T EC H / T E LCO / F I N T EC H / D I G I TA L I SAT I O N / A I / M AC H I N E L E A R N I N G
Issue 1 / April 2019 / www.theinterface.net EXCLUSIVE
THE LAUNCH ISSUE HOW CHARITIES ARE MAXIMISING FUNDRAISING DIGITALLY
UNLOCKING DIGITAL TRANSFORMATION Exclusive interview with Inteva CIO Dennis Hodges, who outlines the three pillars to a digital revolution
EXECUTIVE INSIGHTS
A DIGITAL TRANSFORMATION WITH UBS
GDPR: WAITING FOR THE HAMMER TO DROP
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Welcome to the launch issue of Interface! A unique blend of exclusive executive-level interviews and thorough investigative reporting, Interface is a one-stop destination covering the digital age. This month’s cover story centres on Inteva, the Michigan-based manufacturer of automotive parts undergoing a massive digital transformation. “It was really three things,” CIO Dennis Hodges explains. “… getting more from the technology, moving costs from cap-ex to op-ex, and getting a better solution for our business.” Inteva Products – headquartered in Troy, Michigan – had to ensure that the new software, Plex, actually suited its business of supplying interior products, closure systems and roof solutions to all of the global automotive manufacturers, including, in a sign of a changing world, rising companies in China. Elsewhere, we speak to Mike Dargan, Group CIO at global banking giant UBS who details the five pillars of a successful digital transformation. We also leverage the expertise of insuretech CEO Angus McDonald of Cover Genius and anticipate the effect of GDPR with Russ Swan. We also rank the top 5 tech trends of 2019, document the rise of the chatbot and investigate how charities are maximising their fundraising through digital. Plus, we list all the top tech events and conferences from around the world.
I hope you enjoy the issue!
EDITOR IN CHIEF Kevin Davies EDITOR Lucy Dixon CONTRIBUTING EDITOR Jason Walsh CREATIVE LEAD Mitchell Park SNR. PROJECT DIRECTOR Andy Lloyd PRESIDENT & CEO Kiron Chavda
– K evin Davies, Editor in chief Content@b2e-media.com
PUBLISHED BY
CONTENTS
06 IN T E VA
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CONTENTS
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5 TECH TRENDS TO ADOPT IN 2019
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COVER GENIUS - GETTING IT COVERED
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HOW CHARITIES ARE MAXIMISING DIGITAL FUNDRAISING
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UBS – A DIGITAL TRANSFORMATION
GDPR: WAITING FOR THE HAMMER TO DROP
32 E VENTS
74 THE RISE OF THE CHATBOT
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LIST EN TO T H I S PO D C A ST on any of our output c h a n n e l s b e l ow
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UNLOCKING DIGITAL TRANSFORMATION WRITTEN BY J a s o n Wa l s h PRODUCED BY A n d y L l oyd
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INTEVA PRODUCTS, A MAJOR SUPPLIER OF INTERIOR PRODUCTS TO THE AUTOMOTIVE INDUSTRY, HAS BEEN WORKING HARD TO UNLOCK THE BENEFITS OF DIGITAL TRANSFORMATION, BOTH IN ITS MANUFACTURING AND BACK-OFFICE OPERATIONS. WE SPEAK TO DENNIS HODGES, INTEVA PRODUCTS’ CHIEF INFORMATION OFFICER… he automotive industry is in the midst of a revolution. Hybrid and electric vehicles (EVs) are threatening to displace the internal combustion engine, while other new powertrains such as the hydrogen fuel cell may repeat this disruption in due course. In addition, autonomous cars are already on the roads in small numbers, while semi-autonomous cars are more than widespread. Exciting as this might be, however, it is already yesterday’s news: we all know that tomorrow’s car will be very different from today’s. Less well-understood, though, is that the industry itself is being revolutionised by digital technologies that don’t grab the headlines as automation of the
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motor industry means much more than self-driving cars. Indeed, much work is going into streamlining both industrial and administrative processes that drive car production. Dennis Hodges, Inteva Products’ Chief Information Officer says that one of the company’s first moves was to change its enterprise
“ WITH REAL MULTI-MILLION-DOLLAR EQUIPMENT, YOU’RE NOT JUST GOING TO REPLACE IT BECAUSE THERE’S A BETTER WAY TO CONNECT TO IT” – Dennis Hodges Chief Information Officer, Inteva Products
resource planning (ERP) software to a cloud-based solution with a specific automotive focus. “It’s called Plex, an ERP system for manufacturing and a couple of other smaller verticals,” he says. Plex Manufacturing Cloud is a software-as-a-service (SaaS) ERP system and, on one level, it sounds as though the decision was simple: “It was more automotive focused and much cheaper,” says Hodges. However, the move was not motivated solely by the bottom-line: SaaS solutions may be less expensive in certain circumstances, especially in terms of reducing capital expenditure, but choice of platform will always rest on a wider business case. “It was really three things: getting more from the technology, moving costs from cap-ex to op-ex, and getting a better solution for our business,” he says. Hodges notes that many other automotive suppliers have already adopted Plex Manufacturing Cloud. In choosing to implement it, though, Inteva Products – headquartered in Troy, Michigan – had to ensure that the software suited its business: supplying interior products, w w w.th e in te r fa ce . n e t
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FLEXIBLE TRACEABILITY VIA’s premier Manufacturing Execution
System, Man-IT enables manufacturing companies to achieve un-paralleled results. Meeting OEM and regulatory demands for traceability, labeling, process enforcement, and sequencing while gaining higher yields, lower returns, greater efficiency, and streamlined raw, WIP, and finished goods inventory.
