Kicked into high gear by COVID-19 and pending regulatory reforms, the digital transformation of finance in the insurance industry accelerates every day.
The chief financial officer (CFO) is at the center of it all - managing much of the business information that will drive the move to digital, including a real-time view into saving and spending, the ability to financially model product and market scenarios, and an understanding of the evolving regulatory climate.
Finance is key if executives are making decisions based on up-to-the-minute conditions.
These additional responsibilities represent a new challenge for many CFOs, who likely have not handled heavy responsibilities in digital transformation. The situation is complicated by the fact not many use cases exist demonstrating the effectiveness and productivity increases from digital transformation specifically in the insurance industry, although they do exist in other
It’s fair to say that if the finance function is not fully digitized in its operations, processes, and capabilities, the overall organization’s digital journey will derail before leaving the station.
CFOs juggle multiple responsibilities: financial stewardship, business partnerships, risk management, and cost reduction. Now, they can add another leadership role to their portfolio — finance transformation leader.
Here are just a few of the CFO’s new responsibilities:
Talent evaluation: The CFO will lead evaluation and development of new digital roles. They will play a key role in incorporating digital specialists, including software programmers, data analysts, product developers, visualization experts, and cybersecurity gurus, while upskilling existing workers to function in a digital-first organization.
Technology strategy: CFO’s won’t be responsible for assessing the technical readiness of new applications; that’s the role of IT. But the CFO will be responsible for the capabilities of new technologies that align with the goals of both finance and the overall organization. For example, blockchain can be used in a variety of applications: contract administration, supply chain management, asset management, payments, speeding up reconciliation, securing financial transactions, reinsurance reporting and settlements, and even streamlining financial flows inside the organization.
Working with the chief information officer, the CFO will determine the use cases for blockchain implementation, write policies and procedures for its use, and establish shared governance oversight.
Customer experience (CX): Even though CX is a responsibility shared throughout the organization, the CFO will set the tone for how finance engages with its customers, internally and externally. The finance leader will set goals and expectations for developing user experiences and possibly create a finance-specific CX team.
Cheerleader and visionary: The CFO will drive digital change in their organization and evangelize the benefits of digital finance throughout the business. Change management skills will be in critical demand, as old assumptions about how work is done are challenged daily. The CFO will also be chief visionary for the department, painting a compelling picture of how the new organization will benefit employees through opportunities for training and advancement.
The digital transformation of finance should have been at the top of the change agenda for most insurance companies over the last few years. Now, in the post-COVID world, digital competence is table stakes required to compete effectively.
We have much more to share about the acceleration of digital finance. Download our paper, “Using Digital to Transform Finance in Insurance: Six Steps to Drive the Digital Transformation of Finance.” You’ll learn why now is the time to act and fight complacency, and how to create the finance transformation within your organization.