The start of a New Year is time for reflection and resolutions. If you’re an insurer, you may well be considering how your business is going to meet the more complex standards of the UK Financial Conduct Authority’s (FCA) new PROD 4 regulations, as outlined in our earlier blog. Are your current product governance and management systems fit for purpose? Or is it time for a change?
Let’s look at a scenario to help you answer those questions.
Picture this: You’re launching a new insurance product. In addition to meeting all your internal business needs, you have to ensure it delivers fair value to your target market customers, and meets all the other new FCA requirements. You kick off the approval and launch process via email and an Excel spreadsheet. At least five different departments need to sign-off and there will be questions and clarifications to be sorted out. So, you email it to all of them.
Four people reply, having edited the attached Excel file. The fifth colleague is on leave. You add all the changes to your original spreadsheet, but without realizing it, you make an error.
Again, you wait.
The fifth colleague returns so you send them the updated version to check. They query one of the changes, but version control is a challenge while tracking the amendments in your emails, so don’t know who suggested it. Meanwhile, the error is still there and no one notices.
Then you get sick. Now, because all the information about the product is stored on your computer, rather than centrally, the whole project stalls.
Traditional product governance and management processes lack transparency, are slow-paced and can be prone to human error. Documents and data are scattered all over the place, tracking changes is difficult, and the whole system lacks security. The FCA now expects insurers to review all their insurance products annually. If the FCA decided to audit your company, what would it find?
A different look
2022 needn’t look so messy, nor become such a headache. By adopting Dassault Systèmes’ Intelligent Product Governance solution, you can identify weaknesses in your current framework, and ensure you adhere to the regulations with ease.
The 3DS Intelligent Product Governance solution is a holistic, automated, connected and streamlined way to manage financial service products. It can do this for the entire product lifecycle and draws upon best practices from other industries, such as automotive, life sciences and Aerospace and Defense. From the ideation phase, to product development, while you’re maintaining or updating products, until you change or sunset them, it unites all stakeholders in a secure and transparent space.
The solution connects your whole team in a centralized way. Documents are hosted in a space accessible to all, although, permissions can be granted or denied to maintain confidentiality as required. If part of a project involves discussing commission schedules, for example, not everybody needs to know.
With this solution, lost emails, multiple versions of the same document, and untraceable updates become a thing of the past. Intelligent Product Governance automatically creates a rock-solid audit trial, which is vital in the new PROD 4 climate. Output can be made available to regulators, internal auditors, or anybody who needs to see it.
The Intelligent Product Governance dashboard also includes reporting and scheduling functions. At the touch of a button, it is possible to produce robust status reports, and see which products are scheduled for review. If you’re an insurer that suddenly has to review 1,000 products a year, this will save time and money.
External stakeholders can also easily connect onto the platform for limited purposes. For example, if you need to send a broker a distribution agreement, you can do it securely within the platform. You can capture their comments on the platform and ensure they can access only what you want them to.
A bright new year ahead
The FCA has said it expects firms to demonstrate strong governance, control and oversight arrangements throughout their business. The 3DS Intelligent Product Governance solution will enable insurers to mitigate the risks of harm in five key areas : Product Design, Product Testing, Distribution, Governance and Oversight.
Firms must also institutionalize and archive all decisions and documentation around product design, target market, pricing, fair value, on-going management and monitoring on one system.
The 3DS solution will help you reduce time-to-market, optimize product performance, create an efficient product lifecycle management process and ensure regulatory compliance.
Studies have shown most New Year’s resolutions fail by Jan. 19, but compliance with the new rules is a resolution insurers will be happy to keep.