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A LOW-CODE LONDON MARKET – THE KEY TO INDUSTRY FUTUREPROOFING

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By Richard Farrell, Chief Innovation Officer at Netcall

 

Aged 332 years, the London Market isn’t new to the need to modernise. For many years, the insurance market has been cautious regarding change and technological advancement, whilst facing mounting pressure to radically transform and keep pace in the digital world. The pandemic, however, has amplified this need for change. Following a year of economic instability, London Market firms risk becoming obsolete if they do not take immediate and urgent action to modernise.

In September 2020, the London Market reported a half-year loss of £400m, compared with a £2.3bn profit in the first half of 2019, and expects to pay out around £5bn in COVID-related claims. With further turbulence and financial uncertainty ahead, the corporate body must keep its sights firmly set on cutting unnecessary costs and transforming internal processes to facilitate this.

Whilst throwing the sector into chaos, the pandemic was a true eye-opener for the Market. Relying on systems and processes built years ago, which were centred around people doing business in a City office, left the London Market at a crossroads and facing once-in-a-lifetime challenges and opportunities. Lockdown created an urgent need for new systems to support a new hybrid workforce, and within this need now lies the opportunity for London Market firms to rejuvenate – building greater efficiency into systems and processes to enable agility and future growth, as well as long-term digital ways of meeting and working. Intelligent automation technologies such as low-code platforms, when combined with robotic process automation (RPA) and powered by artificial intelligence (AI), will be pivotal to this transformation. With these platforms, London Market business users can collaborate and build new applications with IT teams without the need for costly and time-consuming traditional coding methods.

As a result of redesigning processes, London Market businesses can identify where efficiencies can be made and then rapidly develop optimised systems that keep both technology and people at their core. This will be crucial to achieving significant long-term cost savings and maintaining the London Market’s current position on an international level.

 

Using 2020 challenges as inspiration to evolve

The last year has seen a range of hurdles for both the London Market and individual businesses: a shift to remote working, the need to optimise costs, and the imperative to maintain status in the global order. These have not been easy, and these challenges are likely only the start of greater change that we will see in the coming months and years.

Businesses have proven in the last 12 months that they can adapt and shift when needed with the Blueprint plan, Lloyd’s of London’s ambitious plan to create the world’s most advanced insurance marketplace. Blueprint Two, which was released in November 2020 and built on March’s Blueprint One, established new ways of doing business, underpinned by the need for digital channels that enable advanced data collection and management. The right tech and tools can enable brokers, insurers and partners with delegated authorities to operate at a materially lower cost, estimated to be at least £800m as part of this evolution.

As John Neal, Lloyd’s of London CEO, states, the London Market needs to make itself ‘more relevant, more innovative and much more cost-effective’. Solutions that enable rapid digital transformation, whilst boosting efficiency and lowering costs, will be crucial to achieving this goal.

 

Future-proofing the London Market 

Due to its ease-of-use, low-code platforms can empower London Market teams to collaborate to build new applications in the fastest way possible and speed through application backlogs. Rather than taking a rip-and-replace approach to innovation, the technology can enable London Market organisations to stitch legacy systems together with new applications – effectively building upon existing investments to provide a better user and customer experience.

With the right technologies, the London Market can rapidly reduce inefficiencies by automating manual or broken processes, whilst also integrating with a number of different systems. This will enable organisations to provide a central platform that can give visibility across all parties – and in turn enable better decision-making through richer data and the use of AI.

Perhaps one of the more pressing London Market processes brought into the limelight during the pandemic has been the process of claims management – which intelligent automation solutions can help with too. With so many stakeholders involved, managing the claims lifecycle can be extremely complex, and the sheer number of claims being processed means that teams face huge pressure to provide swift service, and to keep claims pipelines moving. By consolidating data and processes under one platform, the lifecycle management can be improved to provide real-time information relating to a company’s claims exposures, including aggregates, and other elements such as supplier management. Greater visibility of these elements will, in turn, drive greater sector efficiencies.

 

Reshaping the London Market once and for all 

The next few months will bring myriad challenges and opportunities around reshaping how London Market businesses work and trade for the benefit of its clients and people. There are considerations for all organisations, including new ways of employee and trading partner engagement. A one-size-fits-all strategy simply won’t work in such a complex environment, but using the right software can unlock business benefits and growth potential for London Market firms large and small.

Fundamentally, London Market firms must invest in and prioritise the technologies that will enable their workforce to save time and drive value back to the organisation – as well as work how they want to work. Whilst the social nature of the London Market, which is largely based on personal networks, indicates a strong return to office work when lockdown restrictions are lifted, there is still likely to be some level of remote working moving forward.

Flexible and agile intelligent automation technologies can empower the London Market to join data together across numerous back-end systems to provide an easy-to-use workflow across complex process requirements. By enabling employees to make better-informed underwriting and claims decisions, based on better access to enriched information, organisations can not only drive greater efficiencies, but keep up with the demands of a digital-first future.

