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After focusing for several years on projects supporting regulatory change, insurance firm Standard Life is back on the innovation track.
Chief information officer Mark Dixon is leading an agenda that has digital and analytics at its heart and uses smaller suppliers to help. Dixon is also preparing the IT team to respond faster to projects driven by new regulations.
“It is fair to say we had an innovation delay, but that’s fine because that’s starting to happen now – you’ll see more and more of that appearing over the next 18 months,” Dixon tells Computer Weekly.
“This situation has been true for everybody in the industry – we’ve all been bogged down by regulatory change. But we’re starting to see a hiatus of regulatory change, which allows us to do innovation,” he says.
“I’ll be doing work with big companies, as you’d expect, but I’ll also be partnering with smaller companies to bring in more agile and innovative systems. It’s not one size fits all when it comes to the IT strategy,” he adds.
Improving the digital experience
According to Dixon, enhancing customers’ experience across the company’s online channels is a key priority for 2015. This is supported by additional work focusing on data analytics.
“There are very few great digital experiences out there. When you do come across one, it’s usually quite a surprise, so we are trying to do something different,” says Dixon.
“The single-view customer data and the quality of the information we get from our customers is important because – if you add analytics – it allows us to make useful suggestions. We don’t want customers telling us something we should already know,” he says.
To illustrate a project that combines web and analytics work, Dixon cites an online planner created to support pension flexibility changes enforced in April 2015, which allows consumers to take as much cash as they like from a defined-contribution pension, with no obligation to buy an annuity.
“We don’t want customers telling us something we should already know”
Mark Dixon, Standard Life
The customer’s communication channel of choice is no longer the telephone or post, according to Dixon. So the IT team’s goal was to deliver a web-based tool that could help customers understand what was possible under the change in regulations at their own leisure, without having to go to an independent financial advisor.
“The pension changes in April were interesting because we had no idea how customers were going to behave, how many were going to turn up or whether they were going to take all the money out – that was all unknown,” says Dixon.
“So we developed some online tools to help customers make those decisions, putting education out digitally. That allowed us to understand how customers interacted with us online and anticipate what kind of demand would come in,” he said.
A collaborative reform
To assist with the required changes in development, web design and testing, Standard Life used its primary partners Tata Consultancy Services (TCS), Accenture and IBM, in addition to True Office, a New York-based firm that develops analytics-powered compliance training games.
“True Office helped us perceive how a customer understands our products and interacts with our website to then develop a completely different way of engaging the customer. The web statistics speak for themselves and the results are hugely impressive,” says Dixon.
The online dashboard to inform customers about pension flexibility changes was an indicator of where Standard Life is going next in terms of putting education out digitally and understanding how customers interact with the company, according to Dixon.
“We want to have great analytics – and as much as possible – in a straightfoward way. The depressing thing about big data is there’s an awful lot of hype. I understand what people are doing and it’s quite depressing,” he says.
“That’s why we ended up working with a small boutique company to help us on our big data initiatives, rather than one of the bigger companies,” he adds.
On other corporate systems, Dixon says Standard Life will be making more use of cloud computing in the future and is looking at adopting tools such as Microsoft Office 365. Dixon says shift is “inevitable”, but concedes that cloud adoption is not a priority area as there are other technology projects, such as improving the online customer experience, that are “much more important”.
According to Dixon, major regulatory projects, such as the retail distribution review (RDR) he had to steer since becoming CIO in June 2011, were his “baptism of fire” and consumed most of the company’s IT resources at the time – at one point, there were more than 1,000 people involved in the initiatives.
“The main challenge was to help guide those projects through because large programmes typically fail. We wanted both pieces of key regulation to go in, as it would be embarrassing for us to be late or to fail, given that we were advocates of the regulation change,” he says.
“To give a sense of the scale, two of those regulatory projects together occupied about 70% of the total IT spent, which is huge by any stretch of the imagination,” he adds.
