INTERVIEW OF THE MONTH
INTERVIEW WITH MR. XAVIER S ARPUTHARAJ
Chief Operating Officer
Orient Insurance PJSC, UAE
1. What are the major threats and risks that enterprises are most likely to face in a digital world?
Digital world offers plenty of opportunities for an organization. Nevertheless there are a few associated threats as well as risks. Cyber-attacks, role of social media in influencing customer behavior being a few significant challenges.
Let us expand on these risks:
Today, as the use of digital channel increases, enterprises are more vulnerable to cyber-attacks. Identity theft is becoming increasingly common and has a negative impact on customer acceptance of digital channel. In the meantime, regulatory changes necessitate enterprises to increase rigor on information security, which would entail significant investments, across the business.
Social media is like a double-edged sword. Whilst it has opened up enterprise access to customers and allows for tailoring value proposition, it does come with a serious threat. Customers are able to leverage social media to express themselves and even a minor slip from the enterprise could create huge reputational risks.
Insurers to a great deal employ third party outsourced vendors and partners. These entities handle sensitive data. Addressing security requirements at these outside entities is quite a challenge.
Artificial intelligence, machine learning algorithms and robotic process automations can pose a threat to organizations’ risk profile.
Last but definitely not the least, employees’ lack of awareness of various risks associated with the digital world constitutes its own measure of threats.
2. What do you believe is the current level of maturity within enterprises to address these threats?
Different enterprises are going through varying degrees of preparedness to mitigate the threats linked to digital world. In general, enterprises see ‘digital’ along with ‘innovation’ as a strategic imperative – irrespective of the nature of business and operating model.
That said, mitigating some of the threats are hindered due to issues like legacy technology platform, lip service to customer-centricity and insecurity amongst employees.
Organizations that have a comprehensive program of change, underpinned by employee-engagement, customer-engagement and investing in the right technology are lot more mature in dealing with these threats.
It is important that enterprise have a strong linkage between strategic imperatives and internal operating model encompassing people, process and technology, to mitigate risks and gain upside from investments in digital capabilities.
Many organizations have multiple prevention systems and processes. However not all have built in ring-fencing such as incident detection rapid response capabilities for the unknown attacks. Said that, there is an increased awareness and understanding of the risk by the enterprises. It is a board level agenda as well and they are indeed getting the required attention.
3. How should enterprises assess their risks and lay out a path forward to improve their resilience?
Enterprises, need to, at the outset have a clearly laid out strategy to improve their resilience. Focusing on a sustainable long-term strategy is key and not just resorting to knee-jerk reactions with a short-term view.
Acknowledging the threats and risks, alongside business opportunities, is an important starting point.
Leveraging best practice from other markets and organizations helps directing efforts and investments in the right direction.
Business units that are part of a large enterprise would certainly benefit from group driven practice but need to be agile and sensitive to local market nuances.
An important element of digital strategy is to have a right balance between ‘outside-in-perspective’ vs an ‘internal-focus’.
Finally, transparent communication, both internal and external, helps build and demonstrate resilience. It is important to have a robust well laid out incident response mechanism that also includes communication to customers, shareholders and all the stakeholders.
4. Do you believe that the controls that enterprises are putting in place has a negative business impact due to delaying execution of digital projects?
On the face of it, being nimble and agile is quite critical to leveraging the opportunities and benefits of digitalization. However, as I stated earlier, any digital strategy needs to be sustainable and therefore cannot be purely short-term focused.
A few organizations have adopted a phased approach viz. developing a heat-map of business opportunities and potential actions plans whilst building a foundation for longer-term sustainability.
For instance, cherry picking on a particular product or distribution channel or a particular market and building digital capabilities appropriately, with a test, learn and refine approach has been successfully used by a few organizations.
At the end of the day, digital strategy needs to make business sense and over a period of time, need to have a self-funding component. To that extent, going after the right opportunities helps enterprise succeed. Success begets success. An age old mantra for organizations that stood the test of time. Planning and execution is the key here.
5. Can you detail some of the major initiatives that Orient Insurance is doing in this space and how it has benefitted you?
Our digital strategy is to support business growth and customer centricity. To this end, our leadership has developed appropriate strategies and invested in capital build.
We continue to focus on key areas such as regulatory compliance, channel diversification for sales and service, constantly energize our internal operating model. Our internal operating model essentially concentrates on enhancing our people capability, process improvements and technology modernization.
We adopt a holistic approach towards our business underpinned by digital strategy. We constantly challenge our own traditional business models and have embarked on a journey towards being less paper-based.
We constantly strive to leverage transformation technology such as digitalized sales, easy to use web enabled platform and data analytics.
Employee engagement and involvement in driving our digital strategy has proved to be a sure recipe for our success. We are experiencing exciting, challenging and interesting times.
