The Missing Powerhouse of Digital Transformation: The Middle- and Back-Office
Unlocking Success through Middle- and Back-Office Functions
One hypothesis in enabling the success of Blueprint Two, or indeed any technology transformation, is to leverage the power of the middle- and back-office functions.
Traditionally, the requirements and focus of technology transformations have focused on the more visible front-end roles such as underwriters, brokers, and claims handlers; those revenue-generating or direct client-facing roles. Teams in the middle- and back-office are then often brought in too late or left to pick up the pieces and have to rekey data into the old and new technologies. They can also be part of the business case for efficiency gains yet, which roles know the end-to-end process the best? Which roles know the impact of change front to back? It is, of course, the middle- and back-office.
Leading the Change through Middle- and Back-Office
To avoid the ‘whack-a-mole’ of technology transformations, (i.e. one element is considered new or ‘fixed’ only for this new thing or fix to create even more work for those downstream), and for a transformation to be truly successful, especially in an intricate market like London’s, it is imperative that middle- and back-office roles lead the change.
The middle- and back-office functions of insurers and brokers are the backbone of those companies. They ensure that the business operates smoothly, data is entered and processed efficiently, and they follow the compliance and regulatory requirements’ rules. These roles, covering operations, finance, compliance, and support services, are critical in processing the vast amounts of data and transactions that flow through an insurance company daily.
Optimising Systems and Processes
As the industry moves towards digitalisation and by the middle- and back-office teams leading the digital transformation, these functions can ensure that the systems and processes put in place are effective to make that shift from documents to data-led, that they are optimised for the handling of data (v documents) and thereby drive greater adoption, fewer ‘whack-a-mole’ issues and a far smoother transition as the end-to-end process is considered across the various line of business nuances. With the advent of digital technologies, the ability to efficiently collect, process, and analyse data is critical – without it, this significantly impairs data-led decision-making, risk assessment, and ultimately customer service.
The Responsibility of Regulatory Compliance and Operational Resilience
Regulatory compliance and operational resilience are core to insurance business, and these responsibilities predominantly lie with the middle- and back-office. Digital transformation done well leads to more robust compliance and operational resilience frameworks and execution. Automated processes and advanced analytics can provide real-time monitoring and risk assessment capabilities, enabling quicker responses to regulatory changes and emerging risks.
Empowering the Transformation Leaders in Middle- and Back-Office
As London moves through their digital transformation, the success of these initiatives will largely depend on the active involvement and leadership of middle- and back-office teams and their expertise and end-to-end process perspectives. Their deep understanding of the operational intricacies, regulatory requirements, and the critical role of data and processes and the overall impact of change from front to back makes these teams both ideal and critical to steer these changes to success.
By recognising and empowering these roles as leaders of digital transformation, insurance companies can ensure a more holistic and integrated approach to digitalisation. This strategy not only addresses the technology aspects of transformation, it also aligns with the skill sets and people, operational, regulatory, and data goals of the industry to deliver on ‘better, faster, cheaper’.
Get in touch with Alchemy London Market to further comprehend your digital transformation journey, including defining and implementing your strategic priorities.