Usually, I write about one topic when I do my blog posts.
However, because this blog is about promoting the advantages that technology presents to us in our daily life, I thought I would share a few press releases with you that I received about how technology benefits specific industries.
Collaboration is key
Following a challenging 2017, the South African insurance industry must adopt technology and collaborate with local governments, if it is to effectively tap into new markets to stimulate growth for the foreseeable future.
Many sectors have been very quick in adopting new technology, like the financial services industry, who have been at the forefront of technological innovation. It is time the insurance sector does the same.
“Luckily, we have seen certain pockets in the insurance industry follow suit, such as Lemonade, who launched an AI claims bot. It has the potential to investigate and approve a personal lines claim in a record, yes wait for it, 3 seconds! This is a giant leap for the insurance industry. Proper use of technology will vastly improve customer experience. It will also allow insurers to properly assess a client’s exposure, underwrite and price it appropriately,” said WP Pienaar, Chief Underwriting Officer: Commercial and Agri Assets at Old Mutual Insure.
To stay relevant, insurers must adopt technology and redefine their market. According to the Automobile Association (AA) between 65% and 70% of the 11,4 million vehicles on the road are uninsured. Why is this? Simply put, a vast number of South Africans can’t afford insurance. Our industry needs a concerted effort to provide every single South African access to affordable insurance.
This won’t be easy. The industry faces many challenges in 2018 which needs to be attended to. They are:
Changes in regulation
There are many expected changes to local regulation that will have significant effects on the insurance industry. These include the Retail Distribution Review (RDR), Policy Protection Rules (PPR), Protection of Personal Information (PoPI) and Treating Customers Fairly (TCF).
Much has been said about these changes, suffice to say Insurers need to properly understand the impact of these changes and ensure they have systems and processes in place to properly manage these changes.
The effects of Climate Change
Insurers need to prepare for more frequent and more severe weather incidents. This could be as varied as more severe hailstorms in certain regions and more droughts in other. Insurers need to properly understand the impact of these changes, for example, extended droughts also mean that fixed firefighting systems may not work properly anymore.
Staying ahead of technological innovation
Technology is a key enabler for insurers. Robotics could reduce time spend on mundane tasks and artificial intelligence could enhance decision making, but at the same time, cybercrime is on the rise. Insurers struggle to come to grips with technology that is developing faster than they can cope; drones, cybercrime and driverless cars are just a few developments insurers need to internalise and understand.
There are indications that millennials now outnumber other working generations. However, there are very few insurance products that actually cater to their needs. The way insurance is sold, is also not fully aligned with their needs.
The retention of technical skills
The insurance industry has been losing its technical skills at a rapid pace. Very few people leaving school choose insurance as a career. The lack of skills has a negative impact on customer experience and will result in increased premiums as risks are not properly assessed and mitigated. The industry will have to introduce accelerated learning programmes to ensure we build the skills the industry needs.
Collaboration for future success
Besides the many challenges, the insurance industry is well positioned to better predict, anticipate and adapt their approach to the dangers of climate change. Insurers should partner with local government to firstly get an appreciation of the level of accumulation and secondly to prepare an integrated and holistic disaster management strategy.
“By doing this, the damage caused by localised flooding can be managed if the exposure is understood and development of new property in flood zones and high-risk flood areas is carefully managed or discouraged,” said WP Pienaar, Chief Underwriting Officer: Commercial and Agri Assets at Old Mutual Insure.
Cloud storage is key
Data management and backup is one of the biggest IT challenges facing small accounting and bookkeeping firms today. Lacking the big budgets of larger companies, these businesses have less to spend on data storage, backup and protection and often resort to storing files on their laptops or, at best, an external hard drive or two.
However, accounting and bookkeeping firms – no matter how small – are usually responsible for the safekeeping of confidential information, such as client financial records, invoices and account information. They are also typically required to keep this data on hand for a specific period of time, with five years being the norm.
