The need for automation in Financial Services
An insider from Allianz Technology explains how companies in his industry use automation tools to boost resilience and enhance reporting.
Independent Journalist Pat Brans and Rainer Karcher, Global Head of Sustainability at Allianz Technology.
As an insurance company, Allianz has certain views on resilience. “A good part of resilience means having accurate predictions of major events over the next five to ten years,” says Rainer Karcher, global head of sustainability at Allianz Technology.
“Will there be more hurricane or earthquakes? Will there be migration trends—for example, people moving north to minimize their exposure to global warming?”
Making such predictions involves aggregating a lot of information, such as weather and climate data, from different sources. IT directors in insurance companies look for automation tools that help them aggregate information from different sources, and data analytic tools to interpret the information. “Human beings are not able to collect and analyze so much data,” says Karcher.
Another aspect of resilience in financial security is about protecting the organization from cybersecurity threats. “We cannot run the risk of violating confidentiality or of having somebody else get a hold of proprietary information,” says Karcher. “Automation tools help manage the processes that make a strong cybersecurity posture.”
And a third pillar of resilience is keeping services running. Allianz constantly makes sure all data is backed up and that all critical systems have a hot standby. “Resilience from this perspective means knowing which services you depend on and what systems support those services,” says Karcher. “You need a risk management plan to handle the situation where one or more of those systems fails.”
Part of that plan is to migrate the most critical applications somewhere else as quickly as possible—and with minimal disruption. This is best done with automation. While disaster recovery concepts have existed for at least twenty-five years, modern automation tools minimize the need for tedious and error-prone manual tasks.
“In one of my former companies we did these switches manually,” says Karcher. “We used an Excel spreadsheet to list the most critical applications and the order in which we would move them from one system to another.”
“We have four thousand two hundred applications operating in Allianz. Who can manage a switchover if there is an outage on a Saturday night? All of this requires automation.”
Reporting and collecting data from multiple sources
“There is a huge amount of reporting to do in Europe,” says Karcher. “The new corporate sustainability reporting directive [CSRD] comes with a total of one hundred forty KPIs which companies need to report on. There are also the supply chain due diligence requirements and plenty of other local laws that you need to comply with.”
Companies doing business in Europe have to collect huge amounts of data from partners. The data is stored in different formats, on different kinds of systems, and communicated through different channels. It’s virtually impossible to collect and interpret the data manually without making a lot of mistakes.
“Automation is becoming an essential tool in financial services because it allows companies to collect information from multiple sources, in multiple formats,” says Roger Tunnard, CEO of Ignite Technology. “When data collection is a reliable process, it’s easier to comply with regulation. An added benefit of automation is that it frees people from tedious procedures and allows them to focus on strategic tasks.”
“This is exactly where we are focusing,” says Karcher. “We want to automate as much as we can and only bring those things to the attention of people that require human interpretation. Automation grants people the freedom to focus on things that really matter.”
The interview forms part of Ignites Insights Series. You can attend the first Webinar in our series entitled Building Operational Resilience: Harnessing Automation for Business Success, by clicking the banner below.