The insurance industry is facing a number of challenges, including the rising cost of claims, the need to comply with regulations, and the increasing competition from digital native insurers. In addition to these challenges, many insurance companies are also struggling with legacy systems that are outdated, inefficient, and costly to maintain.
Legacy systems can pose a number of risks to insurance companies, including:
Increased costs: Legacy systems can be expensive to maintain and upgrade. This can lead to higher operating costs, which can impact the bottom line.
Reduced efficiency: Legacy systems can be slow and inefficient, which can lead to delays in processing claims and customer service. This can frustrate customers and damage the company's reputation.
Increased risk of fraud: Legacy systems can be more vulnerable to fraud, as they may not be equipped to detect and prevent fraudulent claims. This can lead to financial losses for the company.
Compliance challenges: Legacy systems may not be able to meet the latest regulatory requirements. This can lead to fines and penalties from regulators.
In order to mitigate the risks posed by legacy systems, insurance companies need to take steps to modernize their IT infrastructure. This can be a complex and challenging process, but it is essential for the long-term health of the business.
Here are some steps that insurance companies can take to modernize their legacy systems:
Assess the current state of the IT infrastructure: The first step is to assess the current state of the IT infrastructure. This includes identifying the legacy systems that are in place, as well as their strengths and weaknesses.
Develop a modernization plan: Once the current state of the IT infrastructure has been assessed, a modernization plan can be developed. This plan should outline the goals of the modernization project, as well as the steps that need to be taken to achieve those goals.
Implement the modernization plan: The modernization plan should be implemented in a phased approach, starting with the most critical systems. This will help to minimize disruption to the business.
Monitor and evaluate the results: Once the modernization project has been completed, it is important to monitor and evaluate the results. This will help to identify any areas where the modernization plan can be improved.
Goavega's Fintech Case Study: Modernizing Legacy Systems for EMI Reconciliation and Loan Payment Transactions
Overview:
n the realm of fintech, Goavega undertook a pivotal modernization effort for a client aiming to automate EMI reconciliation and Loan Payment Transactions (LPT) – formerly a manual processes. This case study presents how our innovative approach transformed their operations, yielding exceptional outcomes.
Challenge:
The client grappled with manual EMI reconciliation and LPT processes, leading to inefficiencies and scalability limitations. They sought an automated solution to modernize these legacy operations.
Approach:
Goavega's experts comprehended the existing processes and outlined a technical solution specification. Leveraging a serverless/event-driven architecture, we automated data collection, processing, and upload to Salesforce. Master files were created in the cloud for accessibility via AWS Athena.
Results:
The impact was remarkable:
100% automation achieved for EMI reconciliation and LPT processes.
Enhanced efficiency – a task that previously required a 5-member team's full-day effort was now completed in just 15 minutes.
Process could be run multiple times, any time during the day.
The solution demonstrated its scalability by efficiently handling a 10x increase in transactions.
Modernization Achieved:
Through serverless technology and process automation, Goavega's modernization initiative not only transformed legacy EMI reconciliation and LPT processes but also optimized them for efficiency and scalability, setting the stage for broader back-office automation.
Conclusion
Legacy systems can pose a number of risks to insurance companies. By modernizing their IT infrastructure, insurance companies can mitigate these risks and improve their long-term prospects.