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Make it right.
closure systems, motors & electronics and roof systems to all of the global automotive manufacturers, including, in a sign of a changing world, rising companies in China. For Inteva, this results in a complex supply chain from its suppliers through the component manufacturing process to the end manufacturers and Plex Manufacturing Cloud had to be able to handle this. “We are a manufacturer of some components, and then we buy other components from suppliers. A lot of final assembly is done in-house,” Hodges explains. Despite its size, however, Inteva has been able to act nimbly in implementing a new ERP system; something auto manufacturers themselves have typically been slower to adopt. Nonetheless, Hodges says that
a drive toward efficiency in this complex process helps to meet the company ’s key goal: to keep its customers happy. “I think a lot of [automotive] OEMs (original equipment manufacturers) are still looking at more traditional [ERP] systems because a lot of them are just so much bigger. Our job is to be the nimble organisation that can supply parts to them faster and cheaper than they can do it themselves,” he says. Indeed, this is, he says, key among what Inteva brings to the table. “Certainly, I won’t say [that our w w w.th e in te r fa ce . n e t
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parts are] better [than those manufactured in-house by automakers] because I don’t think they would ever agree with that, but I think ‘faster’ and ‘cheaper’ would definitely be words that they would use in tier-ones or tier-twos,” he says. DIGITISING THE FACTORY
The notorious Takata airbag recall is one example of how supply chain issues echoed throughout the entire industry: from 2013 tens of millions of vehicles with Takata air bags were recalled due to failures following long-term exposure to high heat and humidity that had the potential to cause the air bags to explode on deployment. The recall is ongoing to this day, and a number of deaths have been attributed to the faulty airbags. As a result, traceability has become the number one issue. “ The key really comes down to the ability to [trace] – especially now the word Takata has entered the dictionar y, or at least the local vernacular as something terrible in warranty recall.” Hodges explains. This concern resulted in Inteva’s adoption of VIA’s Man-IT. “Takata, that was kind to me; a watershed in that all of a sudden we [automotive suppliers] were being asked to do traceability of parts that maybe we’d never been asked to do so much detail on before even though they [the traceability requests] weren’t necessarily safety related [in the case of Inteva’s components],” says Hodges. “Airbags, of course, should have been monitored all the way through,” he says. Inteva now has traceability of raw pellets 14
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made by plastic manufacturers as far back as its production and transportation to the manufacturing plant. Traceability is not the only issue that drove Inteva to implement VIA’s Man-IT for traceability, process enforcement, machine data gathering, precise labelling and sequencing. The simple fact that manufacturing is not such a simple business was a major factor. “It’s not only complicated because of safety regulations but 16
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it’s also very much a global supply chain,” he says. Indeed, Inteva, which traces its roots back to 1872, is itself a global organisation. Expansion in the last decade has seen manufacturing sites opened in Guanajuato in Mexico, Oradea in Romania, Zhenjiang in China and Rychnov in the Czech Republic, as well other facilities in India, China and the Netherlands. Meeting OEM and government
regulations isn’t the only benefit of using traceability systems like VIA’s Man-IT. Once the data is gathered regarding the parts, processes, people, and activities in the plant, on an ongoing basis, that data can then be utilised to improve performance. Traceability systems can drive higher yield, lower scrap, and efficiencies in machine utilisation as well as materials management. “VIA’s Man-IT system has been
critical to Inteva over the past 15 years in providing a system to manage ever ything from inter facing to production equipment, managing production lot testing to sequencing into a major automotive customer,” Hodges explains. “In the past couple of years, Man-IT has also been a real enabler for our drive into IIoT/ Industries 4.0 as the receiver of information from production equipment and bringing that into our ERP and visualisation systems.” Predictive maintenance is a major factor in the implementation of internet of things (IoT) technologies in the automotive sector, though this is obviously not an issue for, for example, trim parts and other items with no moving parts. As for its actual products, Inteva’s components include closure systems, doors, latches, actuators and sunroof motors, as well as interior trim. Even those that do include moving parts, such as latches, are designed as zero-maintenance products. “ The plan is that zero maintenance is ever required,” says Hodges. The fact remains, however, that digital technologies have already transformed what is expected from w w w.th e in te r fa ce . n e t
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DENNIS HODGES Chief Information Officer, Inteva Products
“…WHAT WE’RE TRYING TO DO IS BASICALLY IN THE ‘INDUSTRIAL INTERNET OF THINGS’ [IIOT], WHICH WE’RE WORKING WITH TO LOOK AT BOTH SIDES OF THE OPERATING EQUIPMENT”
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a car, and, with 5G wireless technology on the horizon, even more dramatic transformations are expected as cars grow ever more autonomous as part of the so-called ‘smart city’ infrastructure already planned for major urban centres. Of course, this also brings questions such as IT security to the fore. “You know, we’re an auto supplier, but looking at it from the auto side, the concern I see from an IT perspective is cybersecurity. The electrical engineers are so [focused] on what they can do that they don’t think enough about what they should do, and how to protect what they have.” As this digital transformation works its way through the industry, Inteva
is seeking to stay ahead of trends: IT security concerns will extend to locks and latches as well as sunroofs, of course, if not to interior trim. Inteva’s drive toward digital transformation does not begin and end with officebased work such as ERP systems. Instead, it extends to the shop floor. “For us, what we’re trying to do is basically in the ‘industrial internet of things’ [IIoT], which we’re working with to look at both sides of the operating equipment,” says Hodges. In practice this means working with sensors and wireless connectivity to get a live, ongoing picture of how plant equipment is performing. “An injection moulder, for example, is a million-dollar piece of
equipment, so not only do you care about the production side of that equipment, but you also care about the internals of that machine. Whether it’s oil temperature or other operating parameters, you want to start tracking that,” he explains. This way, production can be predicted according to factors such as ambient temperature and humidity levels, for example, and there are also obvious benefits in terms of predictive maintenance. “When we have a 90-degree [Fahrenheit] day with 90% humidity in Mexico, production can be up or down. We see that as a trend we can start preparing for. For example, we may know that in the summer we will want to run more shifts at night than during the day, as the temperature is cooler. Little things like that really go a long way for us,” says Hodges. Of course, little things in aggregate become large things, and this is also true of data volume. IIoT technologies typically connect tiny amounts of data, but, says Hodges, it soon adds up. “I would say that most of our data at this point is still gathered by the older traditional methods, particularly on the operating w w w.th e in te r fa ce . n e t
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“ OUR JOB IS TO BE THE NIMBLE ORGANISATION THAT CAN SUPPLY PARTS TO THEM FASTER AND CHEAPER THAN THEY CAN DO IT THEMSELVES” – Dennis Hodges Chief Information Officer, Inteva Products
equipment itself, but it is amazing. The amount of data that can be generated with 30 parameters being read every minute is not a lot of data at the time, but if you try to keep historical trends it really does start adding up to a lot of data,” he explains. THE BUSINESS OF INDUSTRY
The hard reality remains that manufacturing requires investment and equipment that has not yet been amortised and will not be replaced on a whim. However, the goal of 20
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creating greater flexibility on the factory floor is still achievable. “With real multi-million-dollar equipment, you’re not just going to replace it because there’s a better way to connect to it,” says Hodges. “We try to do things incrementally and evolutionarily rather than revolutionary.” The end result can be something of a revolution, nonetheless: with wireless added to the picture machinery can be moved around to increase or decrease production on specific lines as demand changes. “You really
THE INTEVA WAY
don’t want to hardwire anything you don’t have to anymore.” Previously, attaining this level of flexibility was close to impossible. It was also financially difficult. “You can move a line more quickly; not that you’d move a line every other day or something like that, but the ability to move it to another part of the plant without rewiring is a positive alternative to dropping $50,000 or so just to put in some more wiring. If you’re going to do that a couple of times a year or do that
for a 1mn sq. ft plant where you could be looking at doing it 10-15 t im e s a year, [previously] you were looking at throwing away half a million dollars.”
