The challenges of democratising data
The modern digital world is awash in data, but understanding and parsing that data has until now been the task of specialists. The challenge for insurance companies seeking to move to data democratisation is to make that data available, understandable and usable to non-specialists.
What is Data Democratisation?
Data democratisation is a worldwide move toward enabling everybody in an organisation to be able to work with data, no matter their technical proficiency. If all employees are empowered to work with and make data-based decisions, organisations can build better customer experiences.
Challenges for the Insurance Industry
Perhaps the biggest challenge facing insurers trying to democratise data is a dependence on legacy and proprietary systems.
More often than not, legacy systems only store a limited amount of data, and that data is often difficult to extract. Compounding the issue further, legacy systems frequently run on in-house specific, custom software that lacks the capabilities and in-built agility to share, parse and communicate with other systems; be they internal or external. This severely limits the ability of many insurers to use the data they already have in an effective and actionable manner, and all but closes the door on allowing an insurance company to process additional data at the non-specialist level.
Too many systems
Insurance companies often run a multitude of systems that lack external integration capabilities. This makes it exceptionally difficult to collect, store and analysis data in a single repository accessible to the entire business.
In much the same way as diamonds require extensive polishing and refinement to make them attractive to buyers, data too needs to be cleaned, structured and refined to be truly valuable to businesses and usable in a way that brings benefits to both the business and the customer. With unstructured data, insurers are forced to implement the additional step of extracting any data that can be used. Fortunately, big strides are being made toward the advancement of technological solutions that will alleviate some of these challenges, such as we see with the evolution of AI and text mining.
Data may be invaluable to the long term prosperity of insurance providers, but to truly harness it demands significant investment. Broadly speaking, the costs are two-fold. Firstly, gathering and aligning all data from various disparate systems is the biggest cost challenge, and secondly, to distribute the relevant data to all appropriate users. To justify such a big investment requires a clear business case. However, building such a business case can be a challenge in itself, because it is hard to accurately predict the near term outcomes and gains for the business and the exact timeline for optimising the data into usable information.
Access for all?
A final point of contention, and one that perhaps requires a shift of thinking at the highest levels of business, is the accessibility of that data across the entire spectrum of a company. Who gets to access the data – everyone, or a select few? To truly become data democratic, insurance companies need to embrace the former.