The UK regulator, the Financial Conduct Authority, defines operational resilience as the ability of businesses, financial market infrastructures and the financial sector as a whole to prevent, adapt, react, recover from and learn from operational disruptions, such as business continuity on a larger scale. events which may include a major IT outage, loss of access to premises or a global pandemic.
Low code can act as an enabler of operational resiliency and bring efficiency to the insurance industry, reducing underwriting costs, automating manual processes, reducing processing time and support costs.
Companies in the UK financial sector will have no choice but to focus on operational resilience as new regulatory requirements come into force this year.
By March 31, 2022, UK financial services companies must have identified their material business services, impact tolerances and maximum tolerance for disruption. And by March 31, 2025, they must have mapped and tested these important business services and made the necessary investments to allow them to operate consistently within their impact tolerances.
But how will companies handle this? And what investments do they need to make to ensure they operate within those tolerances?
We all know the historical issues that plague the insurance industry: legacy systems, the cost of system upgrades, and an aversion to change when it comes to transforming and redesigning complex processes and technologies. Together, they make operational resilience a challenge to implement.
There has long been a demand in the insurance industry for streamlining data processing and reducing operational expenses. However, finding solutions that meet the needs of an ever-changing market is difficult, and companies want to see results from automation in months, not years.
One solution to consider is so-called “low-code” tools, which have evolved in recent years and have the potential to help companies support their operational resilience ambitions.
For those who have never encountered them before, low-code and no-code are tools for non-professional digital developers and provide a way to build applications – using visual programming techniques – without the need for lines significant amounts of handwritten code. . It can be vendor-supported or used internally to accelerate a company’s digital transformation, and the return on investment can be as short as three months.
The rise of low-code/no-code solution providers is making automation accessible to insurance companies, with Gartner predicting that by 2025, 70% of new applications developed by enterprises will use low-code or no-code technologies. coded.
The cost of implementation is low because these solutions do not seek to replace legacy systems but support the broader ecosystem to give businesses the right applications to handle the right tasks. Low code allows you to develop a solution quickly. You can also fail quickly, tweak and tweak it, so that it is right for your problem and can support your continuous improvement process ambitions. It’s component-based, so you can build for one solution and reuse the same module in another solution, allowing you to speed up delivery and make adjustments and improvements as needed.
Low code also makes it easier for more people to get involved in the business process redesign process, so there is much less dependency on developers and an ability to build processes faster. with the direct participation of those affected by the changes. Having subject matter experts directly involved in visual programming and being able to quickly see the result as a system reduces the risk of developers misunderstanding requirements and enables issues to be resolved at the stage. of development.
Operational resilience is enhanced by the ability to digitize a process, reducing the need to have people in a prescribed location, freeing them to focus on human interaction and higher value tasks. Low-code platforms make it possible to achieve this ambition.
Customer experience is extremely important for operational resilience. The insurance industry is in transition – if a customer doesn’t like the app or finds the website too complicated, they’ll go elsewhere. Low code can improve customer experience and design and remove some of these challenges by allowing a company to quickly adapt to customer feedback without embarking on a huge redevelopment program.
Throughout the pandemic, the insurance industry has helped customers by using video apps like Teams and directing calls from landlines to allow people to work from home without needing to issue phones. laptops.
Low code has already brought significant operational efficiencies to organizations large and small. In the UK, Tesco Underwriting increased operational efficiency by 57% by using low code during lockdowns. Legal & General was able to terminate three legacy platforms without increasing headcount while dealing with a 150% increase in claims volume and reducing claim settlements in some cases from 24 hours to 24 minutes.
In the United States, Work4Labs, which provides social media, advanced analytics and data services to Fortune 500 companies, needed an ETL (extract, transfer and load) solution capable of handling massive amounts of data without errors and without the need for experienced developers. Their previous ETL system involved complex coding that required ongoing maintenance and manual work. The low-code solution implemented a user-friendly ETL system that migrated data with a few keystrokes rather than days of hard work.
North Carolina State University has improved overall efficiency by using its low-code development platform to create two applications: one to manage non-credit course registration and ensure compliance for various seminars and courses, and a lab management solution that reduced time spent on third-party administration.
The primary benefits of using low code include bringing products to market faster at lower cost, in a more collaborative way, and the ability to react to change without the risks and costs of traditional development. Low code allows companies to adapt more quickly to market changes, by increasing the distribution of new products and digitized offers.
But it is not yet known if these new tools are here to stay. Will they become the legacy of the future? Until now, most people have looked at low code and thought, “Where can we use this technology?” »
But what a company should look at is its problem statement. For example, what does he need? How to improve business resilience? From there, the low-code solution can be shaped around the company’s specific business problem.
One of the main obstacles to the adoption of low code is the reluctance of companies to use unknown service providers and the mistrust of start-ups. But if subject matter experts become heavily involved in the design process and senior leaders act as change champions and provide the resources to support the changes, these fears can be overcome.
Another inhibitor for IT projects such as low code can be organizational culture and people’s assumptions that they are going to cost millions of dollars and take six months to a year to develop.
But the whole point of low code is to empower end users and business analysts. Development doesn’t always have to be complex; low code is composable and faster to develop. You can have experts within your company building the solutions, and end users can help you design, deliver, and implement.
The key to getting the most out of low code is for insurers to choose the right vendor who will continue to invest in their platforms and innovate. Insurers must also manage their expectations. While it is possible to make changes in hours or days, to effect real change these projects will take weeks or months. It is important that companies do not underestimate the amount of work required or the culture required to support change.
And to minimize headaches, it’s better to create simple applications like quote and bind, reusing repeatable components, rather than completely redeveloping systems. Solutions can become more complex as an organization’s capacity with low-code toolsets grows and develops.
Low code can act as an enabler of operational resiliency and bring efficiency to the insurance industry, reducing underwriting costs, automating manual processes, reducing processing time and support costs. Systems can be built for quotes, billing, underwriting, policy issues, claims, and submissions, among others. Contactless systems and the efficiencies they bring will ultimately drive resilience as well as revenue growth.
By adopting low code, operational resiliency should become easier in the future because there is no need to adapt legacy systems, IT expenses are reduced, solutions are business-focused, and there is much more easier and faster to create solutions to meet changing business needs. environment without the challenges of conventional IT development projects.
Source: The AU Times