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UBS – a digital transformation Mike Dargan, Group CIO at the Switzerlandbased bank UBS talks technological revolution… WRITTEN BY J a s o n Wa l s h
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Could you tell us the five pillars to digital transformation that UBS is implementing and how you've been getting them off the ground? So, we introduced a framework for innovation or digital transformation, which were really the levers by which we achieve things, which is the A, B, C, D, E. A for AI and Automation, B for unbundling, C for cloud, D for data, and E for experience. These are really the levers we pull to try and drive the transformation. It’s also a good way for people to remember what we’re doing, and that will give the right focus to each of the areas. Now, all of these are super linked. You can only really do this if you’ve got a cloud strategy because you can operate, obviously, in a hyper-scale environment. Getting the data organised is important to drive the right experience. AI and automation is one of the biggest. We’ve been focused first on robotics or robotic process automation and moving along the value chain to try and drive AI, which can come in many different forms. The first is doing it in a very structured way, so almost like an event, and then moving into machine learning, which can be NLP (natural language processing) and chatbots. The first area of focus is really in the non-client facing space, so what we’re doing in HR is to have a chatbot. What we’re doing in technology is to have a smart bot which helps everyone when they have a technology issue. They can communicate live if they do. The computer itself will resolve issues and drive things in that way. UBS has a long heritage. 24
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“ Would we move to 100% Agile/DevOps? Absolutely not. There are certain things that we need to do with the right definition, the right analysis, etc” – M ike Dargan Group CIO, UBS
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Have there been any specific challenges for UBS in thinking about how we can move what is effectively a grand institution into a digital age? We’ve obviously got a very big team in technology and spend a lot of money. You have fintechs who are in a specific area, and therefore slightly more 26
nimble. What we’re focused on is how we drive and be agile in the technology space. I think agile is one of the most loaded and almost worst words used. It means so many things to so many people, but we almost need to reset and think about it slightly differently. What is agile for us? We want to try and get requirements into production as quickly, and in the best quality, as possible. We kicked off a
T H E D I G I TA L I N S I G H T: U B S – A D I G I TA L T R A N S F O R M AT I O N
process last year to try and drive up our automated testing. It went out at 60-70%, up from 20-30%. We also kicked off a process to have the right development tool chain process, so that we have three dev tool chains. Then developers can come in and have the right experience from day one. And then, there’s the right partnership with the business to ensure we’re working together on things.
We actually had an offsite last week, and we’ve got three or four ‘big bets’ that we want to do in technology. The first is, how do you create the right dynamic developer engineering experience so that you put as much of the testing experience and activities on the cloud, and the development itself. So, we’re talking JIRA, Jenkins and GitHub, etc. The second big bet is how do you create a common services ecosystem? We then have a marketplace for capabilities and services that offers that full spectrum of features that service providers and consumers need, in inventory, discovery, provisioning, orchestration, etc. Having the best engineering experience for our developers/engineers as possible so that it can be created within the ecosystem of UBS.
In some ways, it must be a disruptive process, so how do you communicate to the workforce that there are net benefits involved? In terms of transitioning, with regards to the technology workforce, we’re w w w. cp o stra te g y. co m
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engineer-focused with the culture more broadly. Hiring great talent is something that’s been really important, so we created hiring questions. We go above just vetting the technical competency. How do they build a strong culture? So, someone who’s accountable, collaborative, and capable of working within that environment. We also created something called a Distinguished Engineer Program which nurtures great engineering talent across the board. And then, the other big focus, especially for me personally, is the Right Learning Program. We have things focused on emerging technologies and disciplines like machine learning and cloud and data science, and we’ve signed up with Coursera to offer some of these. For instance, our most popular course at the moment is neural networks and deep learning. We are spending a lot of time supporting the managers and helping them become better managers through different programs, and it really is learning that I think helps make that step-by-step change. It’s not a scary set of changes, but something that’s interesting and, if you like, evolutionary and revolutionary for them. 28
“ the two-pizza rule; that ideally the size of a team should be that which two pizzas can serve” – M ike Dargan Group CIO, UBS
T H E D I G I TA L I N S I G H T: U B S – A D I G I TA L T R A N S F O R M AT I O N
Is learning part of keeping the staff and attracting them in the first place? We did a lot of hiring last year, partly as we looked to in-source and shift away from the vendor-based model we had. But I think the broader point is technology will continue to evolve, and it has been evolving for years, but I think it’s evolving faster and faster than ever before. I think the importance of learning and a learning culture is just critical. It’s not just for hiring, it’s also to ensure people are evolving and learning and wanting to be at UBS because we’re providing them the right experiences. I also think people learn in different ways. I personally learn best by reading. Others learn best by classroom. Others learn best by web-based training. Others learn best by YouTube or other things. We do look at all the different ways you can do this. There are tools which offer, if you like, a portal to enable people to do things in different ways. We do try and make sure there are different tools and mechanisms. I think you also, by definition, can’t make learning on broader w w w. cp o stra te g y. co m
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topics mandatory. We do have some regulatory training which is mandatory, however. But then, communication in general is difficult given the size of the workforce. We do different things. We do as much communication as possible. We run workshops, town halls, coffee corners, fireside chats. We do different digital tools, so we have a chatbot at the moment called Tell Us so that people can give direct feedback and people can vote. I personally blog a lot. I think it’s the simplest and most honest way of giving updates and personal thoughts to the team, and that may be a variety of things: personal stuff or updates or milestones or strategy or whatever. Other members of the management team do different things, such as daily or weekly webcasts or other things.
