2020 started on quite a high. Global insurance premiums topped $5 trillion, according to Accenture1, and financial services could afford to worry more about technological disruption than market turmoil. But as has been the case countless times in human history, a plague arrived and upset everything.
Last year will go down as one of the most bruising in living memory, and though we hope to see the end of such challenging times, 2021 will not deliver a sudden reversal of fortunes. But it’s not all gloomy news. The COVID-19 pandemic has been catalytic as well: for example, raising the profile of digital transformation and risk management.
“It’s been a very strange year, where we have lost a lot but also gained a few surprises,” says Riaan Bekker, Force Solutions Manager at thryve. “One upside is the massive new appreciation of digital technologies. Before last year, many could agree on the wider benefits of going digital, but few were willing to make changes to processes and deeply embedded systems. Changes such as facilitating remote workers have shown that getting advantages from new technologies requires a bit of discomfort to get things right.”
thryve, which focuses on digital services that transform crucial business functions such as risk and financial management, saw these changes first-hand in the market, explains Neer Rama, thryve’s Force Solutions Product Manager:
“Traditional forms of resistance against digitisation are falling away. Companies could see which competitors did better and which faltered due to their technology investments. It’s interesting that the changes we saw didn’t generally relate to more involved and critical business systems, but rather about fundamental digital concerns such as access for employees and customers to company resources. But those changes also introduced many in businesses to the logic behind digital investments. Now there’s a push to do the same for those systems that are the sacred cows in the business.”
What are some of these trends arising from digital? By looking at predictions from the great corporate seers, we can predict some of 2021’s potential:
Digital is everywhere
Insurers face the prospect of more payouts around cyber coverage, such as business continuity in case of a cyber attack. There will also be greater demand for cover around cyber risks, including enhanced identity protection. The development and testing of such products will need digital’s flexibility and speed off delivery. Financial institutions, says Deloitte2, have to focus on bringing many ‘traditional’ processes – such as opening new accounts – squarely into the digital world. Aligning digital with new products and services is a big opportunity, as customers are already looking for such convenience.
Cost pressures could derail modernisation
Though digital is everywhere, companies mustn’t get swept away by the wave. For example, Forrester3 predicts that many financial institutions might go all-digital to capitalise on customer enthusiasm but primarily for cost-cutting reasons. Yet while customers love digital experiences, technology can’t replicate the human touch. For example, in insurance, startups use digital to streamline behind-the-scenes activities and focus their human assets more on building traditional relationships with customers. Digital is powerful, but not a magic wand. It’s key to work with partners who can help shape technologies to work with the business, and not hijack its vision.
Services are growing fast
Services are starting to catch up to products in terms of revenue. Deloitte4 notes that “35% of our respondents generate 30% or more of their revenues from service-based business rather than products.” In this context, ‘services’ are digital capabilities extended from the organisation into other areas, ranging from roadside assistance to customer self-help portals. This is also a value-chain consideration: a company’s partner could use a value-chain service as part of its operations, sourced from the primary service provider’s platform. For example, a large enterprise customer could use dashboards from their financial consultants to browse company metrics at its leisure. Some of these services can be very innovative, such as a Chinese insurer using artificial intelligence and facial recognition to give members access to virtual medical consults.
Digital modernisation will be instrumental for cost-saving and new lines of revenue. These trends show that 2020’s damage inadvertently sets 2021 up to be a terrific year for establishing and pursuing a digital strategy. Fortunately, these services are accessible through the combination of technology platforms and skilled business modernisers such as thryve. Contact thryve today and learn how digital can lift your business in 2021, and beyond.