The insurance industry in Australia exists in a complex regulatory environment. At the same time, insurers face the technological challenges of digital transformation, legacy system integration, data management, cyber security threats, and adapting to emerging technologies. In all this complexity, what is the key to successful digital transformation?
Regulatory compliance and the technology that supports it
Compliance is changing in response to technological leaps forward. In 2019, the Australian Securities and Investment Commission (ASIC) said that the regtech (regulatory technology) sector “has enormous potential to help organisations build a culture of compliance, identify learning opportunities, and save time and money relating to regulatory matters”.
The regulator has supported initiatives like machine learning monitoring of responsible lending obligations by credit providers, delivered a report on digital record-keeping of financial services, showcased the benefits of structured financial information and tested the prototype licensing chatbot.
As the regulatory landscape shifts to meet new technologies, insurers will benefit most if they integrate regulatory compliance into digital transformation initiatives from the start.
In addition to these regtech and compliance considerations, at 9Yards we consistently find insurers who maintain a focus on the following key areas will reap the benefits as they move forward along the digital transformation journey.
Embrace a digital culture
If your entire insurance organisation is along for the digital journey, you’ll find that innovation, adaptability, and a customer-centric focus follow.
Embracing a digital culture means more than just upgrading technology. There can be resistance to change because digital transformation involves a shift in the way business is done.
Foster an environment that encourages employees to embrace technology as a tool that enhances their roles and simplifies processes.
Prioritise cyber security
Cyber security threats and insurance fraud continue to be major concerns in the insurance sector.
We’re also seeing that cyber security professionals are hard to find, with 5 categories of cyber security professionals in short supply in Australia according to Jobs and Skills Australia
CISOs working in the insurance sector need to invest in robust cyber security measures, including working with cyber security experts to identify and mitigate risks.
It’s also important to educate employees and customers about potential IT and cyber security risks. When people understand and recognise cyber threats like malware, phishing, data leaks, hacking and even insider threats, detection and prevention become more likely.
Modernise legacy systems
Legacy systems generally carry significant technical debt and security debt. While insurers recognise the need to upgrade, integrate and even replace legacy systems that are no longer meeting the needs of the business, modernising can be a daunting task. Daunting but not insurmountable. It simply requires careful planning, including a well-designed target state, and a technical roadmap to get there.
Adapt to emerging technologies
Staying ahead in our constantly changing technology landscape means insurers need to be willing to adopt and adapt to emerging technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT). These are the technologies that allow organisations to automate processes, enhance underwriting accuracy, and provide more personalised customer experiences.
Adopt a customer-centric approach
One of the most crucial aspects of successful digital transformation in the insurance sector is to take on a customer-centric approach. Customers want a seamless, user-friendly experience that meets their expectations of security, responsiveness and 24/7 access.
To be competitive, insurers need to provide options for digital self-service, streamlined online claims processes, and even personalised product recommendations.
However it’s never as straightforward as adding an online form or developing an app. A customer focus also needs to consider the cost and timeframes of integrations with the core technology and legacy systems.
Data analytics and data management
Continuous progress in data availability and technology to support data analytics and data management means that insurers have more access than ever before to insights into customer behaviour, risk assessment, and market trends.
The benefits of using advanced data analytics extend across the entire business for insurers, including more informed decision making, improved product development, and streamlined customer service.
Well-structured data, integrated data flows and secure data management processes are key considerations for insurers wanting to tap the data powerhouse.
Collaboration and partnerships
With all these complexities at play, it’s important to tap into external expertise and resources to help you achieve your insurance fund’s digital transformation goals.
After all, in a constantly shifting landscape, it’s easy to miss opportunities and / or inadvertently create future risk. The 9Yards team brings strategic expertise, and solutions that meet your unique needs, while understanding the broader insurance sector.
Contact the 9Yards digital transformation consultants to talk about how they can help you navigate the compliance and technology landscape on your digital transformational journey.
