Research shows that by 2021, 95% of data traffic will be processed by cloud data centres driven by improved security and the Internet of Things (IoT). And in South Africa, new data centres by global suppliers will enable companies to broaden their ‘as-a-service’ offerings to customers. In this article, Claudette Steynberg, Product Manager at SilverBridge, explores how these services will make it possible for insurance companies to adopt XaaS (anything as-a-service) resulting in fundamental changes in the industry.
“Even though cloud computing and XaaS can hardly be considered new ideas, the way it will expand in South Africa following the arrival of the Microsoft Azure and AWS data centres will reshape the business landscape. Not only will it become more cost-effective to adopt cloud-based solutions rather than your own servers, but the improved connectivity speeds as well as compliance with South African data regulations, make it even more compelling,” she says.
Everything as one
As the name suggests, XaaS sees the delivery of anything as-a-service. And the delivery mechanism is through fast, secure, and reliable cloud access. Gone are the hardware limitations of the traditional on-premise hardware. Instead, the cloud offers easily scalable and adaptable processing that can be increased or decreased as the demand for processing power changes. Even more important in that same cloud are services that can now be reached through simple gateways that reduces the need to do your own development.
Take insurance for example.
Driven by cost-savings, product optimisation, and customer demand, an insurer today can use a cognitive service to extract information such as age and gender from identity documents. This can streamline capturing processes and reduce the risk of misrepresentation. Furthermore, this service can be extended into a cloud recommendation engine where it can discover similar customers from the existing policy book of an insurer. Based on this, it can proactively recommend additional benefits or identify better coverage.
“XaaS will therefore see the development of smaller, more customised product offerings for customers across business and consumer segments. Even better, because XaaS is cloud-based, these solutions are scalable and flexible to grow as the needs of the customer change as well.”
Even though much of the cloud is driven by data and its associated analysis, which are the main needs for insurance companies, many insurers have been hesitant in migrating too fast. This is especially the case at a time when the General Data Protection Regulation (GDPR) and Protection of Personal Information Act (POPIA) and its data privacy laws carry significant financial penalties for those in breach thereof.
The differences in data protection legislation in Africa – especially the data residency requirements – already prove challenging to multinational organisations with an African presence. And when you add on the requirements of GDPR, these challenges can become quite overwhelming.
“Fortunately, the arrival earlier this month of Microsoft’s South African-based data centres will provide secure cloud services across Africa, with the added option of data residency in the country. This will likely trigger a more rapid transition to the cloud. No longer do insurers have to be too concerned with knowing which services they use or in which data centres they lie.”
XaaS enables insurers to become faster-moving than ever. No longer will they be hindered by archaic processes. Instead, they can adapt to changing market conditions and customer requirements. Furthermore, the enhanced security integrated into XaaS should cater for even the most risk-averse decision-maker.
“Over the coming months, XaaS will become more mainstream as insurers start getting familiar with the concept and its related business benefits. And even though they might have initially been pressurised by their customers to do so, the growth opportunities to be unlocked in this new world will be too good to pass up on,” she concludes.
SilverBridge has over 20 years’ experience as a leading provider of insurance software solutions in the African financial services industry. Our footprint extends to 13 African countries. SilverBridge has introduced an enhanced service offering allowing financial services companies the opportunity to respond quickly to changing markets. With customers throughout Africa, SilverBridge has the knowledge, experience, and technology to help its clients do better business.