Tech has changed parts of insurance sector — now for innovation of finance

• There is a chance of freeing up people to do high-value tasks such as generating insights to support strategy

When I started my career a few decades ago we were living in the golden years of the first “great IT boom”. Practically every company was throwing big money at tech. It was going to boost productivity to untold levels and drive growth as we had never seen before.

As we know now, things didn’t quite work out as planned. Part of the problem was the business model of the time: “the business” was mapped out by finance, sales and operations, and IT would then try to find ways to serve their operational needs.

Fast forward to 2021, and times have changed. Nowadays, tech sits at the heart of most modern businesses. To paraphrase what former GE CEO Jeff Immelt said in 2014, “If you went to bed last night as an industrial company, you woke up today as a software and analytics company.” It’s no different at King Price: we often say we are a tech and data company that happens to sell insurance. We are only half-joking when we say it.

Cloud tech, machine learning, chatbots, artificial intelligence (AI) and data analytics are having a huge impact on the way we make decisions, develop strategies and run our business daily.

Tech has been having a profound effect on the insurance industry for years. Thanks to data-driven insights, the ability of insurers to determine risk is evolving to a point of nearperfection. This results in more accurate and fair premiums — which means lower-risk clients will pay less for cover.

Tech is also bringing about sea changes in the customer experience, with data-driven technologies such as AI, apps and chatbots driving a range of digital-first, human-friendly services tailored to the exact needs of our clients. Now we need to ensure tech plays a similarly transformative role in the finance function.

As finance professionals, our relationship with tech is complex. Our eye will always be on the bottom line. Gone are the days when IT spend was part of the cost of doing business. Nowadays, we are actively looking not only for the promised benefits of our tech spend, but actual financial benefits.

We’re also intrigued by the possibilities tech offers to open new possibilities and efficiencies for our companies, and to free up our people to do high-value tasks such as generating insights and making the right decisions to support the business strategy.

DIGGING IN BOXES

Yet I recently had to watch my finance team, comprising qualified chartered accountants and accountants, spend hours of their time looking through boxes of documents to answer an audit query that dated back eight years. It brought home to me how important tech is, not just to support the finance function but also to take it to the next level.

In our case, what was needed as a starting point was a simple digital document management strategy that allows people to instantly call up an invoice, the payment linked to it and records of bank remittances. It is not just an auditor’s dream; it also has a huge effect on our finance team’s productivity.

Another tech that is already making a difference in many finance departments is process automation, which is getting software to perform some of the basic tasks that comprise a huge amount of the daily work of traditional finance teams. The key is to take the opportunity to review the processes and rework them where necessary, instead of simply automating old, redundant processes.

This not only frees up finance staff to do higher-value work and be more client-focused, but also makes their jobs more enriching by taking away the tedious work. Happy staff equal a better finance function.

We are also seeing a boom in the use of AI and machine learning, which build on the ability of process automation to liberate finance professionals from lowvalue work. This is where we start building true digital intelligence into a finance function.

As with all tech, though, it is not just a matter of installing software and pressing the on button. You need the analytical skills that are necessary to interrogate data effectively, and this is where assembling the right finance team is critical.

The big differentiator for finance departments will be how they use analytics effectively. The CFOs who use analytics effectively to combine finance data with other data will understand market trends better and be better placed to play a more strategic role within their business.

Strong analytics skills enable strong decision-making. They help executives see issues and potential problems before they arrive and plan accordingly. They drive a more strategic view of the business goals and solutions.

But there is no one-size-fitsall approach to tech. What is implemented depends on the specific business goals and challenges. We don’t always know where the tech journey will take us, and what our function will look like in five or 10 years. What we do know is that whatever the tech looks like, it will always look better than rifling through dusty old storage boxes looking for long-lost invoices.

NOWADAYS, WE ARE ACTIVELY LOOKING NOT ONLY FOR THE PROMISED BENEFITS OF OUR TECH SPEND, BUT ACTUAL FINANCIAL BENEFITS

AS WITH ALL TECH, THOUGH, IT IS NOT JUST A MATTER OF INSTALLING SOFTWARE AND PRESSING THE ON BUTTON