of digital platforms creates risks of cyber-attacks,
• The management of customer data, an essential tool for personalizing offers in the case of banking partnerships, raises issues of confidentiality, security and compliance with regulations on the protection of personal data.

Claims management

• The management of property and casualty claims is more complicated in a bancassurance contract, which can have an impact on distribution and the banking relationship as a whole,
• In the event of a dispute with the customer, it is also difficult to define who should assume legal liability, the bank or the insurer.