 

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BECOMING THE CEO: THIS IS HOW CFOS CAN SECURE THE TOP JOB

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Mark Freebairn, Partner and Head of the Board and CFO Practices at Odgers Berndtson, explains what CFOs need to do if they want to become CEOs 

 

For some time now, there’s been a very clear trend in CFOs progressing onto CEOs. It’s a trend that should come as no surprise to executive leaders. With more CEOs under increasing pressure, many CFOs have become the nominal second in command, often taking non-finance related responsibilities off their CEO’s plate.

As result, CFOs have begun playing a more strategic and commercial role which has inevitably broadened their remits beyond the finance function. With many CFOs breaking out of the traditional financial management confines, executive teams and boards have begun to realise that finance and general management are more closely aligned than they previously thought. This has given CFOs more opportunities to gain experience relevant for the CEO position. From owning P&L business units to engaging with external investors, the CFO’s evolving remit is making them likely candidates for the top job.

That’s not to say it’s a done deal for anyone who is currently a CFO. The CEO jobs market is comparatively small, CEO turnover is typically slow, and competition is intense. So below, I’ve outlined the key areas CFOs should gain experience in and the opportunities they should capitalise on if they want to compete for the CEO positions out there.

 

Mark Freebairn

Take responsibility for P&L business units 

Overseeing specific business units is a natural extension of the CFO’s responsibilities. It provides experience of managing products, costs, and revenue generation – all of which are staple requirements for the CEO role. But it also provides operational credibility internally, which will prove advantageous for any CFOs lining themselves up as a succession candidate to their own CEOs.

If possible, CFOs should take on responsibility for turning around a failing business unit. This is the fastest way of gaining commercial experience relevant for a CEO role. Particularly as economies emerge from the pandemic, boards will be looking for leaders who can demonstrate an ability to drive growth and new business despite significant internal and external challenges.

Likewise, CFOs should involve themselves in other business functions. Whether it’s procurement and the supply chain, or facilities and security, CFOs should play a role outside of the finance function in order to gain broader business experience.

 

Build a highly-autonomous finance team 

The CFO’s role within organisations and their ability to easily expose themselves to other P&L units makes them suitable candidates for CEOs. However, CFOs are only as good as the team around them. Building a high-performing finance team that can drive the day-to-day operations of the function will have several outcomes. Firstly, it will free up a CFO to take on more responsibility around the business and gain more time with their CEO. Secondly, it’s a valuable proof point that CFOs can use in any interview to demonstrate their ability to build strong teams – as a CEO, building a strong cadre of trusted executives is crucial for success.

This should be a team that can be trusted to perform autonomously, with a strong second in command that the CFO can rely upon.

 

Take on a non-executive director (NED) role 

While financial management is central to any successful organisation, CFOs still need to develop expertise outside of the function if they are to step up as CEOs. Taking responsibility for P&L business units will provide this, however it won’t provide a CFO with the same board-level perspective that a NED role will.

Taking on a NED role will not only help CFOs to understand what boards expect of CEOs but it will also provide experience of a different kind of leadership; one that is less hands on and more about guidance and mentorship.  Within the commercial sector, there are board roles among smaller quoted companies, those backed by private equity, or family owned businesses. Advisory boards and subsidiary boards are also a good option.

On the public sector side, board roles exist within organisations owned by or reporting to government. These include major infrastructure operators, the NHS, regulators, museums and other arts institutions. Likewise, a charity trustee role (while unpaid) is similar and will help to develop both a CFOs network and board skills.

Auditing, budgetary reviewing and balance sheet responsibilities are often sought after skills in non-executive directors, making CFOs ideal for these positions.

 

Take on internal leadership positions 

These types of leadership positions should be separate to the finance function and can include things like internal workstreams, strategic initiatives such as I&D and sustainability, or CSR projects. The benefit of taking on this responsibility is two-fold. It helps build necessary leadership skills and provides leadership experience. But it also showcases a CFO within the business in a leadership capacity outside of finance. The later will be beneficial for any CFOs looking at internal progression onto the CEO position.

Mentoring achieves similar outcomes. This helps build leadership skills and can lead to greater exposure around the business. What’s more, any mentee may later become a useful contact in a CFOs network.

 

Network outside of the organisation 

CFOs often underestimate the power of a personal network. Building relationships with other senior leaders will enable a CFO to generate career opportunities that can lead onto CEO appointments. While professional networks within the CFO community are valuable, networking outside of these types of environments is likely to be the most profitable for career advancement.

Any CFO looking to make the jump to CEO should build relationships with a variety of third parties. These include shareholders and brokers, investors, M&A specialists, bankers, and even lawyers. A CFOs experience and perspective can be incredibly valuable to these types of professionals so getting on their radar shouldn’t be difficult. Making the effort to build a relationship with them will pay dividends in the long run, and may lead to hearing about, or if you’re good enough, even being recommended for a CEO position.

