Insurers Prepare for the Future with Finance and Risk Data Integration
Gone are the days when the CFO and CRO could work at opposite ends of the building – or, to opposite ends. The worlds of finance and risk data management in the insurance industry are changing on a daily basis, thanks to increasingly complex external regulations and the evolution of internal systems. The 2008 financial crisis forced both companies and regulators to reevaluate business structures and focus on solvency. In the ensuing seven years, the whole system has shifted – and it will continue to change.
Finance and risk data are becoming more dependent on each other, and data systems as a whole are under a new level of scrutiny. Reports that reflect outdated data won’t satisfy regulators or shareholders.
So when you think about your current finance and risk data management solutions, ask yourself:
Do I have the right data?
Can I stand behind it?
Is it accurately reflecting my business?
From siloes to integration
From the outside, regulatory pressures are forcing you to update reporting systems in order to be in compliance and present accurate date when needed. And as you expand, you need to make sure your company is in compliance with regulations around the world. But with separate finance and risk data systems, there is a lag between starting a report and getting the results. In such a quickly changing industry, that time could make the resulting data instantly outdated. You need real-time data, and you need it now. The answer is one common platform that integrates finance and risk data management, with controls in place to make sure you are always in compliance. With a common platform, data is current and reporting is faster and instantly integrated.
Integration pressures aren’t just external. Internally, constantly evolving systems on the front end and back end are producing massive amounts of data. But these siloed systems aren’t working together. Every insurance company has a front-end system that processes transactions; in fact you probably have many of them. On the back end is the general ledger and reporting structure. In between there is a black hole of data management. It’s a patchwork solution for now, but it is a danger zone heading into the future. Achieving cross-platform control of Big Data requires an integrated and automated approach. By integrating risk data and finance on a common platform, you create a central solution that is working with the front end and the back end.
In addition to pressures both internal and external, you need the best platform that will help your company succeed. Real-time insight is becoming more and more important to that success. Integrated finance and risk data supports processes from strategy to planning and consolidation. Siloed processes slow down your company and keep you from the best possible information available.
Benefitting from an IFRA platform
With an integrated finance and risk architecture (IFRA) platform, all accounting, risk, regulatory, and reporting functions come from the same platform. You get a unified data model – a consistent repository of granular data across finance and risk. The benefits of an IFRA platform are real.
On the regulatory side, an IFRA platform instantly integrates regulations and mandates, so you can always know that you are in compliance. Some of these regulations involve risk-adjusted data, which is part of the integration of finance and risk. Sharing data with regulators is a quick process with an IFRA platform, and, crucially, it avoids multiple copies of data for which your company could be penalized.
Internally, a common view of assets and liabilities in one data model gives your shareholders an immediate view into the business, generates better reports, and can help improve your front-end system. You also have a full audit trail for all data, from source system through to general ledger, and a reconciliation cockpit that detects data discrepancies and sends automated alerts. Ultimately with an IFRA platform, you can:
- Increase business agility and efficiency
- Reduce risk and complexity
- Improve cost control and profitability
- Drive competitive advantage and growth
- Simplify and strengthen compliance
An IFRA platform provides unique value for all of your stakeholders, especially your C-suite. For the CIO, who needs to simplify the landscape, there is immediate access to the highest quality information. The CFO gets accounting transparency and automated processes that improve speed and precision. The CRO can focus on actuarial analysis instead of administration, and can define information consistently across the enterprise. And the CEO has the most important tool in today’s digital economy – fast access to accurate information.
The best way for your company to get ahead is to create a future-ready system that satisfies today’s regulations and is also prepared for what might come tomorrow.
Check out our recent Webinar and read the IDC white paper, sponsored by SAP: “Risk–Finance Collaboration at Global Insurers: A Partnership in Transition” to learn more about integrating finance and risk data management.