Inside Manulife’s Four-Point Differentiation Strategy with CIO Joe Cooper

Fresh from its acquisition of Standard Life Canada, Manulife is using technology to differentiate itself on the basis of customer engagement, information management and analytics, efficiency and effectiveness, and accelerated solution delivery.

(Detail of Manulife’s headquarters complex in Toronto. Source: Manulife.)

Manulife Financial has enjoyed years of growth across its global operations, spread more or less evenly between Canada, the U.S. and Asia. The company has grown both organically and through landmark strategic acquisitions, such as that of John Hancock (Boston) in 2004 for over $10 billion, and the $4 billion acquisition of Scottish financial services company Standard Life’s Quebec operations, which closed in Jan. 2015. To make the most of its strengths, in 2014 the company conducted an exercise to determine how it could achieve differentiation in the marketplace by leveraging technology. Joe Cooper, Manulife’s Executive Vice President of Global Services and CIO, talked with Insurance Innovation Reporter about that exercise and the Standard Life acquisition.

Insurance Innovation Reporter: Manulife completed the acquisition of Standard Life Canada at the end of January; what is that going to mean in terms of access to markets?

Joe Cooper, EVP of Global Services and CIO, Manulife.

Joe Cooper, EVP of Global Services and CIO, Manulife.

Joe Cooper, CIO, Manulife: Standard Life had a big presence in Quebec that we want to maintain, in both life insurance and pensions. From a regulatory perspective, it’s probably the biggest life insurance asset that we’d be allowed to acquire in Canada. Since Quebec is a big part of the Canadian economy and the acquisition gives us a much bigger presence in that market, it gives us a healthy growth factor. We’re just in the early stages of an 18-month program to complete the entire integration—back office, products, solutions—and we will be allocating significant resources from our division to that task.

IIR: You’ve shared with us that, through the Global Services division, Manulife is pursuing a differentiation strategy based on four technology-related areas: customer engagement, information management and analytics, efficiency and effectiveness, and accelerated solution delivery. Is there a reason that “customer engagement” is at the top of the list?

Customer Engagement

JC: When we looked at the Information Systems function and asked what was necessary for business strategy, customer engagement was first and foremost. We’re not unique among major financial institutions in seeing the importance of a strong digital relationship, and of the value that can be derived from information with the proper analytics. So within that larger industry trend, we’re introducing a new element to our strategy to change the way we view our customers, structure a personal relationship with them and deliver more value to them, on a 24/7, anytime/anywhere basis.

That’s going to mean increased support of digital channels. We’re looking across divisions at the state of contact centers, websites and mobile applications to see where we should be making large investments to create a more holistic relationship with our customers. It’s not only about things like having the best-of-breed in mobile apps, but how all digital touch points interact with each other, enabling customers to seamlessly maneuver between them—for example, from a mobile app, to a customer service portal, to a live discussion with a customer support rep.

(Related: New Growth: How is Technology Making it Easier to Sell Life Insurance?)

We’re also looking to increase the value of distribution channels through data. When we think about customer engagement in Canada, our independent advisors are a very important and successful channel for us. We have to work with that channel to better understand the value it brings to customers, and expand upon it with more digital touch points where customers feel they’re getting value.

IIR: So the first item on the four-point strategy was fairly obvious as a necessary direction. Did you conduct a kind of diagnostic exercise to decide on the other areas?

JC: Well, I guess you could say that they flow from thinking about how society is moving in general with in the digital space, and then how that jibes with the internal imperatives of the organization.

Information Management & Analytics

IIR: Then I gather you think of information management and analytics as a larger cultural issue.

JC: Yes, and one closely related to customer engagement. If you want to have a personal, intimate relationship in the digital space, you need a sound, single view of what a customer means to you. You have to complement that with information in the public domain to understand what your customer would value as far as services and solutions. The importance of that is that we’re an information-based business. Our products are digital, in a sense.

