There are four steps to modernize legacy systems for better Customer Experience says Vijay Pahuja, Corporate Senior Vice President, Client Services, WNS.
Legacy systems in insurance companies have grown organically and in an ad hoc manner over the decades. As a result, the processes implemented in these legacy systems are fragmented, not seamlessly integrated and compounded by no single System of Record (SoR). The data is organized across multiple, highly siloed SoRs that have limited capability to support unstructured data and polyglot (data / voice / video) stores in legacy systems.
In these legacies, we are further challenged to associate data elements with their business contextual labels. This, in turn, severely limits the ability of business users to discover contextual information and derive actionable insights. We know establishing omni-channel Customer Experience (CX) is key to engaging customers, increasing customer satisfaction, and matching products and services to customer segments. However, technological limitations within legacy systems restrict the extent to which improved CX can be delivered.
So, how does an insurer leverage legacy systems while embarking on a digital transformation journey?
Enabling legacy modernization
As we look toward future, it’s critical for the insurance industry to first be aware of the latest trends in digitization to stay competitive. There is an increasing groundswell in the industry that will continue to draw the big players and insurtechs together to solve for the common good. Businesses will measure the success of their investments through new and tailored products and services being launched in a matter of weeks, not months, and customers gravitating to these with satisfaction.
Today’s transformative model is based on the principles of “fail fast” and “realize benefits even faster”. This strategy allows insurers to prioritize the digitization of high-value business processes and journeys that are critical to the CXO vision. We see three critical steps carriers need to take to engage effectively with their clients in the new ecosystem:
• Endorse openness, and collaborate with their partners to drive speed
• Be laser-focused on the individual customer experience
• Concentrate on value-centric products that are highly tailored to the insureds and can be quickly launched
The typical digital solution begins with a reimagined business process. Tools deployed in the solution leverage hyper-automation, use of a Low-Code Analytics Platform (LCAP), Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), polyglot data stores, and a data layout with configurable advanced visualization capability. To achieve the new ecosystem, we recommend the following four guidelines for leveraging legacy systems:
Federated System of Record (SoR):
Insights generation requires transactional data, historical data, balance forward data, social media data, and syndicated / subscription data. The data is both structured (multiple formats including K-V pairs, columnar data, graph data, etc.) and unstructured (multiple formats including voice and text). A federated SoR uses amortized legacy investments and makes available all necessary
legacy and non-legacy data needed to support a specific business use case. This can be augmented with AI / ML / DL /fuzzy logic capability to detect anomalies, data quality and completeness issues, and to score and enrich data sourced from data sources of varying
degrees of provenance before it is consumed by the downstream process.
System of Engagement (SoE):
An SoE is a minimally disruptive or invasive approach to deliver business outcomes without having to replace legacy systems in their entirety. An
SoE takes an app-centric approach to connect data, processes and people seamlessly using digital technologies. An SoE sources necessary data, business rules, and process logic from legacy as well as non-legacy systems to deliver a uniformly integrated use case or journey map. It can be
combined with other digital offerings such as RPA.
Polyglot Data Stores:
A polyglot data store not only supports multiple formats of data but also federates disparate SoRs, including legacy SoR. It is designed to be flexible to support specific business use cases and data science analysis. It also allows for a steward-driven write-back (and / or replication) to legacy sources to ensure that all enterprise data remains consistent.
System of Insights (SoI):
An SoI leverages AI / ML / DL models and KPIs, clustering algorithms, and deterministic rules to facilitate information discovery and generation of
actionable insights using LCAP capability. It enables business leaders to perform what-if multi-dimensional analysis and forecasts. It enriches the self-service-driven CX. Most importantly, it learns from human interactions and improves accuracy over time. An SoI, coupled with an SoE, makes optimal use of legacy systems while facilitating the transformation to the reimagined future state.
Insurance of the future: Digital and customer-focused
The prospect of a tailored insurance engine will shape the industry over the next decade, with technology giants and insurtechs pushing the pace of the development. While the industry has recognized the importance of digital, there is still a way to go to achieve true customer-centricity
with end-to-end automation. Sawyer Brown’s 1989 song lyrics represent where the industry is at today: “Now the race is on, and here comes pride in the backstretch”. Let the race begin!