By Andrew Pitcher – Senior Vice President and General Manager, Financial Services, SAP Asia Pacific Japan
For the Asia Pacific and Japan region’s insurers and financial services industry, tackling their current challenges will lead to transformational innovation.
Three Core Challenges
Banks and insurers all seem to share the same three core challenges, which are giving rise to some interesting trends in Asia Pacific and Japan. The first – and something that probably 90% of banks are already working on – is responding to the modern-consumer’s need for a more customer-centric service. It’s not an unusual trend, but it is has really reached fever pitch in recent years.
There’s also a massive focus on better management of risk and on tying up the regulatory environment. Data sovereignty, security, plus financial and reporting compliance are all very important. Making provision for risk is one capital constraint, but so is the cost of compliance to regulations, changing technology and so on.
The other main challenge is to reduce cost and complexity, whether of business processes or technology, there is a massive drive to make it all simpler – less technology deployed from the cloud in a simpler way so that any change driven by the business can be made faster. It’s tricky because systems get implemented but don’t get used – typically, of the applications that sit in a bank or insurance company, most are redundant in three or four years. That said, with the evolution of the cloud, new technology can be deployed much faster, so the old complex environment is no longer relevant.
Looking at innovation, things are getting really interesting. Probably number one is that innovation is driving fundamentally different business models. It used to be about individual systems and processes, but now it’s more a question of completely changing the way services are offered to clients. For example they are going completely online or omnichannel instead of having a physical presence – it’s truly business-transforming.
In terms of the deployment of technology itself, in the old days you would deploy technology and build it with a partner, positioning it over months and years. Now though, speed to market from cloud-based systems means you can implement things much quicker and, crucially, with much less risk and cost, allowing you to cherry pick the best solutions in the market and deploy them for yourself pretty quickly.
The final thing to share is that as well as buying standard software, customers are much more prone to build out gaps in areas where they haven’t worked previously. For example, this means things like combining customer centricity with big data and mobility (taking the data a company has on what a customer might want to buy and using mobility to deliver it straight to them).
Asia Pacific and Japan
What they’re doing is joining previously disparate parts to deliver what previously they hadn’t even dreamed of. The financial services sector is incredibly competitive, with everyone searching for a point of difference. In Asia particularly though, the size of the consumer population is so great (almost three billion people) that the prize is worth taking a bit of a punt on when it comes to new capabilities.
The Asia Pacific and Japan region has both mature and emerging markets, but mobility and multichannel has taken off everywhere. That said, big data is perhaps more advanced in developed markets. We’re working on a process in a mature market to get a mortgage process running in 15 minutes via a mobile device. I saw a prototype today and it looks very impressive. It’ll only be available to certain customers but if it’s a glimpse of the future, then things will be interesting indeed.
What do you think about the issues discussed here? Continue the conversation in the comments below and on Twitter @SAPforInsurance and @SAPforBanking