So when we look at what’s happening in the world of analytics and the tools and technologies that are rapidly evolving in that area, we feel it’ s necessary to focus on information management and analytics not just within the IT organization, but to push it out across all divisions. We want to leverage our global scale, but we also want to ensure that all the businesses are engaged in an assessment of how well they’re positioned with their information assets and how capable they are to leverage analytics towards their business objectives.

IIR: Do you see this as an urgent task?

JC: Yes, I think that a big piece of this is how quickly analytics are moving and where they’ll be in a couple of years. As someone who has spent his career in technology, I’m amazed at how quickly the analytic space is evolving, both in the increasing sophistication of the tools and in the simplicity with which they can be used. We feel an obligation to bring that awareness to our business leaders.

IIR: Would you characterize the progress of data and analytics as an evolution or something more like a secular change.

JC: I really believe that from a technology perspective there will be some fundamental shifts in society in general, and certainly in the ways customers engage with any company. We’re watching quantitative changes in the volume and speed at which data is processed, but we’re going to see qualitative changes in its impact. A speaker at a conference recently asserted that the idea of being an SME is essentially a 20th century concept: the explosion of data means that it will be impossible for any human to adequately grasp the amount of relevant information available on a given topic. When you consider the explosion of data and the increasing sophistication of analytics, you see how important it is to have an information strategy at a business level. Analytics are critical not only on the customer side, but across any financial decision-making. Given what’s ahead, this needs to become more of the DNA of business leadership in the next five years. Analytics will introduce a greater amount of factual input into decisions and they will introduce new efficiencies.

Efficiency and Effectiveness

IIR: And efficiency is the third objective of your four-point plan.

JC: Yes, and it’s a logical progression, because technology is such a large part of a financial institution’s general expense—both in sheer dollars spent with vendors, and on the HR side. Couple that with how quickly the technology is changing now, and the opportunity to invest and drive value is large. You have to have a balanced approach in how you run the function, so to that end we have a program whereby we’re investing tens and hundreds of millions of dollars in our business, but part of that is directed toward the point of driving out tens and hundreds of millions of cost through greater efficiency.

IIR: What’s an example of a technology that achieve efficiency gains on that scale?

JC: We see cloud computing to be especially opportune. We outsource our all our data center needs to IBM in Canada, CSC in Asia-Pacific and CGI in the U.S. Our peers have billions of dollars invested in data centers, and that’s a burden we don’t have, allowing us to be more agile in moving to cloud computing.

We were also one of the first major institutions to move to Workday. It was perfect timing: we had need for a global HR system when they were in the early stages of their business. We’ve enjoyed excellent results with them. We’re also a global user of Salesforce. In 2014, we started to take advantage of Microsoft’s Azure and IBM’s Softlayer.

IIR: Where might you use cloud in the future?

JC: Number one would probably be application development and testing, which constitute a huge workload from an IS standpoint. There are many opportunities for cloud, and even regulators are trying to determine the best course. It’s a disruptive technology, and one where many executives and institutions may be a little behind in their thinking. They will need to seriously explore how cloud could impact the operations of financial institutions.

Accelerated Solution Delivery

IIR: With the time we have left, let’s talk briefly about the fourth point on your strategy, accelerated solution delivery.

JC: When we look at where we want to go as an organization, the pace at which we need to get there and the rapidly evolving technology that we’ll be using to do it, we simply have to get much quicker at delivering solutions to businesses. With that need in mind, we have a major focus on application delivery in each division, using new methodologies and technologies. This is currently mostly about digital, portal and other web-related technologies. But in some cases we’re seeing analogous efforts going from months and years down to weeks. We placed significant focus on that during 2014, and we’re planning to take what we’ve learned and move that more and more into our application development teams.

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For over a decade he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at AnthODonnell@IIReporter.com or (503) 936-2803.

Comment (1)

  1. Great article. Mr. Cooper is clearly a leader in the changing the way technology can be used to achieve Manulife’s differentiation in the insurance market place. Companies with innovative new technology like Adminovate are focused on helping insurance companies differentiate the themselves through rapid product development. This article validates our goals and focus on our approach to business.

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