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IT’S TIME THE UK LEARNED TO MOVE FAST AND BREAK THINGS

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By Nick Mills, EMEA GM, CircleCI

 

The UK is famous around the world for its financial technology ecosystem.

Britain’s FinTech sector received $1.1 billion of investment into 77 startups in the first quarter of 2020, with investment growing 63% from Q4 2019 due to several large deals early in the year.

This investment is being pumped into a wide variety of startups that are really shaking up the financial system with new ways of working – providing businesses and customers with faster, better, and more innovative solutions in areas as varied as payments, savings, security, investment, loans, financing, insurance, remittances, account information analytics, banking infrastructure and more.

Open Banking has been a catalyst for all this, of course. The European PSD2 legislation has allowed banks and startups to use APIs to talk to one another in new and exciting ways.

But so too was the Financial Services Act 2012, which streamlined the process for licensing new banks, as well as the 2010 Government’s “Tech City” plan, creating investment and policy that laid the foundations for the innovative tech ecosystem we have today.

And it’s businesses within it, like Monzo, Starling and others, that have been pushing themselves to take advantage of these opportunities and bring exciting new products to customers.

This is also reflected in the levels of investment in some of the most thrilling innovators. The $500m raise Revolut recently completed proves that the fruits of this brave new world are only just now beginning to fully ripen.

Britain’s global advantage has no doubt been aided by an incredibly high level of productivity in the UK tech sector as a whole. For software teams using CI/CD workflows, we are able to measure productivity using a metric called Throughput – which is essentially the number of times per day the average software team pushes new code.

On this scale, the UK is almost twice as productive as the global average – and, interestingly, more productive than European counterparts in both Germany and France.

But there are, apparently, some downsides to having such a productive, world-class financial technology ecosystem.

New data released recently in our 2020 State of Software Delivery report shows British software developers are more risk-averse than their counterparts in the US.

More specifically, the success rates of UK developers were very high. This may sound positive – but in software development, too much success often indicates a lack of innovation.

Failure is critically important. As in life, if your software isn’t ever failing, then typically you aren’t trying enough new things.

In the UK, the average success rate for code testing shown in the data was 94.7%. In the US, it was just 83% – proving the old adage true, that in Silicon Valley they really do move fast and break things more often.

So where might the UK’s apparent innovation handbrake be coming from?

It’s likely that Britain’s finance-heavy technology ecosystem could actually be hindering efforts to innovate.

Finance is, by necessity, a regulation-heavy industry. And one of the reasons British fintechs have been able to succeed so quickly is the fact that they’ve been able to deftly navigate the choppy waters of financial legislation whilst still providing new, improved customer service.

But this does come at a cost. Other areas of technological innovation don’t come with quite so many strings attached. US tech giants like Facebook and Google have created new industries, sailing through uncharted waters – where legislation can barely keep up.

This allows them to try new things and fail without any serious legal recourse. The same can’t be said of Britain’s fintechs, as every new product release has to be carefully scrutinised by regulators.

When faced with this harsh reality of developing in finance, it is perhaps unsurprising that the UK tech sector is both highly productive and risk-averse. Both attributes are necessary to keep churning out new ideas in a tough industry.

But constant creativity in such a competitive industry is hard. The problems needing to be solved tend only to get more difficult as the industry matures. The nation’s innovators will soon have to find ways to shorten the innovation cycle and fail faster.

And a key part of improving this innovative mindset over time is to look at the types of process the nation’s developers are using.

Workflows have come a long way from the staccato “waterfall” methods we may once have been used to – where projects are mapped out into distinct, sequential phases, with each new phase beginning only when the prior phase has been completed.

In software, that just slows things down.

Agile methodology was an improvement on this – where software is developed in sprints, with a Minimum Viable Product being created, then constantly iterated over and improved upon.

But even agile is starting to feel outdated. The most innovative organisations now work in a continuous way – with code being deployed and tested daily, and automation taking over much of the laborious, repetitive tasks that used to be required of software developers.

