It has become almost a reflex to say that the terrorist attacks of September 11, 2001 "changed everything." As we know now, there have been lots of changes in the insurance industry in the 10 years since that terrible day, and a lot of those changes can be directly connected to the events of 9/11 and the subsequent industry and government responses. It also could be argued that some of the most dramatic financial services industry changes of the past 10 years had nothing to do with 9/11 and everything to do with the global financial crisis and reaction to it.
Here is a random, arbitrary and, I'm sure, incomplete list of developments and changes that if, not specifically caused or changed by the financial services industry's responses to the 9/11 attacks, certainly took on a different significance in the tragedy's aftermath:
Data Management Goes "Big" -- While insurers had been working for years to do more with the vast amounts of data they had about customers, channels, financials and risk, suddenly these kinds of activities and the related technologies that could organize and analyze that information were in the spotlight. Who knew in 2001 that "data mining" would take on a negative connotation? And as the capabilities expanded, so did the sources and volumes of information expand -- to the point where we are now talking about "big data" as both an opportunity and a burden for financial institutions. Ironically, as the ability and need for both the government and the private sector to effectively manage and analyze data escalates, we are facing a severe shortage of professionals with the necessary skills to do so (which reminds me of the shortage of Arabic-speaking diplomats and analysts that proved to be such a problem in the post-9/11 environment).
Security, Privacy and Fraud --An Unholy Alliance? Closely related to the data management challenges, concerns about how much information and insight is too much (whether it involves insurers, the government, or criminals) have been debated constantly since 9/11, with few satisfactory solutions in sight.
Globalization and the Unbanked -- There were poor and marginalized people with financial needs before 9/11. Some observers argue that poverty and disenfranchisement are factors that could drive some people to embrace terrorism, or at least resentment of the West. The emergence of microloans, microfinance, and other services geared to provide people in emerging and/or impoverished economies with reliable and secure financial resources is not a direct response to 9/11 but certainly could in some way improve lives and economies and add value to the global banking system.
Regulatory Roulette -- The Patriot Act was a direct response to the events of 9/11, but the decade also could be seen as bracketed by The Sarbanes- Oxley Act (passed in 2002) and The Dodd-Frank Act that was passed in 2010. The common themes: transparency and accountability, which are not necessarily bad things for corporations to provide.
Re-creating Data Centers -- 9/11 provided a wake-up call to many financial institutions that had taken for granted that the locations and provisioning of their data centers and back-up sites would be safe, secure and accessible. The past decade has seen tremendous innovation and reinvention in data centers, with the implementation of virtualization, SaaS, and cloud strategies, as well as energy-saving green strategies. Not only are financial institutions saving money and running more efficient data centers, they also have an operational flexibility that did not exist in 2001.
The Emergence of Mobile -- Yes, we all had cell phones in September 2001 -- and if you lived in the Northeast, those phones didn't work very well (or at all) on 9/11 or for a few days after. Today, mobile communications are ubiquitous and mobile is an increasingly important platform for insurance transactions. Yet questions remain about how well mobile communications will work in a crisis, when millions of people are simultaneously trying to place calls or texts.
Social Media -- Who Knew? The mind boggles trying to imagine what it would have been like (for better and for worse) if FaceBook and Twitter had existed on 9/11. Today, insurers actively use social media to communicate with customers in advance of a forecasted natural disaster such as a Hurricane. We can only conjecture as to the role these networks might have played 10 years ago.
Reviewing these developments, it's almost easy to forget that on 9/11 and in the frightening, eerie and uncertain days that followed, there were legitimate questions about whether the financial services industry could even survive the attacks on one of the world's primary financial centers. That it has not only survived but grown and evolved is a very good thing. On September 11, 2011, that pride must be tempered with sadness and remembrance of the lives that were lost on an awful day 10 years ago.
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