Technology Helps Insurers Manage Regulatory Compliance
As Australian insurers’ compliance burdens increase, technology can enable them to streamline compliance processes.
The Financial Sector Reform (Hayne Royal Commission Response) Bill 2020, which was passed by both houses of the Australian parliament in December 2020, introduces a raft of new regulations, including provisions for financial services industry codes to be enforceable, with breaches attracting civil penalties.
The legislation follows a comprehensive review of the banking and financial services industry by Commissioner Kenneth Hayne, which shone a spotlight on the insurance industry, along with other finance sectors.
The onerous compliance requirements included in new bill coincide with the introduction of the Australian Securities and Investments Commission’s Regulatory Guide 271 (RG 271) Internal Dispute Resolution (IDR).
RG 271 requires insurers to leverage technology and data analytics to improve the IDR process, including:
- increased capture, tracking, analysis, and reporting of complaint data
- improved timeliness and efficiency
- enhanced quality of written communications and IDR responses
- strengthened complaint management skills, and
- organisation-wide accountability for complaint management.
While the compliance burden is heavy, low-code/no-code platforms are becoming popular in the insurance industry and enable insurers, underwriting agencies, and brokers to meet their regulatory requirements more efficiently.
Insurers must be RG 271 compliant by 5 October 2021 and can reach that deadline by adapting existing legacy technology. However, the milestone can be achieved more easily and cost effectively with low-code/no-code technology, which can integrate to legacy platforms, where required.
The beauty of low-code/no-code platforms is that high-level IT skills are not required to implement them. Business users can employ a modern technology stack, drag-and-drop components, and model-driven logic via a graphical user interface, to build robust, reliable applications to meet their immediate business needs.
It’s a simple solution for a complex problem.
Apart from enabling insurers to meet compliance requirements, low-code/no-code technology can also assist with a range of operational tasks to increase business productivity.
By leveraging low-code/no-code platforms, insurers can accelerate system modernisation to create digital applications as part of the company’s overall IT ecosystem. That ties in well with companies’ legacy modernisation strategies.
The technology promotes democratisation of software development, enabling insurance business users to deliver, control, and manage what they need.
The focus is on actual business needs rather than the mechanics of software development.
Stephen Browne is the vice president and country leader – ANZ at Xceedance.