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02

May

Key trends emerging in digital transformation approaches

With more organisations embarking on the first or subsequent stages of their digital transformation journey, it’s interesting to see the trends and patterns that are emerging, especially in the financial services and insurance (FSI) industry.

Key trends in financial and insurance industry (FSI) digital transformation

At a recent roundtable discussion with some of Empired’s FSI customers, we talked about some of the important trends we’re seeing in the industry. Businesses embracing these trends tend to show better results from their transformation projects, sooner.

POC and quick wins

One of the most important and valuable trends we’re seeing is the move towards proof of concept (POC) and quick wins in lieu of expensive, risky, monolithic projects. In fact, over the last five years or so, we’ve seen a dramatic shift towards this way of working and it’s paying dividends for businesses in all industries.

This is an important approach because technology changes so quickly, it’s impractical for an organisation to sign up for a five-year transformation project and expect that, at the end of the five years, all the technologies being used would be the same as the ones that were envisaged at the start of the project. Therefore, teams need to focus on what’s in front of them, using technology to deliver quick wins and then move on to the next project. To do this, it’s important to have tangible measures of success to work towards.

Funding and ROI

IT projects used to be funded directly on a case-by-case basis. Now, we’re seeing far more instances where funds have been pooled and allocated as needed to different transformation projects. This makes it even more important than ever that these transformation projects are able to demonstrate strong return on investment (ROI).

This is key because it lets project owners go back to stakeholders and reiterate the value of the project. As emerging technologies are applied, this is becoming essential since there is often inherent distrust of anything that hasn’t been implemented multiple times successfully.

Managing change

Transformation, by definition, is a more disruptive change than a standard new technology implementation. Therefore, it’s crucial to consider change management from the outset of any transformation project to ensure all staff members are adequately catered for.

This includes making sure systems are built from the ground up to reflect the actual needs and processes of end users, not some out-of-touch impression held by managers.

Bringing the legal team in early

FSI is such a highly regulated industry that the legal and compliance teams must always have a significant voice in the development and deployment of any new technology. Bringing the legal team in early on in the ideation stage is crucial; in projects where this has been done, we have seen the biggest wins.

The alternative is to wait until programs of work are nearing completion before the legal team gets involved. Usually, when that happens, the project is stopped in its tracks and the team has to do three our four additional releases to make sure the work is compliant. This is inefficient and frustrating but compliance is such a key component, especially in the FSI industry, that it can’t be overlooked.

Bringing in legal teams as stakeholders early on avoids this frustration because it ensures that compliance requirements are built in from day one. Furthermore, it provides an opportunity to educate the legal experts about the technology to dispel any fears or misunderstandings that may exist. This is usually relatively easy to do, since most transformation projects actually increase security, limit corporate risk, and enhance regulatory compliance capabilities.

Working with regulators

In the wake of the banking royal commission, regulators are naturally wary of innovative and unfamiliar technologies and business models in the FSI industry. However, it’s essential for organisations to innovate precisely to overcome some of the issues that existed previously. The industry regulatory bodies must not hold back innovation. It’s therefore important for organisations to work with the regulators to educate them and make sure they understand the value of these new initiatives so they can support the industry in moving forward.

Leveraging AI

Artificial intelligence (AI) is still nascent but it presents enormous opportunities. In the FSI space, most organisations are considering AI in terms of the value it can add to the customer experience and to the employee experience. It’s about finding ways to help customers deal with organisations more easily and without friction, and to lower operational costs.

It can be helpful for organisations to think about AI in terms of augmented intelligence in that it helps take the mundane, low-cognitive requirements tasks away from staff and let them pivot towards more meaningful work. This can dramatically improve culture as well.

At this stage, standing up bots as a POC is relatively easy and can be done in weeks if not days. However, taking that to a commercial model and deploying it at scale is more complex and requires a far more strategic and considered approach.

No room for error

When working with board members and business stakeholders that are inherently suspicious of emerging technology, there is no room for error. It only takes one instance of a failed technology for risk-averse stakeholders to shy away from further investment or initiatives. It’s important to understand this mindset and keep projects within the realm of the achievable so you can slowly build stakeholders’ comfort with new technologies.

To find out how Empired can help your organisation explore emerging and advanced technologies to drive your business forward, contact us today.

Posted by: Dr Steve Leven, Head of Advanced Technologies and Transformation | 02 May 2019

Tags: Digital Transformation, Finance, FSI, Insurance


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