Now CI/CD platforms can give that time back to the developers, to allow them to spend their time doing what they do best – moving fast, breaking things, and getting the next generation of British innovation in front of customers as quickly as possible.

 

Business

OUTSOURCING YOUR IT SOLUTIONS CAN SAVE YOU FROM COSTLY DOWNTIME

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Cloud Services

Amir Hashmi, CEO and Founder of leading IT and Cloud services provider Zsah, discusses why you need full-time professionals if you want to avoid the money pits of IT downtime

 

A lot of wealthy business owners will uphold the following infamous statement – time is money. Many CEOs believe that it should be at the heart of your business strategy. They aren’t wrong, and it is no different when it comes to IT. Therefore, it is high-time that businesses consider the real risks and costs associated with IT downtime, and do all they can to avoid it

In the midst of a post-pandemic technological revolution, it’s now more important than ever to carefully consider who manages your technology. It is essentially the motor that drives productivity, efficiency and growth, and if therefore, if there isn’t a thorough and dedicated system in place, businesses risk system failure, which can risk everything.

Something so essential to a company deserves to be taken more seriously than just to deploy the services of an IT help desk when there’s a significant issue. The answer isn’t necessarily to consider ways in which you can fix a problem once it arises, but instead to ponder upon ways of preventing an issue from occurring in the first place. This is what leads us to managed IT support services: your personal, dedicated team of IT experts that not only fix issues when they occur, but that also constantly improve the software and hardware so there is less chance they ever take place.

 

The real cost of downtime

Whenever your IT isn’t functioning at its full capability, you are losing money. Even the shortest of gaps in service can severely impact the customers’ experience, your reputation, and the output and efficiency of your entire staff.

In 2017, ITIC sent out an independent survey to measure downtime costs. It found that 98% of organisations say that a single hour of downtime costs over USD $100,000, with 81% putting the figure at over $300,000. For 33% of businesses, 60 minutes of downtime would cost their firms between $1 million and £5 million.

Figures from Statista.com reveal 24% of organisations worldwide reporting average hourly downtime costs amounting to between USD 301,000 and USD 400,000, with 14% reporting greater than USD 5 million in costs.

Elsewhere, IHS Markit surveyed 400 companies and found downtime was costing them a collective USD 700 billion per year – 78% of which was from lost employee productivity during outages.

 

Managed IT solutions are the key

Though we may never know the full cost of downtime, it is evident that it costs individuals and businesses a large amount of money. Don’t wait until your next emergency to remedy a problem; get the professionals in now to prepare for the future, rather than just fix problems in the present.

When you work with a managed technology services provider, your network and infrastructure are supervised 24 hours a day, all year round. As with any IT service, this means that issues will be fixed – however the real advantage is more long-term. As technology service providers perform regular proactive upkeep, there will be a reduced chance of suffering from issues in the first instance, and when (or if) they do occur, it will be far simpler to recover data thanks to full cloud integration.

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HOW TRADITIONAL INSURERS CAN USE TECHNOLOGY TO IMPROVE THEIR RELATIONSHIP WITH CUSTOMERS

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The customer experience with insurance is anomalous, in that one is only required to engage with their insurer if things are going wrong for them. To add value to the relationship, new technology and methods should be adopted, in turn driving loyalty and business growth, writes Oliver Werneyer, CEO and Co-founder of Imburse

Oliver Werneyer

Insurance is one of the oldest industries in the world and it is still, to this day, considered a grudge purchase. Looking back, insurance has a history of having a challenging relationship with its customers. According to an IBM study, in 2008, only 39% of consumers trusted the insurance industry. This percentage has stayed largely similar over the years, having reached only 42% in 2020. For any business with growth ambitions, good customer relationships are crucial.

I believe that now more than ever, the insurance industry not only needs to continue investing in improving relationships with customers, but to really think about new ways of doing so. At a basic level, the moment of truth for an insurance customer is when either they need to pay or are getting paid. Insurers can have the best policy wording, quick claims processes, apps and advisors, but if the experience to pay premiums or to receive a claim is bad, the customer immediately loses trust.

