Insurance & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


00:00 AM
Connect Directly

FTE Theme: The World Is Getting Smaller

Although insurers may be playing catch-up in terms of the Web and related technologies, all financial services segments are facing huge challenges in such areas as workforce, customer focus, and performance tracking and execution. Those were the messages of experts speaking at last month's Financial Technology Expo in New York, co-sponsored by Insurance & Technology.

One of the biggest concerns executives have is tracking profitability. However, during the session, "The Profitability Yardstick," Joseph Prunty, founder, president and CEO of CorePROFIT, said many financial services companies are defining profitability "the wrong way." Most companies group customers into large segments first, when they should be looking at each customer's transactions first and then group customers into the "profitable groupings and the customers that are by no means profitable," Prunty said.

Many companies are finding that efforts to determine customer profitability can run afoul of new privacy regulations and considerations. Speaking at the session "Privacy and Paranoia: Compliance, Confusion and Your Customers," Mynd vice president John Richards reviewed details of legislation such as last year's Gramm-Leach-Bliley Act, with regard to the opportunities it brings financial institutions. "Congress is actually encouraging these things," Richards said, while noting the regulatory liberalization is accompanied by serious concerns about of confidentiality.

This kind of approach requires close business and technology. However, this can be an elusive goal, according to Judy Johnson, vice president, insurance information strategies, META Group, at the session "Achieving IT/Business Alignment in Today's Marketplace. "Business cycles are shorter and technology becomes obsolete more quickly," she said. "The digital planning cycle is six to 12 months. Today's CIO has to deliver value to the business and move at the same speed the business is moving."

Among the technology executives who "get" this, expect to see more of them shift into the areas of venture capital and technology start-up funding, according to keynote speaker Virginia Gambale, a former securities industry CIO who now is managing director and group head, Deutsche Bank Strategic Ventures. "By nature, technologists love to create," she said. "They love to find new ways to do things. They're geared to change and tuned to thinking ahead."

These are among the factors driving the accelerating globalization of financial services. At "Serving the World Through Globalization," Mark Greene, Ph.D., vice president, strategy and solutions, IBM, observed that a key trend is "empowerment of consumers," which means the different channels an institution supports "are no longer a meaningful distinction." He sees the industry "morphing" into three models of specialization: firms that focus heavily on customers, those that focus on manufacturing different products, and those that aim at being a back-office engine and transaction processor.

However, to meet any of these challenges, insurers will need to deal with the workforce crisis. "Keeping Your Labor In-House," noted John Rovito, director of Computer Generated Solutions, requires making the workplace a community where people feel a connection to what they do and where they work. "The greatest challenge is in leadership," he said. "You have to promote your company day and night, and have a reputation as a good place to work."

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio

Register for Insurance & Technology Newsletters