Going back to the question of agility, I mean in practical terms, what is it you’re trying to deliver? We have a responsibility to deliver the best possible technology we can for UBS, more broadly, but also to the end client. That can be 30
through waterfall or DevOps or Agile or Kanban or whatnot, but we also want to make sure that it’s done efficiently and with good quality. That is, in a nutshell, what Agile is, but it also ensures that we evolve the teams and the culture. A good setup today or in the past would have a program manager and a BA and a quant and a developer and an ops person etc. I think the skillset will become more multi-variant and integrated as we move forward, and you talk more and more about the two-pizza rule; that ideally the size of a team should be that which two pizzas can serve. We drive greater and greater efficiency by getting stuff into production. I think one can get very caught up in what we think about waterfall or Agile, but it really is having definition build, test and release as an iterative process instead of having things that are truly waterfall. I think it does decrease risk. I think it actually makes the teams from the business and technology more empowered and engaged throughout the process. I think you get better business value with that given velocity and you can adapt to changing needs as things evolve.
T H E D I G I TA L I N S I G H T: U B S – A D I G I TA L T R A N S F O R M AT I O N
I think the time to discover issues is just better in a waterfall model; you’re doing initiate to analyse to plan to build to test to release, whether that may be, monthly or quarterly releases. In some areas, that’s the right thing to do. In other areas, I’d rather have a defined build, test, release iterative approach as much as possible.
With Agile, I guess the idea is to break things down to their smallest practical level. Is that how UBS is working? If you have a long project, by definition, it’s easier to have scope creep and issues and budget overrun and whatnot. You can still have a longer project, where you know it’s going to be multi-year, defined three-or-sixmonth milestones. Instead of waiting until three years, you put defined sets of milestones or pre-release of code in every three to six months. Now, in the Agile model, that would be even shorter. But under any scenario, we wanted to make sure we do this so that you’ve got defined sets of w w w. cp o stra te g y. co m
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milestones every few months just to make sure that we’re more honest with ourselves of what’s being done.
I think with finance and banking, I think we can agree that the stakes are pretty high. Has that changed your approach to transformation? Does that not tend toward a certain conservatism? Yes, we would never risk regulatory releases or client releases. Would we move to 100% Agile/DevOps? Absolutely not. There are certain things that we need to do with the right definition, the right analysis, etc. But there are still areas where it’s appropriate and make sense to move more and more to an iterative model, and that iterative model can take different forms even in the waterfall space. Is the regulatory stringency and client requirement high in banking? Absolutely, and it’s something we would never, ever dilute, but it can be still done in a more efficient and expedient way.
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“ We have a responsibility to deliver the best possible technology we can for UBS, more broadly, but also to the end client” – M ike Dargan Group CIO, UBS
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The best technology conferences & events of 2019
WRITTEN BY Ta m s i n Oxfo rd
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EVENTS
The technology industry can easily be described as the most mercurial and transformative. New ideas and innovations are fundamentally shifting the benchmarks of business performance, skills development and employment, among many other things. These technology conferences provide experts and industry professionals with a much-needed bird’s eye view of what’s happening now and what they can expect tomorrow…
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Digital Enterprise Show 22–24 May Madrid, Spain CLICK TO VIEW WEBSITE
The Digital Enterprise Show (DES) 2019 is all about digital transformation, another hot topic that should be on every boardroom agenda. The event includes a significant array of topics that are tailored to support business and professional alike. It’s relevant and trends-driven while allowing for networking and the opportunity to meet industry leaders.
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InfoSecurity 4-6 June London, UK CLICK TO VIEW WEBSITE
Infosecurity Europe provides an excellent platform for meeting new and existing customers. Described as the sourcing and knowledge hub for Europe’s information and cyber security community, InfoSecurity features an interactive exhibition floor with over 400 cutting-edge suppliers, a far-reaching conference programme and a host of networking opportunities.
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GITEX 6–9 October Dubai, UAE CLICK TO VIEW WEBSITE
GITEX Technology Week and GITEX Future Stars are two events that run concurrently and focus on the value and innovation of technology. The former includes plenty of discussion around the hot topics of AI, blockchain, robotics and cloud plus megatrend analysis and access to a wide variety of global thought leaders.