The pandemic has exposed this tenuous relationship between insurers and its customers. The need to move everything online and provide personalised services has exposed significant shortcomings in the service insurers provide. The industry has been too slow to adopt newer technologies and move engagements closer to the customer (self-service and empowered). This is largely due to the legacy systems and processes that insurers failed to modernise over previous years.

This means that the better-positioned incumbents have stronger customer relationships and benefit disproportionately from the pandemic, as they are able to win more new customers and convert customers from other insurers. They also benefit from significantly lower customer acquisition costs and much better growth, as illustrated in this McKinsey report. Even new entrants or InsurTechs are benefitting massively by focusing on improved customer experience and customer relationships.

However, it is never too late for insurers to build better relationships with customers. The main way to build a good relationship with a client is to make life easier, live up to promises and add value through the relationship with them. By working on these key elements, insurers can start building strong relationships with their customers, and, through the right partners, deliver this in a timely and non-disruptive manner.

 

Embedded Services

Insurance products often get a bad reputation because they cost money, but the benefits might only come much later, or never. Customers don’t get to experience a positive relationship with insurance products, either because they never claim and feel like they lost out, or they claim and they’re in a bad situation. By either embedding other services into the insurance experience to deliver a more transactional engagement, or embedding insurance products into general customer experiences such as online shopping or rewards, insurers can enrich customer relationships to generate value.

This way, insurers become a value-adding part of the customers’ everyday activities and not just a product that they have to pay for and may never get anything back from. One example is to embed micro-savings capabilities, often found in banking, into pension savings and insurance products. This can allow customers to save more for pension, attract younger customers and build a portfolio of fiscally disciplined customers.

 

Tailored journeys and personalisation

Customers have come to expect personalised journeys and engagements from product providers. Streaming services, social media, e-commerce or mobility services have shaped the customer expectations. Now, customers are also expecting personalisation for insurers.

Insurers need to invest very heavily in delivering personalisation and customisation to customers as they engage with their products. Failure to deliver this puts renewed strain on the value perceived by the customer and their relationship with the insurer. This applies not only to customer interfaces, but to aspects such as payments. Insurers should make it easy and pleasant for customers to pay and get paid. As the main moment of truth, payment experiences need to work optimally.

 

Perceived customer value metrics and delivery

The value customers derive from insurance products is, generally, monetary. Therefore, insurers must invest in product enhancement to increase its perceived value. Perceived value is not tied to a monetary value. By being able to choose between multiple payment options, such as a $300 pay-out to a bank account or a $320 Amazon voucher, the customer has a higher perceived value of the payment. This can be achieved by leveraging non-insurance products that can be purchased at a discounted price, exclusive access that the customer would otherwise not have or conversion into a form that is more useful to the customer.

Payments, for collection and pay-out, are at the core of delivering this value. An excellent payment experience immediately influences the customer to be positively inclined toward a product (PwC report). In order to offer this, insurers need to leverage multiple technologies and providers, offer any speed of transaction in any market, and deliver faster automation and better risk control. The key is to transform insurance products into transactional value-adds to customers’ lives and use this opportunity to continuously build on relationships with customers.

The main roadblock for insurers is still the operational implications of these activities and the costs that arise. In looking to build a better customer relationship, insurers need to look at partners that are operational enablers to deliver this. Partners that can solve the integration and speed-to-market problem so that insurers are enabled to deliver new capabilities, not bombard them with new ideas and no path to delivery.

Imburse, for instance, enables insurers to access all the global payment providers and technologies available in any market. Through a single connection, insurers can deploy any payment capability into any channel, for collection and pay-outs, without ever again needing to build a direct operational integration to the providers. This gives them full freedom to leverage payments as a key value driver and customer experience enhancer.

Building a better relationship with insurance customers is key for the insurance industry to close the protection gap. Incumbents are in the prime position to look at Insurtech and Fintech partners to rapidly and significantly modernise, digitalise and transform their own capabilities to deliver major enhanced value to their customers.

Imburse is an advanced universal payment connector that enables businesses to gain cost-effective access to complete global payments technology, regardless of the service provider. To learn more, please visit www.imbursepayments.com.

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