 

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REDUCE CUSTOMER DISPUTES WITH DATA TRANSPARENCY

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By Gabe McGloin, Head of Business Development EMEA at Verifi

 

The digitisation of commerce has escalated the need for card-not-present (CNP) businesses to bring proactive customer communication to the fore. From digital receipts to high-tech AI chatbots, sellers have more options than ever to interact with customers. Not only will embracing these efforts heighten transparency, but also improve customer service and foster better relationships which plays an important part in preventing disputes, preventing disputes, and ensuring ongoing custom to the seller.

According to a recent report by KPMG, 90% of consumers regard a complete resolution of transaction issues as one of the most important qualities of great customer service[1]. Providing customers with clear information at the precise point they need it should be a central part of all companies’ dispute strategy, as resolving the issue early is in everyone’s best interest.

Keeping customers informed through proactive communication and delivering clear transaction information can lead to reduced friction in returns and refunds. Such efforts should be coupled with greater sharing of transaction data between seller and issuer, allowing purchases to be easily confirmed and understood. Clear but not invasive communication pre-empts disputes and can prevent the escalation of many far-reaching problems related to disputes.

 

Prevention is better than a cure

A company’s disputes strategy should feature preventive tactics at the presale experience. Sellers should ensure at the point of purchase that customers have all the appropriate information needed for a complete and satisfying purchase. Ensuring customers are making well-informed decisions is not only important as best practice, but a good measure to help minimise returns, refunds, and disputes.

At or before checkout, sellers should provide easy access to policies. Clear and concise terms & conditions allows customers to understand their rights and what is expected of them. Likewise, returns & refunds policies should outline the procedures for customers to take in the event a product or service does not meet their expectations. Subscription services must also be clear around commitments and cancellations. A key area of needed clarity is in the scope of free trials: unclear rules can leave customers feeling cheated when they see an unfamiliar charge on their billing statement. To avoid disputes, service providers should clearly outline the end date at the outset and remind customers at the appropriate time of the pending close of the free trial period.

By giving customers clear information about their rights and available actions up front, confusion and speculation leading to disputes may be reduced. In the unfortunate event a dispute does occur, clearly presented presale terms and customer purchasing history can provide sellers with important compelling evidence for successful representment and recovery of funds from unwarranted chargebacks.

 

Did I buy that?

Unrecognised transactions can often lead to consumers disputing charges with their issuer. Far too often, customers contact their bank to submit a dispute, simply because they do not recognise transactions on their statement. This type of activity is a key driver of friendly fraud. Research shows that 77% of heavy online shoppers who reported a problem transaction on their statement are in favour of having access to enhanced transaction details. In fact, 75% of credit card users will do research on an unrecognised transaction before they call their issuer (83% for debit card users). It should also be noted that 25% of calls to the issuer could be prevented with clearer seller transaction descriptors on billing statements[2]. The ability to effectively head off confusion around transactions is the most cost-effective way to reduce customer disputes.

After the point of sale, proactive and continued communication is key to reducing disputes. Sellers should follow transactions with purchase confirmation and transaction details via email or text. If possible, confirmation should include business name, contact information (email, phone), purchase amount, date of purchase, item(s) quantity and descriptions. Also, if applicable, sellers should provide tracking and shipping information and receipt confirmation of goods/services. These standard practices should leave customers no doubt about the purchase they made, as well as instil confidence in the sell with whom they have conducted a transaction.

Sellers must embrace technology in their communications with consumers. In a recent survey, 60% of customers thought a digitally posted picture of the printed receipt would be most helpful in validating a transaction[3].

Despite best preventive practices, some disputes are inevitable. Sellers that provide data transparency throughout the sales process – maintaining all documented communications and records of customer purchase history and behaviour – can provide compelling evidence to build effective dispute responses for improved revenue recovery.

 

Reduce disputes with collaboration

To be most effective, all communication should be coordinated across consumers, sellers, and issuers. By practicing transparency and opening the lines of communication, consumers can self-resolve disputes or address them directly with sellers. Sellers can share information with issuers, so issuers can deliver vital purchasing data to their customers, thus minimising customer confusion that could result in disputes. Such collaborative technologies are now coming into the payments ecosystem, fostered in large part by major card brands.

It isn’t just sellers that benefit by supporting data transparency for their customers. 70% of customers contact their issuer’s call centre at some point in the dispute process[4]. This creates an unnecessary workload for issuers, as many questions and disputes could have been expediently handled by the seller by providing their customers with essential transaction information.

Data-sharing solutions enable sellers to provide purchase information to card issuers, which in turn can be delivered to customers through online banking channels or reviewed by customer services personnel at the point of transaction inquiry. Not only can these services help prevent unnecessary disputes, but also provide a more enhanced experience for customers in the post-transaction phase of the payment lifecycle.

 

Don’t lose touch

Dispute strategies should be underpinned by efforts to build a bridge of trust with your customers – using email, text, digital receipts – which includes, and in some ways depends on, issuer collaboration. Embracing digital alternatives is key; as multichannel retailing becomes commonplace, so should multichannel customer service.

 

[1] Customer experience in the new reality, KPMG

[2] Aite Improving the Dispute Experience May 2020

[3] Aite Improving the Dispute Experience May 2020

[4] Javelin Report – Optimizing Dispute Strategies / October 2020

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