R E LI VE G I T E X 2 0 1 8
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Web Summit 2019 4-7 November Lisbon, Por tugal CLICK TO VIEW WEBSITE
Described by Forbes as “The best technology conference on the planet”, Web Summit will welcome over 70,000 people in Lisbon, who will be joined by the CEOs and founders of the world’s biggest companies, the most promising new startups, influential investors and leading journalists. w w w.th e in te r fa ce . n e t
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W R I T T E N B Y Ta m s i n O x f o r d
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On the business horizon, there are five technology trends that should be on every business radar for the next year There are always wild predictions and glorious visions for the future of technology as one year ends and another begins. Technologies that should still remain part of science fiction are shuffled forward as the saviours of business and profitability and product, looking awkward when everyone realises that they are yet to be refined to the point where they are of any use. However, over the next six to 12 months, the following five technologies are not just hype and trend, they are technologies that should be considered a viable part of any business strategy. 41
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AR and VR
Augmented reality (AR) and virtual reality (VR) technologies have become increasingly mainstream over the past few years. They have been limited by cost and capability and there has been a notable lack of relevant and viable business applications. However, over the next year,
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these technologies will be boosted by the ongoing developments in artificial intelligence (AI) and a surge in applications that are both useful and cost-effective. These technologies will also play a powerful role in creating far more immersive experiences for customers, providing organisations
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Machine learning and AI
The past year has seen both machine learning and AI reach notes of hysteria in hype and enthusiasm. The sci-fi vision of self-learning and terminator-esque intelligence is nowhere near being realised but AI and machine learning are transforming
the customer services industry and the viability of chatbots. This will continue to increase in both popularity and capability over the next year, providing the business with the ability to automate a significant portion of its customer service front line.
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Blockchain
Blockchain is finally moving out of the cryptocurrency shadow to become a viable technology for the business. It has numerous applications across industry and internal business process, provid-ing a secure, transparent and reliable
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ledger for transactions and data. The irony of the technology being used to provide absolute transparency and security when its cryptocurrency roots are somewhat mired in corruption and cybertheft is not lost on anyone.
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Augmented analytics
Gartner stands behind the potential of augmented analytics. In its recent analysis of the top tech trends ‘The Good, the Obvious and the Missing’, the research firm has pointed to this form of analytics becoming increasingly valuable to the organisation over the next year. The reality is that many organisations have been disillusioned by the promises made by
business intelligence (AI) and analytics in the past. Systems haven’t dipped as deeply into the data as promised and algorithms have shown a tendency to bias and complexity. The use of AI in BI and analytics, along with applications capable of harnessing these technologies more effectively, should see a massive shift in both capability and uptake.
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Active security The cybersecurity landscape is a constant, ongoing threat that shows little sign of changing its intensity. Organisations are moving away from the defensive approach to the intelligently-powered, self-learning cybersecurity system. AI-powered security is very likely going to show uptake over the next year but that doesn’t mean that the war has been won. While AI and machine learning could turn the tide, there remain concerns over their vulnerabilities.
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Getting it
covered WRITTEN BY Lucy D i xon
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I N T E RV I E W / A N G U S M C D O N A L D
THE INTERFACE TALKS TO CEO OF COVER GENIUS, ANGUS MCDONALD, TO FIND OUT HOW IT IS DISRUPTING THE INSURANCE BUSINESS FOR ECOMMERCE COMPANIES w w w.th e in te r fa ce . n e t
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ngus McDonald A CEO, Cover Genius
TELL US THE HISTORY OF COVER GENIUS - HOW LONG IT HAS BEEN OPERATING, WHO IS INVOLVED AND HOW IT HAS GROWN SINCE LAUNCH? Cover Genius began four years ago with myself and fellow co-founder Chris Bayley having the vision of empowering the world’s largest ecommerce companies to sell insurance to their global customers. We took this upon ourselves because we understood that large insurers were finding technology development difficult, requiring a lot of work and a skill-set you won’t find in a large insurer beset with legacy systems. And while this 50
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is changing, it’s not fast enough to keep pace with consumers who are empowered by the transparency that the internet brings and, as a result, are demanding policies that are no longer one-size-fits-all or riddled with obscure exclusions. To drill down and find our USP in the marketplace, we had to endure the challenges first-hand. What we found, in essence, was that global insurers who relied on online distributors didn’t have global underwriting capability and coordination, nor did they have platforms that could deliver our preferred policies from a single API call. Having identified the yawning gap in the market, we established Cover Genius to fill it. Our journey began in Sydney, where we were recognised as the fastest growing company in Australia for the period 2014-17. Since then, we have established an international presence with additional bases in both London and New York. Throughout our journey, we have deliberately not sought outside funding, which has given us the freedom to run an efficient, focused business and not get distr– acted by external investors. The
lesson we’ve learned is it is better to have the founders running the business, not out raising money. It makes a huge difference – but every case is different. In just four years, Cover Genius has become one of the fastest growing insurtechs globally and is licensed to directly underwrite or sell insurance in 60+countries and 50 US States; our products are distributed in 40 languages, with claims and instant payment capabilities in 90+ currencies. Our growth trajectory over the last three years has been fast and furious, pushing more than 1700%.
WHAT TYPE OF BUSINESSES ARE YOU WORKING WITH - AND WHY? The businesses we work with are amongst the largest ecommerce companies worldwide and include giants such as Booking Holdings, Despegar, Sendle, Campanda, and Camptoo, as well as most of the world’s largest car rental aggregators. With a combination of global scale and data science, Cover Genius was specifically developed to resolve the distinct challenges they were facing...
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HOW HAS YOUR BUSINESS DISRUPTED THE USUAL MODEL FOR INSURANCE PROVIDERS? Insurance has become a huge headache for online businesses that want to sell it, largely as a result of shifting customer behaviour where one-size-fits-all solutions don’t cut it anymore, especially as digital innovation provides customers with that freedom in other industries (such as personal banking). Empowered customers want increasingly personalised policies: coverage for an iPhone while travelling to Thailand, insurance for a rental car in Kenya, protection for a fascinator while travelling to The Royal Ascot. Traditional business partnerships with underwriters can’t deliver such flexibility. Cover Genius can, and we can do it on a truly global scale. Providing insurance products that are compliant with local laws in 60+ countries is no mean feat, nor is the requirement to translate every word of the customer journey into 40 languages and process payments and claims remittance in over 90 currencies! 52
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So how did we achieve this? By developing two critical technology platforms that bring connectivity to big ecommerce companies wishing to sell or optimise their insurance products. In 2016, we launched BrightWrite – a patented data analytics platform that provides insights about pricing and product optimisation for our clients.
