How to be a critical influencer and change champion

The smart CIO will ensure that a right balance is struck between the various priorities and initiatives picked up for the short and long term. New tech will unveil the greatest capability in the hands of the CIO to take on the challenges of the future, feels Ajay Vernekar, Chief Information Officer, SBI Life Insurance Co. Ltd.

What is the role of the CIO in the BFSI sector and how has this role evolved?

Today’s role of the CIO is an invaluable seat in the board room, a critical influencer—a change champion. In the past few decades, the importance of the IT function has undergone a radical change. The past had seen IT Head’s, as mere service providers playing an operational role of implementing business requirements. The task was largely limited to creating the technical implementation plan and keeping a track of various projects along with the IT teams and vendors. The CIO was most often not part of any business decisions, or any strategic or annual plans decided by the company, and there was practically little or no opportunity to contribute to the tasks impacting outside IT functions.

With the rapid development in technology and with the advent of powerful technology tools like the cloud, AI, mobility, analytics, robotics automation etc. coming to mainstream, there is much more capability in the hands of organisations. We have seen the BFSI industry evolve and shift towards online with real time transactions for fulfilment across all the segments. We have also seen how banks have turned digital, and customers can transact online sitting in the luxury of their homes for almost everything. Just a few decades back, one would never have imagined services like – Loan and insurance cover in minutes, trading in real time—buying and selling of equity/commodities/forex etc. Even receiving your claims, reimbursements and maturity of fixed deposits or any credits can hit your bank accounts instantly. This paradigm shift has forced the industry to reset and review their distribution channels and business models. This has inherently put more demand on technology, and we should all take pride to embrace a great opportunity to adopt technology at a rapid pace to transform the entire industry.

Life insurers are going to utilize data insights and increase the modes of touchpoints to create a multi-dimensional shift in customer engagement and increase the effectiveness of agents and advisors.

Furthermore, due to fierce competition, and changes in external—political, economic factors, there is always constant pressures and substantial impact on business. There is a need to constantly look at sharper and effective plans to improve the company’s balance sheets. Hence the CIO’s role has changed to bring more focus in organisations to continuously explore and adopt technology in various ways and drive the business objective with technology. The current CIO apart from having a complete handle on the tech, also needs to be aware on the external factors impacting his company and industry. This helps the CIO to look for the most appropriate tech solution that can be evaluated and implemented. There is so much of tech buzz and choice of many today, hence it is to a great extent critical to make the right choice—be it selecting what to work on and which platform/solution to pick or even what tech to bet on for the industry. The decisions taken by the CIO are both immediate/short term and some longer term to keep a watch on. The need of the hour is to be there and be ready with the right solution when the time is right. This is easier said than done because with multiple priorities it becomes a challenge to juggle priorities. The smart CIO will ensure that a right balance is struck between the various priorities and initiatives picked up for short term and long term. The power of new tech will unveil the greatest capability in the hands of the CIO to take on the challenges of the future.

What are all the changes that have taken place in the insurance sector as a result of the pandemic?

Like every business, every organisation has undergone a shift of approach to having more confidence on technology and more acceptance of uncertainties. Companies have implemented far more digital tools and capabilities in their organisations than before the pandemic. We have seen how the remote work culture and work from home tools have seen a massive adoption, and most businesses are now catering to digital modes of interactions and servicing of customers. Customers have also adapted to this new normal of interactions and realised that there is merit in this. In the past few years, how often have we visited our bank branches or even any office for a financial product purchase or service? In fact, today across all ages and gender, customers are doing pretty much everything online using their portals or digital modes. This is a big shift that has come to the consumer. Hence this has resulted in a very fast pace of digitization, converting all physical modes to remote digital. Not that the physical branches are all closing however we are seeing additional modes of communication and interactions with our customers evolving. There is still a good set of customers who prefer to visit the physical branches though and hence I believe the physical touch points will continue to thrive, however maybe not as much as it was before. We are now seeing a phygital world—digital twins being adopted across the industry.

