EPAM Leaders Discuss How Innovation Will Impact The Future For The IFS Industry
Global information technology (IT) company EPAM has 10 locations in the United States, two in Connecticut. Since its founding in 1993, the company has been taking a leading role in innovation and technology.
Chris Michaud, Head of Innovation and Experience Consulting at EPAM Continuum and Benjamin Steele, Head of Insurance, North America at EPAM Systems spoke with MetroHartford Alliance Content Manager Nan Price about how advances in technology will affect the future of the insurance and financial services (IFS) industry.
NAN PRICE: Tell us a little about your company and its relationship to the IFS industry in Connecticut.
CHRIS MICHAUD: EPAM is focused on helping companies evolve and go through digital and business transformation. The IFS industry is an important vertical for us that’s growing very rapidly. The connection in Connecticut is a key strategic hub for that industry, which is why we’re focused here.
BENJAMIN STEELE: IFS has been one of our largest industry sectors in terms of overall revenue growth. As we looked at our portfolio within North America, as well as globally, and all the customers we’re working with, where are we looking to grow? Obviously, The Insurance Capital of The World is a great place to start and have a presence, given not only the customers here, but also the talent that comes with the insurance marketplace.
When you look at the hotbeds for people who understand insurance—the business, the technology, and the surrounding InsurTech communities—there aren’t that many areas that have what Hartford has. Hartford has the industry heritage. It’s got great technology capabilities in terms of the resources within the area and talent. And it’s got a good InsurTech community that bolsters all of that. It’s one of the reasons EPAM targeted the investment and finding more resources within the Northeast collectively to help build that out.
NAN: Chris, you had mentioned digital transformation. What trends are on the horizon?
CHRIS: EPAM has an internal team that works on trends. We’re constantly observing how behaviors are changing in the marketplace and how businesses are changing in response to those behavior changes, and then helping our clients stay ahead of those trends.
Specific to insurance, over the last year and a half, there’s been a dramatic reduction in the risks people are taking—both on the consumer side and the business side. There’s been a big global disruption in the world, and the natural response is to retrench and hunker down a bit.
Some of the leading organizations have chosen this time as an opportunity to invest and leapfrog, but for the most part, people are trying to hold onto savings. They question some of the risks they used to be willing to take, whether it’s going on a trip or going into the office—fundamental things.
As we’re tracking these trends, we’ve seen a remarkable reduction in risk. For example, in the height of the pandemic, we saw some insurance policies giving consumers money back because they weren’t driving at the same rate.
We’ve also spent a lot of time thinking about the new emergent risks affecting our lives on a more frequent basis. Two of the big ones are cyber risks and environmental risks, which are challenging for insurance companies to model properly because they’re difficult to predict.
If you think about the insurance industry, it’s typically been an industry that uses historical paths to predict the future. The more historical path data is available, the more comfortable it is to predict the future. And that’s in flux from a technology standpoint. Now we have to use real-time data and the shorter durations are changing to help us predict the future more accurately. There’s a mind shift change, as well. And, obviously, data and approaches to new modeling have a big impact too.
That brings me to the third big shift we spend a lot of time talking about with our clients. With the rapidly expanding amount of data available and the rapidly changing landscape from consumers behaviors to emerging risk, how can we create more intelligent, more tailored products going forward? That includes business-to-consumer and business-to-business. We see it in some markets, but we really think that’s the future.
So, when we talk about transformation, it rolls all those things together. How are consumer behaviors changing? How are new emerging risks impacting businesses? And then what do we do with the rich data we have to help us collectively create the right intelligent, tailored products for the market?
BEN: The interesting thing about the pandemic is that it’s been a tremendous catalyst for the industry as a whole, forcing companies and their customers into the digital era, whether they like it or not.
It’s pushed organizations to transform their technology and how they conduct business. Some of the trends today will continue to persist into the near future, including business process improvements and intelligent automation, integrating new digital capabilities into core infrastructure, moving from legacy to modern cloud-based platforms, leveraging data and analytics, coupled with better security, to provide better service and products for customers.
I don’t look at these as trends, I look at them as necessities. Those companies that can transform faster benefit from a first-to-market type of advantage. But, over time, that starts to become more commoditized as everyone will have predictive analytics or achieved a level of efficiency from their IT organization so they can do things faster and cheaper and compete in their markets.
One trend we’re seeing more and more is a growing focus on talent and the employee experience. It’s difficult to attract and retain the talent needed to build, manage, and operate these new capabilities in data, digital, and modern platforms. Competition for talent is high, employees have different expectations of their employers and they want to work with companies that embrace the latest and greatest technologies, as well as a culture that fosters continuous learning, flexibility, and nimbleness.
So, we’re helping many companies transform their people along with their technology and operations advancement. Together, this is truly allowing organizations to try new things, get into new markets, understand the different types of risks, introduce new products, and interact with customers more easily.
CHRIS: A big part of this too, is the millennial generation. It’s now the majority of workforce here in the United States, which is significant. It’s the first digitally born generation and it’s impacting every industry. Their expectations for what work should be like are dramatically different.
Millennials’ purpose is incredibly important. Many insurance companies have been underleveraging this. Insurance is a purpose-driven industry. I think there’s more that can be done to connect with the current largest generation in our workforce.
The millennial impact on all this is very significant and it’s happening at a time where we’re at the forefront of the largest transfer of wealth in the history of the world. It makes for really interesting times.