Mark Dixon, Standard Life
According to Dixon, those projects introduced a different managed testing approach and organisational structure and a new way to handle large regulatory projects.
“Nobody in their right mind could do all of that at once – that’s the world I inherited. After that went live, we had the other piece of regulatory change [on pensions flexibility], which came along earlier in 2015,” he says.
“Both the RDR and the pensions reform were signposted for some time by the regulator. The industry had many years of advance notice that this was coming along. With the changes that happened in April 2015, we were only given a few months’ notice by the regulator,” he says.
Despite the challenges, the way of dealing with such projects has improved substantially, says Dixon. In the future, a key area of focus for Standard Life’s IT team will be to become more agile so other projects in areas such as innovation are no longer affected.
“If more regulatory change is required in shorter timescales then what we can’t do is take longer to deal with it. We have to find ways of doing things quicker,” he says.
According to Dixon, part of the process of becoming more responsive is understanding and analysing the factors that slow projects down, but sometimes it’s all down to architectural complexities and inherent inefficiencies that need to be engineered out.
“It’s all about going around the whole architectural area and being obsessed about what causes the architecture to generate work. Then you look at development processes and tools,” he says.
“In the past, I would have done the second part first, but what I’ve learned is if you get obsessed about the kind of organisational model and tools without addressing some of the architectural aspects and modernising the systems, you’ll end up limiting the efficiencies you can gain,” he says.
Dixon points out the requirement of executing so called “big bang” projects – where one set of systems from a single supplier need to be implemented in one go – is giving way to technologies that can be progressively introduced.
“It’s easier to buy into because I’m committing in small chunks and I get something back straight away. Saying you don’t get any benefits until you get to the end makes it much harder to justify than transforming things individually and incrementally,” he says.
Small is beautiful
While Dixon is enthusiastic about smaller companies contributing to what Standard Life is doing in IT, he believes in a different approach to what the insurer used to do years ago, when it attempted to create an ecosystem of small companies in the financial technology sector to drive innovation.
“I’ve been to sessions facilitated by partners where there’s a showcase for people to come along where you’re with other companies. But there’s an awful lot of companies that offer something that looks no different to what I’ve been offered before,” he says.
“I’ve also seen a large rise in companies pretending they have trendy, new web development shops that all seem to be in some part of London in pristine, white offices that look like an Apple showroom for young men with beards.
“But when you ask them to show you what they have done, it’s not anything really interesting. In fact, you have to kiss a lot of frogs before you find something exciting, so I end up rejecting around 90% of the companies I see,” he says.
Mark Dixon, Standard Life
However, this does not mean Dixon’s door is completely shut to innovative ideas and companies. Standard Life is still searching for companies that can support its objectives, but help from partners to do that is crucial.
“Accenture is very good in helping to filter stuff out. When you find the right small company, there are quite often similar, like-minded companies you can use, so we use them to sort of network. Finding the right companies with the right stuff is not easy, but that’s a key part of my job,” he says.
Another core aspect of Dixon’s role – and one of his key challenges – is helping to drive technology-enabled change by adopting a different kind of mindset.
“The development of strategy and successful implementation requires inside-out thinking, finding ideas from other industries or other countries and bringing them in, rather than only coming up with ideas we’ve thought of ourselves, which is where smaller companies come in,” says Dixon.
“I’m very lucky I’ve got a boss who expects me to be right up there at the beginning of the discussions, not midway through or at the end. There isn’t much organisational change not IT-led or IT-facilitated. It all boils down to ensuring you are part of these conversations about change, rather than just being some passive order-taker,” he says.
Read more about financial services CIO interviews
- Mark Foulsham, group CIO at insurance firm esure, is overseeing an IT transformation plan he hopes will help future-proof the business.
- Asset-management firm London & Capital shifts its focus to systems that add business value, says CIO Glenn Murphy.
- CIO of insurer Liverpool Victoria, Richard Warner, sees many technology trends that need to be addressed.