“INSURANCE HAS BECOME A HUGE HEADACHE FOR ONLINE BUSINESSES THAT WANT TO SELL IT, LARGELY AS A RESULT OF SHIFTING CUSTOMER BEHAVIOUR” –A ngus McDonald CEO, Cover Genius
BrightWrite is well known for its multiple world-firsts within the insurance industry – in particular, its real-time risk assessment that accounts for non-traditional factors such as social data, user behaviour and other attributes that have never previously part of insurance pricing calculations. Within 11 weeks of the launch of its machine learning-based dynamic pricing
technology, BrightWrite delivered a 15% increase in Gross Written Premium. BrightWrite also counts global insurers as clients, including Chubb Insurance. In 2017, we then developed a fullstack API called XCover, which helps us provide bespoke services and solutions to issues relating to policy administration, licensing, communications, pricing, and claims. This was w w w.th e in te r fa ce . n e t
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“ AT COVER GENIUS, WE BELIEVE THAT TECHNOLOGY HAS DRIVEN SIGNIFICANT IMPROVEMENTS IN ECOMMERCE, BUT MUCH OF THE INSURANCE MARKET HAS YET TO INNOVATE THEIR INSURANCE PROCESSES” –A ngus McDonald CEO, Cover Genius
established to drive more effective, technology-based methods in the insurance business overall. At Cover Genius, we believe that technology has driven significant improvements in ecommerce, but much of the insurance market has yet to innovate their insurance processes. For instance, many insurers operate without integrated technology solutions - still focusing on unchangeable, paper-based policies. There is also a lack of dynamic pricing capability and as a result, insurance companies cannot adapt to diverse markets and customer needs, thereby limiting their own ability to offer insurance across different markets. Furthermore, customer experiences are (on the whole) bound to clunky and inefficient interfaces and company processes from initial policy quote generation, to claim processing and payment. Considering all this, Cover Genius launched XCover in an effort to support the growth of dynamic, tech-based and customer-friendly insurance business models. Bottom line, XCover not only enhances the customer experience, but also the effectiveness of our global ecommerce partners.
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HOW ARE YOU BUILDING YOUR PRESENCE IN THE UK? As a global business, having a presence in the UK is fundamental to the success of our global strategy.  London, in general, is highly reputed as a central and significant insurance hub and so being based here gives us access to this important market. With major partners such as Rentalcars.com and BookingGo based in the UK, it was a natural step for us to establish ourselves in the capital too. It’s a great strategic position for us that enables us to also efficiently serve our European partners and customers. Our expanding team on-the-ground are continuing to develop key partnerships with global ecommerce businesses here in the UK, which is propelling the Cover Genius name into the insurance spotlight. To maintain this momentum, we are committed to being seen and heard as leaders - and challengers - to the important conversations that are resounding across the insurance landscape: to do this, our focus remains on establishing key partnerships, attending targeted events and being recognised through award wins. 56
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WHAT DO YOU THINK WILL BE THE BIG TECHNOLOGY DEVELOPMENTS IN THE NEXT YEAR OR SO FOR YOUR INDUSTRY? It’s an exciting time for the insurance industry, with a plethora of technology-driven developments sweeping across the landscape. In terms of the main focus for innovation next year, any progress centred around the customer experience will likely come top. Our predictions include: • Payments – in particular focus and developments to support Real Time or Instant Payments in multiple currencies and payment types • Global distribution – eCommerce is a global market and partners need to be aligned with global distribution • End to end claims management and fulfillment • Technology that supports customer-centricity and elevated levels of customer experience: this will become the key differentiator that is exclusively available for insurtechs
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How charities are MAXIMISING DIGITAL FUNDRAISING WRITTEN BY H a ze l D av i s
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he challenges for charities in a post-GDPR age are many. In fact, back in September, a survey from nfpSynergy in conjunction with Third Sector magazine found that, for 53% of respondents, complying with the new data protection rules had seen their email database shrink. Postal databases were also been affected, with 37% of respondents saying theirs had shrunk. But many charities are rising to these challenges and using tech in innovative ways. In 2018, Save the Children teamed up with Visa to create contactless donation Christmas jumpers. The jumpers were worn by the charity’s face-to-face fundraisers at London tube stations on Christmas Jumper Day. Givers could just tap their card on the jumper to donate £2. Elsewhere, at Christmas 2018 the Samaritans offered electronic listening vouchers (promoted on social media with the hashtag #GiveTheGift) as Christmas presents in an effort to get people to encourage loved ones to open up about their problems and raise money in the process. Feline welfare charity Cats Protection turned to Facebook when it needed to promote its weekly lottery campaign. The charity’s research showed that there are 5m cat-loving Facebook users in the UK, 1.5m of whom regularly give to charity. By 2020 82 percent of consumer internet traffic is expected
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‘ By 2020 82 percent of consumer internet traffic is expected to be composed of internet video’
to be composed of internet video. Cats Protection’s primary objective was testing social channels such as Facebook to recruit new regular givers. By December 2017 it had increased its year one media ROI by more than five times its target and reduced its cost per player to an average of just £33. The campaign won the charity the IOF (Institute of Fundraising) Insight Award for Best Use of Data in Digital Fundraising. Says Emily Casson, the charity’s digital marketing manager, “We’ve also been working on our supporter emails – no small feat with over 250 branches and GDPR implications, programmatic advertising and SEO, and other digital opportunities. Over the past year digital has transformed our fundraising and digital fundraising is now a substantial income stream for the charity, which has enabled us to support even more cats. It is an area we’re working to build and innovate and further develop next year.” “There are many digital innovations and startups popping up, but as charities are non-profit they tend to be the last to benefit from the latest tech advances,” says Varun w w w.th e in te r fa ce . n e t
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Bhanot, co-founder of non-profit technology startup, Unhoused.org, an ambitious organisation which uses innovative tech solutions to help the homeless. Unhoused is the first Amazon.com for Homeless Supplies, where people can order their own clothing from an online store, but for every one bought, one is donated to the homeless. Unhoused then takes 64
