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Insurers Worldwide See Opportunity in Technology Innovation FIS Survey
November 17, 2016
- Insurers worldwide believe new technologies and innovations provide the industry significant opportunities for managing compliance and risk, as well as improving efficiency and service.
- Insurers say they expect to make the greatest investments in technologies that boost customer experience.
- Innovations in cloud, cross-company communications and increased connectivity with customers will allow insurers to tailor products more closely to their customers’ needs and preferences – while simultaneously managing risk more effectively.
JACKSONVILLE, Fla., Nov. 17, 2016 – Insurers worldwide see technology and innovation as an opportunity to achieve compliance, manage risk, and improve efficiency and service. That’s according to a new study by FIS™ (NYSE: FIS), a global leader in financial services technology, which reviewed 500 companies across 80 countries and five continents.
The survey found nearly 80 percent of insurance companies agree or strongly agree that their businesses need to innovate in response to key business challenges – mainly to boost customer satisfaction and increase competitive advantage. However, nearly all respondents said they face obstacles in delivering innovation.
Innovation is a Must
Respondents to the survey cited the risks of slowed growth and lower returns as reasons why they must innovate, even saying that failure to innovate may be seen as not caring about customers’ interests.
For that reason, most companies expect to see the greatest increases in technology investment to come in the area of customer experience over the next three years. In fact, respondents said they are most interested in consumer technology trends, such as mobile and wearable technologies, as opposed to business-focused advancements, like blockchain, trading technology or even cybersecurity.
“Harnessing the power of digital technology will benefit insurers of any size,” said Marianne Brown, chief operating officer, Institutional and Wholesale, FIS. “From overcoming legacy systems and cultural divisions to creating the secure framework that makes storing and analyzing big data possible, technology does more than simply allow insurers to keep up with the times. It also streamlines services by improving collaboration amongst the various teams within a company. Even better, it allows them to deepen relationships with customers through easier customer access as well as better understanding each customer’s individual needs.”
What’s in the Way of Innovation
Insurers who took part in the FIS survey admit that they have traditionally avoided technology and innovation, and they cite that as a major reason why they have been slower to innovate than the rest of the financial services industry. But that’s far from the only obstacle stopping innovation. In fact, 99.6 percent of respondents said they face obstacles, including.
- Nearly three-quarters of respondents said complexity of legacy IT systems prevents innovation.
- More than half of firms cited inadequate planning and financial or resourcing constraints.
- 45 percent cited ineffective organizational structure.
What Innovation Will Look Like
More and more insurers are considering the cloud as a way to more easily and cost-effectively host and access the vast amounts of data they possess, according to survey respondents. While fewer than 30 percent of respondents already have undertaken cloud projects, more than another third are discussing or actively planning such innovation. Some respondents cited the cost of cloud and managed services for their ability to reduce costs and provide premium benefits to policy holders; another said: “The accommodation of large data sets, highly demanding algorithms and the hardware for instant computational resources make the cloud ideal for large-scale data analysis.”
With new accounting regulations, such as Solvency II and IFRS 17, coming, more insurers are looking to jumpstart collaboration efforts across their firms. One respondent said, “The future of collaboration will be driven by technology and advanced systems that will bring departments closer together.”
Perhaps the greatest result of innovation, however, will be increased connectivity with customers. Insurers are rich in data, which gives them valuable opportunities to improve customer service and gain competitive advantage. Survey respondents felt exactly this way, noting that technology can make data “accessible to the right people in the right way,” according to one survey-taker.
In other words, by improving inter-departmental relationships, insurers can tailor products more closely to their customers’ needs and preferences – while simultaneously managing risk more effectively.
Click here to read the full report.
FIS is a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions. Through the depth and breadth of our solutions portfolio, global capabilities and domain expertise, FIS serves more than 20,000 clients in over 130 countries. Headquartered in Jacksonville, Fla., FIS employs more than 55,000 people worldwide and holds leadership positions in payment processing, financial software and banking solutions. Providing software, services and outsourcing of the technology that empowers the financial world, FIS is a Fortune 500 company and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
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