“Some businesses choose not to have a back-up at all, however this is a risky move in a business driven by accurate record keeping and reputation. If a bookkeeper’s laptop houses their only copy of a client’s data, and it is stolen, broken or infected with a virus, the damage can be catastrophic. They risk their reputation by explaining to a client that they no longer have their data and, in the unlikely event that they remain in their client’s employ, they also lose valuable time in redoing work and recapturing information. It is never wise to not have any form of backup whatsoever,” said Iniel Dreyer, Managing Director at Gabsten Technologies.
Firms always have the option of working from the clients’ premises, never removing client data from site and only working with it to carry out their task. However, this is rarely the case for any business with more than a single client, and these firms are usually given all of their client’s financial records to keep. For this reason, it is critical that these businesses look at ways to store and protect their client’s data.
External drives containing backup copies of data provide some measure of protection, especially if they are stored off-site and separately from the laptops or devices used to process the data. Unfortunately, they are not infallible, and can be misplaced, over-written or damaged, resulting in lost data.
Legislation like the Protection of Personal Information (PoPI) Act in South Africa and General Data Protection Regulation (GDPR) in the European Union, demand that third party personal information, such as the records which bookkeepers hold, be protected in accordance with the guidelines they set out; failure of which to meet these can result in severe financial penalties which small businesses are rarely able to survive.
Beyond regulatory requirements, bookkeepers and accountants need to be able to establish and maintain a credible reputation with their clients. Financial information handling is a business built on trust, therefore it’s critical that these businesses engender the trust of their clients by being able to prove their ability to appropriately protect and store the data that their clients give them.
Cloud to the rescue
“Cloud backup and protection solutions enable businesses like small accounting and bookkeeping firms to cost effectively store, backup and protect their clients’ data at a monthly cost. This gives them peace of mind that the data they are working with is not only available any time, should it be required, but is also secured in accordance with regulatory requirements,” said Iniel Dreyer, Managing Director at Gabsten Technologies.
Cloud storage, backup and protection services are typically offered as a monthly service, allowing businesses to only pay for the amount of storage they need, increasing or reducing it as required. This gives them scalability and security without having to fork out large capital investments in infrastructure and security software.
Despite cloud’s relatively low-cost base and obvious benefits, small accounting and bookkeeping firms are often still hesitant, whether because they are unaware of the need to retain and protect their clients’ data, or because it’s not their core focus and, thus, considered an excessive expense.
While data storage, backup and protection may not be the main focus of these businesses, it certainly is a value-added service they can offer to their clients. Bookkeepers and accountants can offer this as additional service as a part of their revenue stream with little to no effort on their part. There may well be clients who choose not to opt in on data storage and protection, but accounting firms can take comfort in knowing that they have, at least, made their clients aware of the dangers.
Ethics at the heart
Artificial Intelligence (AI) and machine learning (ML) are more than trendy or futuristic topics – they are real computing advances that are playing out in homes and businesses today.
In simple terms, AI is a machine’s ability to reason, and make decisions based on that reasoning, in similar ways to human beings. AI systems learn and evolve over time, so in theory AI can improve itself; the software becomes the software developer.
“This creates the potential for exponential gains in analytical and automated processes through AI. Because of this we stand at a critical juncture in the AI journey – a moment in time where we get to define not just what AI can do, but how it does it,” said Zoaib Hoosen, MD: Microsoft.
Boosting productivity and unlocking growth
As it goes mainstream – thanks to the cloud, deep learning, and big data – AI will boost productivity and unlock economic growth.
“It will transform the workplace, and change the shape, look and feel of many industries including health, transport, manufacturing, and more. But for some, the rise of AI conjures images from the Terminator films or WestWorld TV series. In these stories, humans are at the mercy of these faster, stronger, smarter systems with no ethical hang-ups. These narratives are clear on the problem with AI as they imagine it: no humanity, no heart,” said Zoaib Hoosen, MD: Microsoft.
We need a find a way to achieve this or else AI will accomplish nothing.