a photo of the donation happening and feeds it back online to the customer to show full transparency. There is a slew of technologies available on the market. But are charities making the most of this? Research from digital agency Reason Digital finds that, though smartphone users are the biggest source of traffic to charity websites, the vast
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‘ Over the past year digital has transformed our fundraising and digital fundraising is now a substantial income stream for the charity, which has enabled us to support even more cats’
majority navigate away from sites after viewing just one page. Digital marketing entrepreneur Howard Lake says that Crisis’s Reserve a Place for Christmas campaign is worth a mention as an example of best practice, “The focus on a set and unusual sum – £28.18 – breeds an assumption that it relates to a specific cost. Plus,
by contrast, the focus on impact rather cost of a donation. Donors are invited not to increase their donation to a set sum, but to consider how many individuals they will benefit.” However, says Lake, “it is pitched courteously, avoiding putting it into those stark terms: ‘Will you help someone take their first step out of homelessness today?’” w w w.th e in te r fa ce . n e t
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‘ Charities certainly need to move towards more digitally advanced solutions which better reflect how donors now interact online’ 66
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Fundraisers have a lot on their plate mastering current digital trends but, says Lake, there are innovations on the horizon: “While voice search might well not reach the much-trumpeted ’50% of all search by 2020’ claim, its growth still represents a challenging opportunity for charities and fundraisers,” he says. “Look around you and see how many homes this Christmas add another voice assistant like Google Home or Amazon Alexa. These prove a challenge for charities in terms of SEO. On screen, Google shows 10 results for a search. With voice, you get one spoken answer. Being second or third on searches for valuable keywords now becomes not good enough.” Charities certainly need to move towards more digitally advanced solutions which better reflect how donors now interact online, says Bhanot, “People generally have ‘donation fatigue’, nowadays where they need a more compelling reason now to donate constantly, with so many causes asking for attention. By harnessing more modern, digital models they can keep people engaged, while making the whole donation process more transparent too.” w w w.th e in te r fa ce . n e t
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GDPR: WAITING FOR THE HAMMER TO DROP WRITTEN BY R u s s Swa n
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he weeks leading up to 25th May 2018 were characterised in the digital world by a growing sense of unease over the looming implementation of GDPR (General Data Protection Regulation). Urgent board meetings were convened as company directors suddenly woke up to the situation, and its potential impact on the bottom line. Specialist GDPR consultants sprang into existence to tout their newly-minted expertise and capitalise on fears of corporate Armageddon. Finally the day came, and... nothing. Websites ramped-up their intrusive demands that visitors accept cookies, and email lists became ever more desperate in their pleas for re-consent – but today, well over half a year later, there have been no high-profile prosecutions. In fact there have hardly been any low-profile ones either. The occasional cease-and-desist demand has been issued to data processors, and that’s about it. Even the most recent of the Information Commissioner’s Office’s legal actions, such as the well-publicised £15,000 fine to the parent company of Cambridge Analytica,
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were made under the old 1998 Data Protection Act. The same legislation was used to impose a £500,000 fine on American credit rating agency Equifax in September. Was GDPR merely a phantom, a bit scary but ultimately harmless? Data protection specialists are in broad agreement that we are currently in a ‘phony war’ phase of the legislation, waiting for the first batch of prosecutions – and when that happens, it will feel like spring 2018 all over again.
‘ WAS GDPR MERELY A PHANTOM, A BIT SCARY BUT ULTIMATELY HARMLESS?’
Take those irritating web pop-ups, demanding that visitors click to indicate that they consent to having cookies placed on their device. Renzo Marchini, a specialist data protection lawyer with Fieldfisher and author of Cloud Computing: A practical introduction to the legal issues, says that these are not only unnecessary, they are probably w w w.th e in te r fa ce . n e t
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illegal. “You can’t actually have a consent wall, but we know they exist.” Bryan Betts, an industry analyst with Freeform Dynamics, agrees: “We need a test case to show that pressing a button does not indicate informed consent.” Both were speaking at a round table event in December, looking at the implications of GDPR to date, which The Interface also attended. 72
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GDPR AND CIOS GDPR case law is eagerly awaited, not just by lawyers, but also by CIOs, data storage experts, and digital infrastructure providers. Alex McDonald, vice chair of the Storage Networking Industry Association SNIA and industry evangelist at NetApp, says that “GDPR is fundamentally about storage.” Hand in hand with storage is the
be forgotten only applies if the company has no further legitimate need for the data, but this – like so many detail points around GDPR – remains untested in the courts. The point is taken up by Joe Garber, enterprise software strategy executive at Micro Focus: “The more regulated industries are more fearful about prosecutions, because they’ve had to deal with these things before. Unregulated industries don’t know what’s going to hit them. We’re just waiting for case law.” He says he regularly asks CIOs if they think GDPR is too prescriptive or not prescriptive enough. “They usually say too prescriptive, but really that isn’t the case.” The legislation is primarily descriptive, with few hard ‘must-do’ clauses. sensitive issue of data deletion and the much-mooted ‘right to be forgotten’. Mr Marchini observes that this is taken to be complete with the erasure of personal data. “But what if the data is encrypted and the key is thrown away – is that the same thing? If it is beyond use can it be considered to be deleted? What if it could be restored from a back-up?” He points out that the right to
DATA OWNERSHIP One of those is the data protection impact assessment (DPIA), which is a mandatory process if an operation presents a high risk to the rights and freedoms of individuals. In the case of a job application, a candidate will submit a CV which contains some very specific and potentially sensitive information. A company w w w.th e in te r fa ce . n e t
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has a legitimate need to store and transmit this, but at some point that legitimate need may stop. “When does the data ownership transfer? Nobody really knows, until there is some legal action” says Johan Dreyer, director of sales engineering at cybersecurity provider Mimecast. A key element of GDPR is the philosophy of ‘privacy by design’, and there is broad agreement that has yet to percolate into corporate thinking. Renzo Marchini suggests this requires a fundamental reappraisal of the digital creation process. “To get the tech right, it means thinking about privacy even at an initial brainstorming session, not adding it on later.
