IDC Financial Insights’ latest insurance research uses the IDC MarketScape model to present a 2018-2019 assessment of 13 vendor companies servicing the insurance organizations across the globe in their digital transformation (DX) initiatives. This research is a quantitative and qualitative assessment of a vendor’s ability to enable insurance organizations to succeed in their DX initiatives and help anticipate its ascendancy. The evaluation is based on a standardized and comprehensive framework and a set of parameters expected to be most conducive to success in providing DX services in the short and long term. The general market’s perception and technology buyers’ perception of vendors’ current capabilities as well as their attitudes to innovation to help insurance carriers and intermediaries thrive in an extremely challenging marketplace are key components of this evaluation.
The mission in financial services today is driven by the need to improve customer engagement in selling, delivering, and servicing financial products, payments, and services. Included in this mission is the need for some financial service firms to improve their “brand trust,” providing their customers with a more transparent and secure environment. While some of this will be driven by internal strategy, much of it will be dictated through regulation and guidance. Driving all this is a concept called “connected banking,” which is forcing the industry to disrupt its own business model by connecting to adjacent markets in order to expand the relationship with its customers and provide an experience that is being shaped by industries outside of financial services.
Technology is changing the concept of work as we know it and the technological advances anticipated over the next several years will dramatically continue to do so. This evolution is expected to have a substantial impact on an organization’s work culture, work space and workforce. Specifically, each of these organizational pillars is influenced in the following manner:
Providing a differentiated customer experience is becoming more difficult for brands. Yes, customers are integrating more technology into their lives that results in more channels engage with and more data for the brand, it also makes it more difficult to provide a consistent experience across those channels to effectively and contextually target those customers with the right experience without more technology. It is becoming a never-ending cycle.
This IDC Financial Insights study presents the top 10 predictions — in no particular order — for payment leaders to consider as they think through their upcoming plans. A common set of key drivers are included so that technology leaders can look at the broader conditions beyond the predictions.
With direct digital transformation (DX) investment spending of $5.9 trillion over the years 2018 to 2021, this topic continues to be a central area of business leadership thinking.
IDC’s 2019 DX predictions represent our perspective on the major transformation trends we expect to see over the next five years — based on our almost 800 business use cases spanning 16 industries and 8 functional areas, our DX spending guides showing where industry is both prioritizing digital investments, and where we expect to see the largest growth in 3rd Platform and innovation accelerator technologies.
The 10 predictions from IDC’s inaugural corporate banking study are reflective of a major change underway in the sector as digitalization and internal DX escalate, while cognitive, connective, and analytical technologies develop in cloud, AI, and DLT fields. Meanwhile, the open banking and API trend promises new front-end, data-centric tools in the pricing of loans, trade finance, instant-payment route analytics, liquidity alerts, and so on, plus new services and market entrants. The pace of change will reach an inflection point in the next five years.
As industries — and the global economy — rapidly realign and consolidate around digital innovation, CXOs must race to reinvent their organizations for the fast-paced multiplied innovation world. This means reinventing IT around a distributed cloud infrastructure, public cloud software stacks, agile and cloud-native app development and deployment, AI as the new user interface, and new, pervasive approaches to security and trust at scale.
The ‘Open Banking Revolution’, triggered by the second Payment Services Directive (PSD2), will see new, API-connected services brought to European consumers around the traditional core financial services, creating a more holistic banking experience. It is not just the regulation that is pushing banks to deliver customer-centric products and services. It is also the changing customer attitudes in the way they engage with their banks. It won’t be surprising if insurers are faced with a similar regulation or challenged by competitors influenced by the disruptions in banking sector.
This blog from Sabitha Majukumar (Senior Research Analyst, IDC Financial Insights), Philip Carnelley(Research Director, European Software Group) and Arun Dani (Senior Research Analyst, IT Services) highlights IDC’s recent research on cognitive systems and its impact on insurance industry.