Transforming legacy into digital
If you want a local example of long-lived corporate success, there are few as good as Old Mutual. With a major focus on encouraging us spendthrift South Africans to save for a rainy day, Old Mutual plays in the retirement, life insurance and wealth space, among others. Proudly flaunting its long heritage, the organisation is characterised by a steady and conservative mindset and focus on the long-term future. It would seem an immense task, technically and culturally, to transition it to a modern, tech-savvy player. Chief digital and data officer Vuyo Mpako describes that mission as trying to transform a `175-year-old elephant to feel like a startup’.
With nearly two centuries of history, the company obviously has well-established processes and approaches to its operations. “There are certain ways we think about resources and make decisions, and we have a massive face-to-face distribution.”
Over the years, it has built a South African customer base of six million, with a further 12 million in 14 countries across the continent, and a stable balance sheet.
Mpako says that the core business is essentially run by accountants and actuaries. This focus has resulted in traditional approaches to client engagement, face-to-face meetings with advisors, call centres and branches, as well as a disparate app and data estate.
“In the traditional way we've done business, we’ve ended up with different propositions, only sold through different channels in the face-to-face world. The way the different products were structured made it difficult for the sales team to sell them, so rather than get it into a particular sales channel, we'd create a new one. That meant each business would ask for an app to add, because they hadn’t thought about the aspects underneath.
“We have separate divisions in our group, such as personal finance, insure, wealth, but if the difference is only colours and imagery, we don't need 20 different apps on the app store.”
The focus for Mpako is to create a more coherent digital estate. However, to achieve that, there’s a requirement to transform aspects of the business to leverage the data inside and then make services more accessible and personalised for customers, as well as leverage capabilities from group subsidiaries, such as 22Seven, to start creating a full portfolio for each customer.
Mpako says thought has to be put into the digital transformation of the customer journey. “How do we change a conversation from customers going to a branch or call centre to do simple basic things, such as view policies, make a disinvestment, track their goals, or talk to an advisor. We should move to a situation where a customer can make the changes themselves or see their entire financial position, not only Old Mutual, but across all the financial institutions, in one place. Those features will gradually start coming through (in our apps and sites) on a quarterly basis.”
Data at the heart
To realise this ambition, Mpako believes that he and his team have to build a digital Old Mutual that's running parallel to the legacy one.
“The things from legacy don't change often, but you need to sync to them. And those things sit on databases, so it’s a deeper core, then there’s the extract, transform and load (ETL) guys lifting stuff to the cloud. Once you’re in the cloud, you can do whatever you want outside of OM.”
To get to that state, much customer data has to be centralised, and Old Mutual has been working on that, but its long heritage has proven a hindrance.
“In the legacy conversation, you need to be able to access the data, and know how the data was constructed and categorised; for example, what’s called a 'premium' in one business might not have been called the same thing in another group business. You need the people who built the systems 20 to 30 years ago, you want that insight, because it’s valuable, and differentiates us from a startup. However, those people come with solutions from 30 years ago, and that thinking is also one of the things that can hold you back. Even if you give people access to the latest technologies, how they think about it is in the context of the constraints they had 30 years ago. There is a reason we built ETLs; we didn't have enough bandwidth at the time. Cloud has removed those restraints, but there’s still a way of thinking about new tech in the way we used to – AWS has simply become another datacentre. A lot has to change in how we think.”
A lot of research now says the future of insurance is bionic, meaning the tech is critical, but the last mile requires face to face.Vuyo Mpako
Old Mutual is strategically focusing on AWS for its data and online properties, and Mpako claims it was one of the first local financial services companies to adopt the AWS tech stack, when it did in 2018. “All the USSD, WhatsApp or mobile apps, new websites across the African operations are all run on the AWS cloud. We've started making strides of getting all data uniform across the various digital areas, such as money account or short-term insurance.”
The past couple of years have also seen changes in how Old Mutual has gone about assembling the right resources and creating solutions. “We've started building cross-functional teams, with data scientists, UX designers, software engineers. As we build up data science and behavioural economics, we're also learning that there are models and software that does stuff for us. Two years ago, we'd spend three to four months building a predictive model. Now it happens in an hour, because we take all of our data and put it in the cloud, with tools like Data Robot, which can give you 100 models to choose from.”
An Uber example
Given the scope of products that Old Mutual offers, and the fact that it has a presence in 14 countries in Africa, Mpako has taken inspiration from Uber. Namely, a single global platform with different services offered depending on location.
“With Uber’s go to market, you download one app, but it gives you different services, even in different cities in the same country, for example Uber X isn’t available in Durban, but is in Joburg. Then in Dubai, you can order an Uber helicopter, and in Tanzania, you can order an Uber daladala. There's a global platform that's responsive to the products and needs of customers in different territories.”
The upgraded websites are being gradually launched over the course of the year, with Ghana and Nigeria due to be up by year end. The mobile app was launched in South Africa in May, and Zimbabwe and Kenya are next on the plan for that.
The personalisation doesn’t just stop with location, though; Old Mutual is building products that are more suited to the individual customer. Using Genus AI, it has created eight customer archetypes, such as fortune seeker and opportunity seeker; then, the customer’s known profile data can be supplemented with that from third party sources, such as social media.
“Each archetype has a couple of characteristics, but we can also start to make predictions not only on the archetype grouping you're in, but on you as an individual. Two customers could be in the same segment, but actually very different, and to determine that we're trawling third party data.”
The messaging and imaging can then be customised to better suit the individual, he explains. “In our next version of the app, what today shows as the same static image everyone sees – a Brixton tower image – will be personalised to the individual.”
But of course, the real value from a financial services company is not that they show you a picture of Table Mountain rather than a building 1 400 kms away. Mpako says Old Mutual is going beyond that to create a hyper-personalised experience. “Individualisation, making the app your own individual app, about your goals and need. We're doing that with 'My Goals'. So, for example, with our education policy, we ask which school a customer is looking to send their children to, then provide an update of the fees levels at that school, rather than a blank standard education plan. Then we can automatically monitor how the fees at that school are changing, so the customer can track how their goals are performing, and, if they want to act on that, you can click to speak to an advisor.”
And what of the future of the financial advisor? If we can all serve ourselves through an app, do we really need them?
In the insurance industry, especially life insurance, the role of the advisor is critical, says Mpako. “A lot of research now says the future of insurance is bionic, meaning the tech is critical, but the last mile requires face to face.”
You could argue there's a lot of complexity built into product design. But, says Mpako, Old Mutual has found that even an understanding of the underlying economics of Tax Free Savings Accounts have confounded many people.
“In the foreseeable future, we believe the roles will change. It's not getting rid of the advisors, but ensuring they add a lot more value. They shouldn't be preparing for days on end to do an annual review. And why should it be an annual review? It's regulated like that, but it could be a much quicker and more frequent review as and when you need it.”
In a world of stability, heritage, legacy and tradition, building a parallel digital Old Mutual requires this kind of questioning and challenging of the long-established norms.