Viva la revolution: redefine your world
When one looks at the insurance industry as it is today, one struggles to think that the whole concept of insurance came from humble beginnings on the docks in London. This is the nature of the world. Change is so rapid that it is hard to think about how business was done in a world where there was no technology. The internet ushered in an age where connecting with people across the globe can be done in an instant, and social media has expanded on this where whole communities are bred and cultivated online.
The winners and losers
We are currently in the midst of the Fourth Industrial Revolution which deals specifically with the advancement of technology. This is having such a pronounced impact on business that it was a topic of discussion at the World Economic Forum which was held at Davos earlier this year.
How we adapt to this change will determine whether we push ahead in this revolution or whether we fall behind. Speaking at the Annual Institute of Risk Management South Africa Conference, Vincent Vandendael – Director of Global Markets at Lloyds of London – explained why adaptation needs to take centre stage.
“One of the primary forces driving change in the world today is that the global economy is going through a digital revolution. Statistics show that by 2030, there will be over 500 billion connected devices in the world. If we look at the world today, it is hard to realise that we produce over 2.5 quintillion bytes of data a day and that 90% of the world’s historical data was created in the past two years,” said Vandendael.
In threats comes opportunity
The way in which the world has become connected through technology has had a pronounced effect on the world’s job market. Vandendael pointed out that statistics show that two thirds of South African jobs are currently being threatened by technology and will continue to be threatened over the next two decades.
Reflecting on the changes associated with the Fourth Industrial Revolution, Klaus Schwab – Founder and Executive Chairman of the World Economic Forum – said that there has never been a greater time of opportunity or threat.
While there are a lot of jobs that are being threatened, there are new jobs which are being created every day. A number of reports point to the fact that jobs exist today that were not around ten years ago.
Redefining wealth
In a world where tangible assets are making way for intangible assets, coded money is increasingly becoming the currency of the world. The growth of Bitcoin and Blockchain are perfect examples of this.
Technology is redefining wealth in another way. The growth of M-pesa across the African continent now makes it easy, convenient and cheap for people to send money to their loved ones through the internet. “Gone are the days of expensive international money transfers where the costs of a transfer were significant in some cases. From humble beginnings in Kenya, the service has spread across Africa and sees individual transactions worth almost $2 billion being done through the service on a daily basis,” said Vandendael. In the coming years, similar transactions could equate to 50% of the Gross Domestic Products of certain countries.
The key question
The key question intermediaries need to ask themselves is how they will adapt to change and how they will define themselves in this new world.
Social media is the obvious avenue of opportunity. Millennials are a new breed of clients that look for instant gratification, personalised service and a business partner who is knowledgeable and is able to interact with them on their terms.
One thing that is not scarce in today’s day and age is information. Before even meeting with an intermediary, clients are researching products on the internet. Using social media as a platform to establish yourself as a reliable source of information by writing opinion pieces explaining products in a way that people understand could benefit your business.
Intermediaries will use client information collected through online interactions for several different reasons, such as building relationships, offering advice, and evaluating the client’s risk profile. This same information can be used by brokerages to determination fee structures and risk pricing.
Editor’s Thoughts:
Reinvention is not easy, but it is also not impossible. The key to change is to see technology as an opportunity rather than a threat. There is no space for a head-in-the-sand approach. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.
