Identifying the 4 major challenges: Digital Transformation in the Finance & Insurance Sectors
While the digital revolution is turning the world of commerce on its axis and driving innovations in customer care, service provision and new product development – the financial services and insurance industries have been slow to innovate, until now.
These sectors are still early in their digital transformation; however, the growing demands of an increasingly savvy consumer and a highly competitive market place are beginning to put the wheels of digital change in motion.
Historically, paper-heavy work practices, cumbersome work flows and legacy software have been the calling card of the insurance and financial services sectors, but the arrival of artificial intelligence, big data, biometrics and automation to name but a few, are revealing the first signs of innovation. Augmented reality is being applied to advisory and pension planning work flows, the Internet of Things (IoT) and black box technology is driving more accurate premiums in insurance and artificial intelligence is improving the processing of documents and data. All these technologies share one common theme – improving process efficiency for the benefit of customer service and organisational profitability. Rather than simply adding value, tech innovation is beginning to change the way financial and insurance services are designed and delivered.
There are four challenges driving digital transformation for finance and insurance businesses:
Keeping pace with the demands of the modern consumer
The proliferation of mobile technology has made consumers more demanding and less loyal and shifting consumer expectations are one of the single biggest drivers of change. Thanks to Big Data and the Internet of Things, these industries now has access to far greater data about their customers. The challenge lies in knowing how to interpret it into actionable insights that will make risk modelling quicker and more efficient. Failure to capitalise on this data will see some traditional organisations lose relevance in the eyes of their customers. As McKinsey said “Companies that offer best-in-class customer experiences grow faster and more profitability. To reach this level, insurers must relentlessly improve customer journeys across channels and business functions.”
An increasingly competitive landscape
Changing consumer expectation is fuelled further by the growing number of tech-savvy start-ups who are using technology to give consumers the immediacy, personalised service and cost reductions they require, and they are rivalling the established players. While these businesses might not threaten the industry goliaths overnight, their power is increasing.
Taking a fresh approach to technology
Outmoded thinking and legacy IT systems are hampering progress for many organisations as they try to make old systems fit for purpose. While the Cloud has helped organisations to understand that technology can now be an OPEX rather than CAPEX cost, industry leaders need to commit to invest in new technologies in order to optimise business processes and make it easier and more cost effective to upscale and grow. Any investment in new technologies will be significantly out-weighed by the gains in terms of speed, efficiency, customer care and business competitiveness.
Compliance and security
The finance and insurance industries have some of the most complex and stringent compliance and regulatory issues in the world and making sense of how digital transformation fits within a compliance framework presents real challenge – particularly as many of these technologies have introduced greater risk into these organisations. The opportunity lies in finding the balance between upgrading security protocols to reflect the increasing range of threats and ensuring that technology can still drive innovation and growth.
Continuing to maintain the status quo is no longer enough. It’s time for financial services and insurance organisations to become digital champions and use technology as a catalyst for wider organisational change, process efficiency, improved customer care and greater profitability. In such a data rich, digitally-diverse and customer-centric age – companies have no excuse but to understand and cater for customers’ changing needs. Failure to stay relevant and keep pace with change will sound the death knell for many.
With the industry increasing its focus on being smarter, faster and better, systems such as DMC Canotec’s Uniflow document management and Managed Print Services (MPS) become an even more important part of a wider digital response to the changing demands of the market. Challenging the traditional MPS model and promoting broader digital transformation, DMC Canotec combines workflow automation, intelligent data capture and cloud communications to help businesses control costs, maximise staff productivity and improve operational agility.
To discover how DMC Canotec can help you begin your digital transformation, please visit our Finance & Insurance page.