Client Story: Insurance provider digital transformation

U.S. Bank APIs enable digital payment options that help insurer save money and improve customer experience

When a global provider of employee insurance benefits embarked upon company-wide digital transformation, it realized there would be unique challenges in upgrading its money movement technology. With more than a dozen administrative systems across the enterprise, none of which could support emerging cost-reducing and consumer-friendly payment types, the company needed a digital-savvy banking partner to propel it forward. In 2019, it turned to U.S. Bank.

Since then, U.S. Bank has been listening, strategizing and collaborating with the company, helping it achieve greater payment efficiency, fraud mitigation and customer satisfaction.

About the client

The Fortune 500 company views its digital transformation as a competitive advantage in the paper-burdened insurance industry.

  • The challenge: Cut costs and improve the customer experience by offering easy-to-adopt digital payment alternatives.
  • The solution: U.S. Bank Payee Choice and its growing menu of API-enabled payments and treasury management solutions.

A digital initiative to remain competitive

Printing, postage and all the processes involved in managing paper are costly and weigh down financial performance. Lots of paper also frustrates customers. As a result, the company initiated a comprehensive effort to undergo a digital transformation in insurance. It began with a holistic analysis to modernize and improve customer experience, asking questions such as: How can the business convert customers to paperless billing? Can it provide digital platforms for customers to review their statements or file claims? And, in Treasury, how can it provide digital payment options to the consumer?

Driving digital insurance payment adoption with Payee Choice

The partnership between the insurance company and U.S. Bank began with the insurer’s adoption of Payee Choice for disability claim payments.

For years, the insurer has offered customers making claims the option of receiving a check or an Automated Clearing House (ACH) payment. Now, with Payee Choice, when the insurer wants to pay a disability claim, it sends payment instructions to U.S. Bank, which emails a notification to the claimant that a payment is available. The email directs them to the insurer’s branded website, where they choose a payment option. In addition to traditional check and ACH, Payee Choice allows customers to choose a faster digital payment alternative, Zelle® network funds transfers.

Zelle® is an alias-based payment method, meaning the only information beneficiaries must provide is an email address or phone number. In cases where the insurer’s customers fear providing bank account and routing numbers, an alias-based payment rail like Zelle® offers greater security and produces more customer confidence, giving the insurer a much better chance of getting customers to opt for a digital payment system.

Leveraging U.S. Bank payment APIs

The global insurer uses U.S. Bank’s application programming interfaces (APIs) to streamline the setup for accepting Zelle® and ACH payments.

The customer portal allows users to opt for same-day payments and choose their preferred channel. If the customer selects Zelle®, the Disbursements via Zelle® API uses the customer’s email address or phone number to determine within seconds if the customer has an account registered with Zelle®. If the customer does not, the portal recommends payment via ACH.

The company also uses the Account Validation API to confirm in real time the bank routing and account numbers that customers provide when selecting the ACH payment option. Both APIs help the insurer validate on the front end that it’s taking in good payment information, which reduces failed, delayed and fraudulent payments.

A responsive, collaborative partner

The insurer was an early adopter of Payee Choice. Its digital incubator team worked closely with a digital payments innovation team at U.S. Bank to improve the new service and quickly customize it to meet the company’s needs.

“From the start, we were meeting regularly with the bank’s working group, and they were making changes very quickly to fit our business model,” explains one of the company’s treasury managers. “For instance, on different occasions, we asked for changes to the client email communications, to how customers log into Payee Choice, and to how we automatically receive payment status information. Each time, the bank rapidly responded with the desired update.”

More payment choices and future plans

One of the benefits of Payee Choice is that a company can add payment types to the portal without extensive development time and effort. And more options can result in greater digital payment adoption and increased customer satisfaction.

In early 2022, the insurer added real-time payments through the RTP® network to the customer menu, and the company plans to work with U.S. Bank to add a push to debit card option.

Another future strategy is to use Payee Choice to migrate more ad hoc payments from checks to digital payment types. The plan is to start offering digital options with escheatment payments and then potentially make those options available to insurance brokers when they have payments coming from the company.

“From the start, U.S. Bank made changes very quickly to fit our business model. Each time, the bank rapidly responded with the desired update.”

- Treasury manager for the global insurer

Faster payments support customers in need

Providing customers with faster, digital payment options is vital in the employee benefits insurance business. “When paying claims, we’re supporting people that often are in need and out of work. They require our payments to feed their families,” explains a senior financial analyst at the company. “So, if we can get these payments to them hours or even days earlier, it could really make all the difference.”

Another finance executive at the company offers further perspective on the importance of the company’s payments partnership with U.S. Bank: “We’re helping people get through all the different moments of their lives, and that’s a huge underlying value for us,” she says.

By partnering with U.S. Bank and using banking APIs like Payee Choice, the executives say, the insurer is giving customers payment options they are comfortable with and enabling them to get paid faster and easier — all of which aligns perfectly with the company’s mission of enhancing the customer experience.

Talk to an expert on APIs and faster payments

Faster payment options can help transform your company and provide a better experience for your customers. The U.S. Bank team is here to build a solution that fits your goals.

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Start of disclosure content

Deposit products are offered by U.S. Bank National Association. Member FDIC. Credit products are offered by U.S. Bank National Association and subject to normal credit approval. Eligibility requirements, restrictions and fees may apply.

Zelle® and the Zelle® related marks are wholly owned by Early Warning Services, LLC and are used herein under license.

RTP® is a registered trademark of The Clearing House Payments Company LLC.

The foregoing products are available solely for business transactions and not for personal, family or household transactions.