New technologies are disrupting industries by driving more efficient ways for businesses and customers to interact. Industry leaders, such as Allstate Insurance Company, are harnessing this disruption by adopting innovative tools that help meet their customers’ changing expectations.
Allstate spotted an opportunity to speed claim disbursements by switching from paper to mobile payments. The company adopted Digital Disbursements from Bank of America Merrill Lynch (BofAML), which enables Allstate’s customers to quickly receive funds via text message or email. The results? Higher customer-satisfaction scores and greater security.
TAKING A NEW APPROACH
Allstate started shifting away from checks in 2013, seeking greater efficiencies and reduced fraud. “We first began offering claims via ACH, but adoption was low since most customers didn’t know their routing and account numbers,” says Lynn Cirrincione, Allstate’s cash and banking director. Cirrincione reached out to BofAML about a payment method that would accomplish the company’s goals while making it easier for customers to receive funds.
BofAML’s disbursements team recognized the power of Allstate’s opportunity. Having collaborated with other banks to form Early Warning’s® clearXchange, the first peer-to-peer payments network created by financial institutions, BofAML was already exploring ways to adapt the platform for business clients. Drawing on its history of payments innovation, the bank leveraged the clearXchange network to launch Digital Disbursements—a brand new way for companies to send money to anyone with a U.S. bank account.
ENABLING MOBILE B2C PAYMENTS
Since 2011, millions of individuals have used clearXchange to send funds to each other via text message and email, without the need to share sensitive bank-account details. With Digital Disbursements, BofAML helped Allstate become the first company to leverage the technology for business-to-consumer payments. After a successful pilot, Allstate began offering Digital Disbursements to all customers in 2015.
The process is easy to navigate. Allstate initiates a payment using the customer’s email address or mobile phone number. During a simple one-time registration, the customer links his or her bank account information to the email address or mobile phone number. Funds arrive directly into the customer’s bank account to help them quickly get back on their feet. And since clearXchange maintains a record of the registration, customers only need to register once. All future payments to registered customers are completed automatically.
ACHIEVING MUTUAL BENEFITS
“We initially sought this solution to achieve greater efficiencies and reduce fraud, and Digital Disbursements has definitely helped with that,” notes Cirrincione. “But the positive customer response has been even greater than we expected. Our satisfaction scores are rising, and we attribute this largely to the speed and convenience of our mobile payment program.”
Being an early adopter places Allstate at the cutting edge, confirming its reputation for innovating on behalf of its customers. “Advances in tech have created the expectation for real-time connections and service, especially among millennials, who already use P2P networks and prefer text messages to phone conversations and face-to-face meetings,” Cirrincione concludes. “In the next few years, as this generation becomes a bigger part of our customer base, we expect these trends to accelerate.”
- Enables companies to send payments to anyone with a U.S. bank account
- Participants can reach more than 100 million online banking and 70 million mobile banking users in the U.S.
- In Q1 of 2016, clearXchange participants completed more than 46 million P2P transfers, totaling $16 billion
- More than 30 million registered users
- 81% of unregistered recipients registered within two days of receiving payment
1 clearXchange, October 2016
Case studies are for illustrative purposes only and intended to demonstrate the capabilities of Bank of America Merrill Lynch. You should not consider these case studies as an endorsement of Bank of America Merrill Lynch. Case studies do not necessarily represent the experiences of other clients. Results may vary.