By Jinender Jain, Sr VP & Head of Sales, UK & Ireland, Tech Mahindra
To date, the 2020s can only be described as a perfect storm of testing conditions for any British business operating in the banking, financial services and insurance (BFSI) sectors.
Turbulent market conditions, regulatory hurdles and Brexit posed challenges for even the most resilient of businesses at the best of times. Add the COVID-19 pandemic and disrupted world of working into the mix, and the need for digital acceleration shifted into hyperdrive.
The dust may still be settling, but the message has been clear for a long time; those who do not focus on digital transformation will be left on the outside looking in.
Take the insurance industry, which is significantly investing in building digital capabilities to achieve the best possible collaborative digital marketplace. Lloyds of London, for instance, has published its ‘Blueprint Two’ as part of the ambitious “Future at Lloyds” programme, which includes a comprehensive digitalisation strategy. The blueprint forms a benchmark for digitalisation in the UK market, given the fact that around 70% of the UK based insurance organisations operate in both London Market and Direct Insurance segments. Many more insurance organisations are embarking on digital transformation programmes across the enterprise that call for changes in business and operating models. These frontrunners are aligning with the modern dynamics of the connected insurance ecosystem and changing customer behaviour and preferences.
For those that are yet to begin this digital transformation journey, I wanted to highlight three of the biggest trends which will be impacting the banking, finance, and insurance sectors this year:
In a year set to be defined by fine margins, intelligent automation can increase business efficiency and create smart processes. In the banking, finance, and insurance sectors, however, the more important aspect relates to the amount of time saved and insights gained, which are crucial in crafting new experiences that keep clients coming back. Ultimately, intelligent automation will allow humans to focus more on meaningful, higher-order work.
Digitally-driven process automation will pave the way for lean and efficient operations. For instance, machine learning (ML) modules can unleash greater productivity and reduce errors by automatically optimising business functions. Equally, AI powered chatbots can support operations while guaranteeing user satisfaction. As a result, business services will be exposed to the external ecosystem through API-driven connectivity. The possibilities are endless. The results will be an enterprise that not only innovates more on the inside, but also delivers impressive experiences on the outside.
Data & Analytics
For an organisation to transform in this new digital era, it needs to build its operating model squarely around data.
For this reason, throughout 2022 banking, finance, and insurance organisations will be keen to leverage the power of in-house and external data (structured, semi-structured and unstructured data), employing the advanced capabilities offered by big data, artificial intelligence (AI) and machine learning (ML), as well as other complimentary technologies like robotic process automation.
Intelligent decision support mechanisms are being developed to augment and transform use cases ranging from customer service, underwriting, pricing, claims and other ancillary functions.
Finally, organisations in the banking, finance, and insurance sectors are aggressively adopting cloud technologies for both core and noncore workloads. The motivation is to reduce the capital expenditure and operating expenses across business and IT operations, while at the same time be in a strong position to keep pace with the fast-changing, competitive landscape.
With an ever-evolving regulatory landscape, cloud technologies can improve and aid governance and compliance, minimising risk for businesses in the banking, finance, and insurance sectors. In fact, cloud solutions have now advanced to the point in which they are more secure and reliable than traditional solutions. As British banking, finance, and insurance businesses continue to trade in new ways and new markets, the flexibility, agility and scalability that cloud computing uniquely offers will help to adapt to new regulatory requirements.
What’s particularly notable about intelligent automation, big data and cloudification is that these technologies have been at the periphery for years, slowly disrupting many back to mid office functions. However, the pandemic has shifted the emphasis from streamlining the back end to deploying them to face the new challenges faced by their customers. In the post-pandemic world, organisations in the banking, finance, and insurance sectors will be looking to harness these trends to differentiate themselves and build competitive advantages over their competitors.
For this very reason, the gulf between businesses which adapt and thrive to today’s data-hungry, always-online society and those that do not will soon become unbreachable. The door is not closed yet, however. By investing in digital transformation, the banking, finance, and insurance sectors will be able to harness the systems of tomorrow today.