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Cybersecurity Insurance, AI and Chatbots

Two of today’s hottest tech topics — cybersecurity insurance and artificial intelligence (AI) — were well represented at recent conferences in insurance and banking, respectively: Advisen Cyber Risks Insights Conference and Bank AI Expo. Here’s my take.

Advisen: Barbican Takes a Leadership Stance on Cybersecurity Insurance

At Advisen, our team was again on hand to showcase the FICO® Enterprise Security Score (ESS), and what a difference a year makes! In 2016, FICO was still a relatively new player in the cyber and enterprise security space. In 2017 we were honored to receive a Chartis Innovation Award for the Enterprise Security Score, in recognition of the market-proven predictive analytics and innovative machine learning technology FICO has successfully applied to the cyber domain.

Our FICO ESS customer, Barbican Insurance Group, participated in an excellent panel discussion about the evolution of the underwriting process. Barbican’s Cyber Business Group Leader, Graeme King, explained, “Risk and IT can be disconnected in respect of to cyber insurance. There can sometimes be miscommunication between the IT function, which controls the items introducing risks, and the risk management group, which buys insurance cover to protect against these risks.

“Underwriters and brokers need to exert more positive control in the engagement process,” he continued. “Barbican has partnered with FICO to assist in the effort.” Barbican is using FICO Enterprise Security Score Profile as part of its risk assessment of potential insureds prior to offering cybersecurity insurance coverage, but “a one-off exercise is not enough,” King said.

Thus, Barbican is also offering insureds the opportunity to subscribe to the FICO ESS Portrait service for ongoing self-monitoring, crediting the cost of the service against their premium. “FICO ESS is a powerful risk mitigation tool. By running scans and receiving reports on an ongoing basis, enterprises can ensure that the people, process and technologies they use to protect their data assets are operating at maximum efficacy.”

King concluded, “In this way, we are turning insurance into an incentive instrument, versus just a risk transfer instrument.” I absolutely agree. You can read more about Barbican’s use of ESS in their news release.

Bank AI Expo: Chatbots Not Yet Ready for Prime Time

At this conference, I expected to see a broad range of the ways that banks are using artificial intelligence. Sure enough, Arif Ahmed, SVP of Payments & Emerging Tech Innovation at U.S. Bank, gave a fascinating look at how the institution is applying AI across the entire bank, from fraud protection to omnichannel integration to voice recognition.

Voice recognition was indeed where most of the Bank AI Expo main-stage demos focused. Unfortunately, other than a dynamite demo from Bank of America’s Michelle Moore, Head of Digital Banking, most of the other five or six others that followed showed how voice recognition, mainly realized in chatbot virtual assistants, is not yet ready to be unleashed upon today’s demanding customers.

All of the demos showed chatbot technology as an Apple iPhone app, with the presenter asking it questions on stage. The questions were rendered on the iPhone and the chatbot returned responses. A number of presenters had bad luck with their live demos, with the chatbot talking over them or simply presenting the wrong information. Every tech executive knows that live demos are always a gamble, but having a live demo backfire in front an industry audience is far different from having live chatbot technology work poorly for a customer.

It’s true that “AI changes everything,” the mantra of Bank AI Expo and of the entire banking industry these days. But there’s still a lot of confusion about how to best use this exciting technology. In my view, there’s an initial strong focus on automating the customer conversation because that’s an obvious first step, made readily attainable by the availability of free natural language processing (NLP) software. Again, I believe that companies like Bank of America have done a fantastic, robust implementation of NLP in their chatbot app. Other startups have put together “cheap and cheerful” versions that show how easy it is to get started with AI, but how hard it is to get it right.

The Goal: Improving Customer Experience

Another key theme at Bank AI Expo was that “if you own the customer experience, you own the banking relationship.” Of course, this is true — but for now, only a high-quality chatbot presents an improvement over legacy interactive voice response (IVR) and other incumbent contact center technologies.

U.S. Bank’s Ahmen hit the nail on the head when he said, with regard to AI, “In the last two decades there’s been enormous change in the types and volume of data we can now access, and the processing power available to data scientists.” As the banking industry learns how to better harness new data and unlimited processing power, I’m confident that AI will transform the industry, and the banking customer experience, for the better.

Keep up with my latest chatter on Twitter, where you’ll find me @dougoclare.

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