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The financial services industry has seen drastic technology-led changes over the past few years. Early adopters of big data technology such as DBS bank has significantly reduced operational costs meanwhile improved resiliency. How has banking technology upended business models and what are the key challenges for financial services?
 
 
We recently had an interview with Vivien Chua, Chief Technology Officer, Shenton Insurance Brokers and asked her insights towards this topic. Vivien leads digital transformation of the direct insurance and reinsurance business. She is also actively involved in insurance/reinsurance placements and risk management consulting for corporate clients across the region.
 
How has technology implementation changed since you joined the finance industry?

In the past few years, Fintech has been driving the new business model in the finance industry. For a long time, new market participants found it difficult to enter the financial services industry. But that is changing, as Fintech start-ups focused on innovative technologies, ranging from mobile payments to insurance, are tackling some of the most important elements of the financial services value chain. Fintech start-ups such as Shenton Brokers are disrupting the incumbents, as it is highly agile, nimble and able to develop solutions that outperform longstanding insurance distribution.
 
What is the biggest challenge for the insurance industry today, especially in South East Asia?
 
ASEAN presents tremendous growth potential in the insurance industry, driven by the characteristics of low insurance penetration rates, the rapid growth of wealth and an expanding middle class. However, the insurance industry is confronted with the need to continually evolve to keep up with the instability and ever-shifting conditions of the economy and society.
 
A new way of distributing insurance via digital platforms and ecosystems is also emerging across South East Asia. Online aggregator sites, such as Shenton Brokers allow consumers to compare prices from different carriers and allows for an immediate switch from one carrier to another based on price. There are also digital non-insurance consumer platforms such as Grab and Gojek entering the insurance industry, with these digital platforms gearing up to become super apps, covering all aspects of e-commerce and personal finance.
 
What are the main challenges to your role this year?

As Chief Technology Officer at Shenton Brokers, my role is to spearhead the digital transformation of the direct insurance and reinsurance business. One of the main challenges this year is to attract and retain top talent. The labour market is tight in Singapore, with work opportunities abundant during a time of record-low unemployment. To make Shenton Brokers an attractive place to work in, we are trying to place more emphasis on building and maintaining a strong company culture. We are also developing young talent by encouraging and giving them opportunities to rotate to different departments within the company, in addition to placement for external training.
 
What opportunities does Fintech offer in terms of developing a truly single digital financial services market?
 
The ASEAN region is unique as a group of nations, not a single large country with financial and regulatory homogeneity. As a single economic bloc, the 10 ASEAN countries is double that of the United States in terms of population size, but customers are fragmented across many markets and economies. Geographical boundaries and local regulations have and will continue to hamper the development of Fintech in South East Asia.

In recent years, there has been an increased focus on cross-border collaboration, as ASEAN nations have promoted closer economic relations. While there still exist restrictions on license and foreign ownership limits in certain countries, the recent signing of a new e-commerce agreement in November 2018 is seen as evidence of the region’s commitment to digital solutions.

The developments in the Fintech space could play a crucial role in unlocking ASEAN’s potential, not only in the deployment of new technologies and innovative solutions in financial services but also in the development of a regional ecosystem that will provide more collaboration across geographies and markets.
 
China is now leading the Fintech market, how could the rest of the world benefit from financial technologies in their own markets?

China has been at the forefront of the Fintech industry, and is the largest Fintech market in the world. Fintech has enabled China to leapfrog from cash to mobile payments, bypassing the traditional banking system encumbered in developed countries. Moreover, the regulatory environment in China is less restrictive towards Fintech, and China is known as a safe zone for start-ups to test new ideas. Coupled with a large digitally-savvy, but financially underserved population, this has opened up opportunities for technology companies such as Alibaba and Tencent to offer financial services.

In recent years, technology companies in China have been aggressively expanding their reach in the rest of Asia, such as Singapore, Malaysia, Philippines, and Thailand by forming partnerships with local banks, insurance companies, retailers and tech companies. Many of the local companies rely on collaboration with Chinese tech companies to rise the digital learning curve. Through collaboration, we are seeing greater financial inclusion that plays a key role in promoting growth in these countries.
 
What’s your perspective on the future of Fintech?

Fintech is experiencing disruption at an increasing pace. Over the next few years, we are going to see more technology powerhouses dominate distribution in the finance industry. Many of these large tech companies have sophisticated technology, large customer bases and high efficiency in their operations, while incumbents tend to be bogged down by legacy systems that make it hard for them to compete in the future banking ecosystem. Which will be the eventual winner is hard to predict. One thing is for sure that the ultimate winner will be the consumer regardless of the provider they choose.
 
What will you be discussing in your presentation at the Big Data & AI Leaders Summit Singapore 2019?

I will talk about the rise of digital brokers, and how this is shaping the future of insurance. In the age of automation, data from our day-to-day activities is used to better understand customers, predict consumer behaviour and cater to those preferences. Models based on artificial intelligence are better than humans in learning from existing datasets, and respond to solve any problem or answer a query. These models will soon be able to “think” like a human and mimic the way a person responds.

The digital broker will bring together human and machine capabilities in the digital distribution of products, digital connectivity to policyholders and insurers, and digital automation of operations. This is used to demonstrate the enhanced value proposition of digital brokers. Robotics and artificial intelligence will be used to improve processes and create resources to focus on more value-added activities.
 
Suggested Reading:
Shaping a Big Data Strategy for Finance

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