Strategic advice to leverage new technologies
Technology is at the heart of nearly every enterprise, enabling new business models and strategies, and serving as the catalyst to industry convergence. Leveraging the right technology can improve business outcomes, providing intelligence and insights that help you make more informed and accurate decisions. From finding patterns in data through data science, to curating relevant insights with data analytics, to the predictive abilities and innumerable applications of AI, to solving challenging business problems with ML, NLP, and knowledge graphs, technology has brought decision-making to a more intelligent level. Keep pace with the technology trends, opportunities, applications, and real-world use cases that will move your organization closer to its transformation and business goals.
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The digital revolution has hit the insurance sector, with insurtech disrupting the entire value chain and customer lifecycle. New technology offers opportunities to redesign the customer experience, design new products and services, streamline processes, and increase effectiveness. The opportunities are huge; hence, they attract financial technology startups and drive investment. Accenture reports that in 2015, insurtech attracted approximately US $2.6 billion in investment, up from $800 million in 2014. According to CB Insights, $1 billion has been invested in insurtech in the first half of 2016, and there are over 1,300 startups in the insurtech space worldwide.
Not surprisingly, this amount of investment impacts the traditional insurers, and according to a PwC study, almost half (48%) of insurers fear that up to 20% of their business could be lost to standalone fintech companies within the next five years.
In this article, I will address the causes of this digital revolution, the most important trends disrupting the insurance industry, and ways that incumbents can harness the insurtech trends and respond to them.
Blockchain is most simply defined as “the first native digital medium for value, just as the Internet was the first native digital medium for information.” Blockchain has gained great attention, investment, and development because it addresses two of the riskiest aspects of life and business on the Internet: transactions and trust. We’ve long recognized the security, privacy, and trust issues that plague the Internet, and since the early 1980s technologists have been working on a solution. For transactions, intermediaries have made possible the trust and security needed to complete transactions and until now have been the best method for completing transactions with trust. However, as we know, security has unfortunately been a weak point, with data breaches leaving individuals’ personal and financial information vulnerable and putting trust at risk.
Digital transformation and technological innovation are reshaping the financial services sector. Today the sector is confronted with both large, established tech companies like Apple, Google, Amazon, and Facebook and small fintech startups that are moving into the financial services space. From a sector perspective, it is clear that a lot of the innovations focus on disintermediating the incumbent organizations. There is a clear move toward more decentralization and peer-to-peer (P2P) collaboration. Blockchain technology enables value transfers through a decentralized, P2P consensus process. International money transfers are drastically improved using P2P operating models, new P2P insurance solutions are created, and both lending and capital raising now take place on P2P platforms.
We hope the articles in this issue of CBTJ will advance the state of the knowledge for all readers, regardless ofyour specific area of interest in fintech. Whether youwish to gain an overview of the emerging fintech themes, broaden your knowledge of blockchain technology, or understand the impact these technologies arehaving on the insurance and payments industries, there are learnings for you here as you continue on yourfintech journey.
Against the background of an evolving digital society, disruptive new concepts in information technology emerge. Cloud, big data, mobility, and social media are just a few of these technologies. Each is disruptive on its own, but as they converge and reinforce each other, the disruption is compounded. This is the new style of IT: the combination of these technologies, forcing organizations to rethink how IT is delivered and, more importantly, how IT is consumed to deliver business value.
In this Advisor, I look at some key issues organizations should consider that could potentially hinder their adoption of cognitive advisory and decision support systems as well as the continued growth of cognitive computing in general.
Optimize your Big Data investments, decision making, and performance.
When we look at an organization as a whole and ask ourselves where we can make the biggest improvement, it’s probably not in the development process. If the developers are using Agile, they have already made gains simply by adopting the time box. There are certainly things that can be improved, but I would argue that the real opportunity for improvement lies in the remainder of the organization that is often operating with little or no observable process at all.