Key Considerations for Successful Digital Transformation in Insurance and Finance

Despite these advances, more than 65% of enterprise-level organizations have experienced stalled or abandoned digital transformation efforts. Complex processes and multiple unstructured data inputs put insurance and finance at particular risk when it comes to digital transformation.

It is critical to understand emerging best practices so you can navigate the divide between digital transformation success and failure. That’s why we’ve compiled some of our most commonly asked questions with easy answers, so you get your digital transformation started right.

 

1. How do we start if this is our first business process automation project?

First, consider whether the business challenge that has prompted the discussion to explore automation requires a specific skill set that your team may not have. To succeed, you may need to find an experienced outside software services partner to help you fully understand the business problem. That way, you can identify what is practical to automate—and what the business can support. Ultimately, there are pieces of any solution that people must remain a part of.

Once those decisions are made, you can then go about selecting the right software tools and deciding whether you need to extend these tools to create any needed additional features. Along the way, don’t forget to consider issues like security, compliance, and life-cycle management.

 

2. How do we scale initial successes across the organization?

Following best practices provides the surest path to taking early digital transformation efforts to scale across your organization. To do so, you may need to overcome resistance from discrete parts of your company where “going it alone” outside normal IT practices has allowed a business unit or segment to automate some function or step of a process. That unit may not have stopped to consider how to handle issues that come into play when solutions go enterprise-wide and so may need to broaden their understandings of the key components of business process automation.

To increase success—and manage risk—in enterprise-wide efforts, first adopt a life-cycle approach centered on systems, processes, and people. Then make sure to:

• • Create the right culture—develop a philosophy regarding digital automation, including the understanding that mistakes will occur
  • Recognize life-cycle issues and that one-size doesn’t fit all
  • Know that you must ultimately develop an approach that works for your organization and culture. Yet you must make sure that what you create always includes tenets of the efforts encompassed in traditional technology deployment efforts
    
    

3. How can we anticipate and overcome risk for insurance and finance digital transformation?

Understanding the challenges that have already presented themselves for those attempting individual and enterprise-wide digital transformation efforts can help to both anticipate or avoid those challenges. Known challenges include:

Benefits Erosion

Over time, the cost of the deployment may not provide the return on the investment required to deploy the solution in the first place. Developing a more thorough understanding of the existing system and its stakeholders can result in a better alignment of investment to savings or return achieved.

Scaling up

Recognize the culture change that may have to take place as IT seeks to include best practices for governance and oversight on top of dispersed efforts led by business units previously unfamiliar with these considerations

Organizational readiness

Implementation of tools like RPA can have unintended consequences when deployed without a full understanding of the people and processes involved. Gearing up for automation often requires a broader system check and understanding of how both structured and unstructured data flow through the process, as well as where people have been added to overcome technical limitations.

 

4. How can an early recognition level of legal considerations help manage digital transformation risk?

 Even at the beginning of your digital transformation journey, it’s important to consider several legal questions to mitigate risk down the road. Topics to consider include:

Protecting confidentiality

Make sure to follow standard company practices regarding non-disclosure agreements, trade secrets, and the exchange of any other confidential or proprietary information when involving third parties in your digital transformation efforts.

Contracting protocols

Don’t let the excitement about promised outcomes override established procedures for defining and documenting agreements.

Intellectual property and licensing

Make sure you understand who owns what and for how long. You should also understand the terms of current licenses as well as anticipated renewals— and how each of those affects the support you receive from the provider.

Insurance coverage

Review current policies to verify that you have coverage for risks from digital workers, cyber-attacks, and other emerging technology risks.

Employer/Employee matters

As new technologies demand a new skill set from employees, competitors may wish to try and gain market share by poaching employees from within your organization. Manage the risk and costs associated with potential departures through appropriate, strong, defensible non-compete agreements. Further, protect proprietary information by considering how restricted access and delineated processes can help.

 

5. What are the Cybersecurity and Data Privacy issues with digital automation?

Cybersecurity

Because digital transformation technologies exponentially increase the surfaces available for cyber intrusions, cybersecurity protocols have increased importance. Managing the risk includes:

• • Asking what your vendor can do to help in the effort
  • Creating a governance scheme that intentionally separates IT—which creates value—from cybersecurity oversight
  • Valuing data properly by using access controls to protect private and sensitive data
  • Having a plan in place to address potential attacks
  • Knowing your insurance coverage

Data Privacy

Remember other jurisdictions have regulations that apply

• • HR Issues. Make sure any workforce changes that occur after automation do not have a disparate impact on any protected class of workers. Also, seek to demonstrate that any algorithms used for hiring don’t unintentionally discriminate.
  • Regulatory compliance. Don’t forget to consider applicable industry-specific and region-specific regulations that may apply as part of your overall governance of systems. In addition, keep your eye on emerging regulations, especially as automation begins to make its projected impact on the workforce and real-world workers.

 

6. How can the use of proven technologies help reduce digital transformation project risks?

Certain technologies are helping enterprise-scale automation efforts, many of which have significant track records and enterprise-level operational successes. These include:

OCR/CDA

Optical character recognition, or OCR, is the foundational technology that makes Cognitive Document Automation (CDA) happen. There are a variety of ways that these technologies understand the documents to help automate processes. These include sample training, machine learning at both design and runtime, image perfection capabilities, and separation algorithms.

Process Orchestration

Software that automates the management of business processes.

Analytics

Creation of statistics and other key metrics that offer visibility into defined processes and systems. This too is integrated into the platform.

 

7. How can digital transformation technologies add value?

Digital transformation technologies can create value at multiple points both for internal operations and external customer interactions. These include: 

Operational efficiency

Look for technologies that can support the diverse ways that information is acquired— from data streams to paper and mobile capture.

Customer intimacy and the customer experience

Business process automation solutions can support customer ease for onboarding and applications while improving metrics and driving value.

Information visibility

Process automation can acquire data from a variety of sources — including previously undocumented processes — to make information more useful and relevant.

 

Ready to start your digital transformation or have more questions? Our team of experts can help!