Data & Analytics: Are you making progress?

What are CIOs' Major Initiatives for 2020? What are the Key Technologies that are impacting CTOs' 2018 plans? How are cutting-edge technologies being applied as we brave the new world of fintech?

Three technologies that should not be overlooked:

  1. Social Media Intelligence
  2. Big Data Analytics
  3. Smart Robotics

From the CIO perspective…

  • Social Media is a means for creating new information.
  • Big Data is the new method for analysis of information.
  • Smart Robo is the platform of new information transfer & sharing method.

We believe that the possibility of disruption should be addressed in all adoptions.

Social Media Intelligence

For many people, social media intelligence or what others call social media listening, consists purely in screening social media platforms to get data that can complement internal data to make a better business decision.

Actually this definition is too short and does not include all key phases of a proper social media intelligence strategy.

At Celent we define social media intelligence as the strategy consisting in:

  1. Defining strategic objectives that are dependent not only on internal but external data.
  2. Defining a semantic scope or a group of topics, relevant social media platforms, and a geographic and language scope to be considered for the analysis.
  3. Filtering and analyzing social media data regularly (real time, daily, or monthly, but it is generally a continuous process).
  4. Implementing an action plan leveraging findings derived from the data analysis to achieve the strategic objectives initially defined.

Big Data Analytics

Since 2013, the results of ongoing Celent Survey have brought us many suggestions.

This figure shows the recent evolution of the insurance industry, as well as where we think it should be.

In 2013, Celent placed the target between practitioner and innovator. The survey in 2015 demonstrates that insurers have matched this level in the internal measures.

While 2015’s survey positions competitors ahead of last year’s, they have not matched the pace over the last two years. Similarly, survey respondents value customer expectations below their own investments, even though many digital leaders in insurance claim that insurers are compared to digital retailers and other services.

One BIG observation: The greatest shift has been the perceived benefit of data. This finding is consistent with what Celent has heard from the survey; even small data projects have demonstrated value and created a greater appetite for more information.

Smart Robotics

Once upon a time, a screwdriver was required to program a computer. It was used to install a new vacuum tube or remove a faulty one and pass electricity in the correct sequence to signal a zero or a one. Thanks to Moore’s Law, we have progressed exponentially since then.

However, until recently, IT professionals have continued to operate in the same programming paradigm: providing instructions to a computer requires that a human knows the solution to a problem before they began coding.

Advances in techniques such as artificial intelligence, machine learning, deep learning, and cognitive computing are challenging this convention. Using these tools, knowing the answer in advance is no longer required.

Celent views this shift as the next “Big Idea” in computing. We have labeled such a platform “The Aware Machine.” It combines multiple emerging technologies to solve problems once deemed too expensive, too complex, or just unknowable…

The Celent Aware Machine, displayed in the figure, is a conceptual representation of a platform which combines multiple technologies: artificial intelligence, machine learning, cognitive computing, and/or deep learning.

***

In this conference, I will focus on Social Media Intelligence, Big Data Analytics, and Smart Robotics, which are three major emerging technologies that are rapidly being adopted in the Financial Services Industry.

By participating in my session, you will understand the trend of modernization in Data & Analytics and how to introduce these three important technologies in various segments of the Insurance Industry.

In this conference, we will also discuss the impact of using AI and how to utilize this technology in Claims Management and Insurance Fraud.

Asia Conference on Claims Management and Insurance Fraud

13-14 Jun 2017, Mandarin Orchard Hotel, Singapore

Theme: "Managing Claims & Combatting Fraud as Strategic Tools for Success in the Era of Disruptive Innovation"

***

Recommendation: Related Celent Reports

Social Media Intelligence in Insurance by Nicolas Michellod

Bigger Data: A Look at How Far Insurers Have Moved to Take Advantage of Opportunities by Craig Beattie, Nicolas Michellod

Machine Intelligence in Insurance: Designing the Aware Machine by Craig Beattie, Michael Fitzgerald

 

DIGITAL TRANSFORMATION OF THE BANKING INDUSTRY, Part 3

  (Source: East Japan Railway Company)

Leverage Digital Technology

In the banking sector, players should strive to become trailblazing purveyors of financial services that leverage digital technology.

There are areas in the banking services value chain where firms should work independently to generate unique, in-house, high-value-added services and products; there are also areas where banks stand to benefit by collaborating with other firms to drive down costs. Also, firms should consider collaborating with other firms to leverage economies of scale and economies of scope, parlaying cost centers into new profit centers, and securing a role in the industry infrastructure.

In actual operation, after deliberating and implementing such initiatives, big-data analytics and the automation of all processes will prove the most important. Here as well, a shift to a modular supply structure will be required, and a critical factor in determining the success of financial institution management will be alliances — namely, how adroitly firms partner with other entities.

In Conclusion

Celent offers the three points below as food for thought and policy prescriptions for modernization in the banking industry.

1. Technology as a driver of growth:

  • Look for ways to pioneer new segments through the use of technology without fixating on the segments that have been your bread and butter up to this point.
  • For example, robo-advisors can be used not only for mutual fund but also for insurance products sales to retail customers. Bancassurance and alternative distribution channels should also be driven by robo-advisors.

2. Vertical disintegration:

  • Prioritize finding the sweet spot for cost and risk and revisit and rethink your processes (such as vertical integration and/or internalization, and the use of horizontal division of labor and/or outsourcing) across the board.
  • For example, enhancing the agility of new payment product research and development might be achieved by vertical disintegration of banking business into payment services discovery, development, and marketing organizations.