Further we have seen with the advent of so many enablers like Digital KYC, Aadhaar, digital payments, etc. the speeds and ease at which we can on board customers and agents is become much faster. The process that would take weeks is now in days or even on the same day. Even when servicing the customer, we can implement updates almost real time that used to take far longer in the past. The most important aspect—the moment of truth for the policy holder is to get the claims cleared fastest. This has been made possible only with technology where a claim can be assessed, checked, verified and cleared with speed and credited to the bank account of the nominee the same day. This has reinforced the purpose of even buying an insurance policy. After the pandemic, consumers have realised that life is full of uncertainties and hence it is only wise to purchase appropriate cover to safeguard our lifestyles and support the dependent members in any unforeseen event of the bread earner.

With the advent of ChatGPT, how will AI bring about a change in the insurance sector? How will it affect the business?

One such tool that is really shown a major promise is ChatGPT. However, one could think this is only a hype and believe that technologies like these will come and go – but this one is here to stay. We must not go with the hype simply. While there is no doubt on the power of such tools, it is important to assess how it serves the purpose or for that matter all other tools fit into our purpose. AI is definitely bringing the ability to process massive data sets that each of the organisations or industry generates today. The ability to analyse these massive sets of data as well as with the speed required to process the same is beyond any human. Hence technologies like AI will surely find place anywhere. ChatGPT models have again proved that complex and powerful tech can be made useful to almost any type of problem or situations. That’s the reason users have loved its outcome and amazed to see how simple it can be to get answers to their queries. The simplicity and ease have attracted businesses and in particular insurance companies to ask and get answers to many queries. Right from the consumer to know the different types of insurance products to getting to know the process, exclusions, terms etc. Even for organisations to know the queries related to users it is useful that could help companies do their assessments and process customer requests much faster.

Such tools will definitely create an altogether new approach of getting answers and solutions. This will redefine how applications and solutions are deployed in the organisation. As any powerful tool can disrupt the standard traditional process, it will probably also question some of the traditional ways of analytics and enterprise applications to transform these in the next couple of years… definitely earlier than we can imagine.

What about issues like security, data privacy and data localization?

In an era marked by relentless cyber threats and expanding attacks, the importance of a robust cybersecurity posture is absolutely essential. Information security is that the core of any solution and is not to be ignored. Whatever is the technology, security is the basic pre-requisite to even implement a suitable business use case. I would be confident that with advancement of the security tools this can be easily achieved. We have seen use of AI even in providing better insights and analysis of the security of the solutions. Integration of AI within the security framework has led to ground- breaking transformation in incident management. As organisations try to grapple with the challenge of safeguarding their digital assets, I believe the power of AI can help them secure their landscape for the future.

Data privacy is one area that will surely need to be considered while using the consumer data that is especially in the public domain. This is going to be a challenge for AI and ChatGPT as the greater the data processed, the model will give better results. Limited data inputs might reduce the effectiveness of the tools. Having said the above it is absolutely necessary to safeguard the customer data usage. I am sure technology will come up with a better solution to work around this problem as well.

I would believe the benefits and outcomes expected from these tools will be too high to discourage any one from using it irrespective, even after the constraints from data privacy and security.

What are the future trends in the insurance sector both short terms and long term?

The usage of technology and use cases are pretty much standardised across all insurance companies. For example, automation and digitisation has been a common theme and almost all insurance companies have done this. The first priority for any sector is improving efficiency to bring digitisation and automation across all process in the company. This helped in bring costs in control and improving productivity of the systems. On a longer term there are huge opportunities in the sector. The next 10 years will see penetration of technologies such AI and data analytics to enable it. However, these is still unique opportunities to give a customer superior experience with better product differentiation and better journey to the customer through the entire life cycle the customer is with the insurers.

Customers will look at more pay as use services and embedded buying and servicing for even insurance.

Life insurers are going to utilize data insights and increase the modes of touchpoints to create a multi-dimensional shift in customer engagement and increase the effectiveness of agents and advisors.

New tech offers a huge opportunity to lay the foundation for much needed innovation in products, services and business models. We have seen how embedding products in customer journeys bundled with enticing offerings attract the consumers and hence grow the industry.

Also, with the low penetration rate of life insurance there is a huge opportunity to reach out to more segments and catch-up with other neighbouring industry sectors like banking, investment and health. Insurers must fully embrace the digital future by leveraging the power of digital technologies, data and responsible AI for product offerings, pricing and customer engagement. The digital world will reward those who can innovate and adapt quickly.

(This article appeared in Dataquest print edition September 2023, based on email inputs received by the author)

sunilr@cybermedia.co.in