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Companies should set up a privacy department, which should be present at all those meetings.” PRIVACY FIRST? Recent years have seen more than ‘ A KEY ELEMENT a few initiatives on new ways of thinking – things such as Six Sigma, digital OF GDPR IS THE first, agile companies, and so on. It’s PHILOSOPHY OF doubtful whether any companies have ‘PRIVACY BY DESIGN’, yet adopted a mantra of privacy first, AND THERE IS but that day may not be far off. And that’s because, if GDPR has yet BROAD AGREEMENT had any impact on corporate life, it THAT HAS YET has been to make companies aware TO PERCOLATE of the value of their data. On one hand this is the revenue that can be earned INTO CORPORATE from it, and on the other it is the THINKING’ potential penalties for mishandling. That Equifax case mentioned earlier showed that the ICO is quite prepared to use its teeth when abuses are uncovered. Because the prosecution came under the 20-year-old Data Protection Act, the maximum fine was £500,000. If it were to be prosecuted under GDPR, the penalty could be up to four percent of global company turnover – in this case, a little over £100 million. When the legal hammer finally drops, privacy will once again be the topic of urgent boardroom discussion.
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The rise of the chatbot WRITTEN BY R u s s Swa n
The chatbot has become the interface du jour for many digital developers, giving users the impression of genuine interactive conversation. It's a fast-moving area with many advantages – and a few potential pitfalls
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t is a measure of how much we take sophisticated technology for granted that the appearance of a pop-up chatbot screen, asking questions and providing sensible responses, is no longer considered remarkable. Chatbots today inhabit websites, intranets, apps, and social media platforms, and have become so ubiquitous as to become almost invisible. Interacting with a text screen is a natural activity, and most users don't seem to care much about whether the other side of the conversation is a human or a bundle of code. From a corporate perspective, chatbots can be a win/win. Increasingly reliable in their responses and cheap to operate, they are available night and day and are instantly scalable. Whether your site or app has one visitor a day or thousands, the bot is always eager to help. We've come a long way from the disastrous early attempts at providing AI assistance – remember Microsoft's paperclip? – but what a good chatbot does today is much the same as that much-loathed animated character: identify what a user is trying to do, and offer appropriate help. 78
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ARTIFICAL INTELLIGENCE You will have heard of the Turing Test, which held that if a computer could provide responses that were indistinguishable from those of a human, the machine had to be considered intelligent. Are we there yet? Despite some well-publicised claims, the answer is still, probably, no. In 2014 a program called Eugene Goostman successfully tricked Turing Test judges into believing it was a 13-year-old
‘ From a corporate perspective, chatbots can be a win/win. Increasingly reliable in their responses and cheap to operate, they are available night and day and are instantly scalable’
Ukrainian boy. This controversial victory is still a failure, though, because nobody expects or wants to find an adolescent behind a real-world help screen. More relevant is the Loebner Prize for the most convincing chatbot. This awards bronze medals each year to the best contenders, but has never made a silver (text) or gold (audio visual) award – the equivalent of a Turing Test pass. A glance at the best entries from
the 2018 competition shows why. Eleven bots were asked 20 questions, winning two points for a humanlike answer and one for a plausible response. Out of a maximum of 40 points, the winner scored 27 and the lowest just 12. Even simple questions can make the tech fall over. The winner, a chatbot called Tutor by Ron C Lee, answered "Do you know how to make toast?" with "No, we haven't". w w w.th e in te r fa ce . n e t
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CHATBOT LIMITATIONS While there remain limits on what a chatbot can convincingly do, this need not be a problem if it is depl-oyed in the right way. Recent research from Penn State University found that while many appreciate an apparently empathetic response from a bot, those who believe machines are actually capable of consciousness do not. "The majority of people do not believe in machine emotion, so took expressions of empathy and sympathy as courtesies," said researcher Bingjie Liu. "However, people who think it's possible that machines could have emotions had negative reactions from the chatbots." The answer is only to use them for things they are good at, says James Williams, who leads the development of advanced chatbots with Nottingham-based software company MHR. While chatbots are now common in consumer interfaces, he notes, there is much potential in the enterprise space. BUSINESS BOTS When applied within the company's flagship human resources (HR) software, Mr Williams says the conversational interface is an excellent way to simplify common transactions. "You'll hear us talk a lot about reducing friction," he says, which means anything that slows down a routine interaction. An example is an employee submitting an expenses claim, which MHR's Talksuite does through an AI-driven chatbot. "Taking a picture of a receipt is a natural thing to do, and the AI will recognise the image, understanding the content as well as w w w.th e in te r fa ce . n e t
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the context. Bots are really good for processes with lots of rules or lots of steps, and here it just asks a few questions and saves the employee a lot of hassle. Less friction." Knowing when not to deploy a bot can be just as valuable. Mr Williams recounts one client which had deployed a complex chatbot for its newly joining employees, known in HR circles as the onboarding process. "The chatbot went through everything plus the kitchen sink, so the employee was there for 20 minutes or more being interrogated by a machine. It was just awful. A web-based form is a much better interface in this situation." His final advice is to consider the image the bot projects. "Any personality in a chatbot tends to come accidentally, unlike a website or an app. If you let software developers write the conversation, you might end up with a bot that's actually a bit of a dick. People make judgements on things like language and punctuation. It's fine to be personable and friendly, but it should be clear when the user is talking to a bot and when any transition to a human interaction takes place."
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‘ You will have heard of the Turing Test, which held that if a computer could provide responses that were indistinguishable from those of a human, the machine had to be considered intelligent. Are we there yet?’
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15-16 May 2019 InterContinental London – The O2
700+
senior procurement attendees
150+
global 5000 companies
$6 tn
annual combined spend under management
The agship event of World Procurement Week, the ultimate team experience! Learn more and book now at worldprocurementcongress.com