3. Industry-wide priorities:

  • Place top priority on initiatives to raise financial and IT literacy among customers.
  • Actively seek to leverage monetary policy and system reform as business opportunities; avoid a passive approach to system reform.
  • Rebuild the industry value chain through methods of modularization, specialization, and integration.

Legacy modernization in the banking industry is much more than simply the application of novel technology. Rather, it portends nothing less than a structural overhaul of the banking industry, an opportunity to envisage anew and redefine the industry’s future. There can be no doubt that this transcends the mere establishment of a digital channel; rather it will certainly impact products, services, IT units, and sourcing models, and, in so doing, provide the banking service providers of the future a chance to seriously consider exactly what kind of companies they would like to be and the corporate cultures they would like to foster.

Celent perceives legacy modernization in the banking industry as instigating change at a fundamental level, in both business execution and organizational structure. Moreover, this transformation promises to have legs and vast implications that will play out over the long haul. Legacy modernization is much more than just new technology and it will have sweeping implications.

 

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Related releases:

Legacy Modernization in the Japanese Banking Industry, Part 1

Legacy Modernization in the Japanese Banking Industry, Part 2

 

Telematics Car Insurance Services Company

TOYOTA

Aioi Nissay Dowa Insurance Co., Ltd. (AD), Toyota Financial Services Corporation (TFS) and Toyota Motor Corporation (TMC) announced on April 13th that their respective U.S. subsidiaries have established a jointly owned telematics car insurance services company, Toyota Insurance Management Solutions USA, LLC (TIMS).

The aim of establishing the new company is to contribute―from the point of automobile insurance―to the achievement of their vision of a mobile society that is safe, secure and convenient. I'm quite sure that it will have a great impact both on the insurers and the automobile manufacturers. (*1)

Global Telematics (and telematics insurance) industry map, now consists of these three layers: (*2)

  1. Generate the data, and transmit
  2. Accumulates the data, analysis, and sell
  3. Use the data in a variety of applications

Accumulators on the cloud include data analytics vendors and public sector companies like the Credit Bureau. They are facing challenges in exchange services. Among many data users, there are the traditional insurance companies including car insurance, life insurance, and medical insurance, as well as the emerging InsurTech companies. (*3)

 

(*1) New Telematics Car Insurance Services Company to be Launched in U.S.

http://newsroom.toyota.co.jp/en/detail/11775458/

(*2) Insurers and the Internet of Things

http://bit.ly/1pWpizL

(*3) Telematics and Japanese Insurer Business Strategies

http://bit.ly/1WBzquI

テレマティクス自動車保険サービス会社

米国におけるテレマティクス自動車保険サービス会社設立がプレスリリースされました。

成熟し競争の激しい市場において、単なる研究開発に留まらず、実ビジネスを進める日系最大手自動車メーカーと保険会社による今回の挑戦は、新たな経験と大きな成果をもたらし、日本の各業界にも大きなインパクトをもたらすものと確信します。(*1)

先進市場においては既に、IoTデータの①発信②蓄積/分析/販売③活用、といった3階層のサービス分離(モジュール化)が進んでいます。FinTechの取り組みにおいても上記3分野で、新たなサービス事業が誕生しています。(*2)

このような背景の下、今後は、②IoTデータの蓄積/分析/販売による『自動車運転情報のサービスビューロー』となりえたものが成功の鍵を握ると考えます。クレジットカードやローンの審査時に参照する『クレジットヒストリー』と同様に、保険の引受審査時に『安全運転履歴』や『健康管理履歴』が活用される時代の到来を予期します。(*3) (*4)

 

(*1) 米国でテレマティクス自動車保険サービス会社を設立

http://newsroom.toyota.co.jp/jp/detail/11775445/

(*2) IoT時代の保険会社

http://bit.ly/1kbM43L

(*3) テレマティクス保険と、日本の保険会社の事業戦略

http://bit.ly/1Cn0j8f

(*4) テレマティクスの業界地図

http://bit.ly/1SlDLSu

 

クラウド第2幕

大手金融機関グループにおける、包括的なITソーシング契約が発表された。こうした取り組みが続くことで、レガシーなシステム基盤が現代化されるだけでなく、レガシーなビジネスモデルは完全に淘汰されるであろう。

IaaSとPaaSのクラウドシステム基盤と、ハイブリッドに連携するSaaS、ビックデータ・アナリティクスやIoT、AIなどの新サービスが、レガシーの現代化だけでなく、イノベーティブな新ビジネスのインキュベーターとなる。そしてその先には、APIの解放からオープンイノベーションの扉が開く。

汎用的なITゼネコンにとって、恐ろしい時代となった。こうした取り組みは、日本のSIベンダー各社には、大きな警鐘と聞こえるはずだ。一方で、尖鋭的なアプリケーションベンダーは、迅速にその採用を決めた。そして、ローレイテンシーな世界でも、イノベーションへの環境を整えてゆく。

破壊的なテクノロジーは、既に、身近に存在する。イノベーションへの河を渡るためには、その動機と革新を恐れない勇気が必要だ。ITは、もはやイノベーションのバリアではない。明らかにドライバーである。

2016年は、「クラウドファースト」から「イノベーションファースト」へ、クラウドの第2幕が開く。