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Emerging Technologies, Automation and Cybersecurity – What’s new and where are we headed?

Friday, September 16th(12:20pm to 1:10pm)

Session Objective: Emerging Technologies, Automation and Cybersecurity – What’s new and where are we headed?

Agenda:20 to 30 minutes – Introductions and Panel Presentations15+ minutes – Q&A

Technology is consistently being implemented and improved upon within the workplace. It has the ability to change whole industries and allow for greater expansion and more opportunity to expand daily undertakings

• Understand what insurers are doing today to build a competitive advantage with technology, and discuss the future of technology innovation

• Focus on key technologies, such as cloud offerings, automation tools, mobility, data analytics and cybersecurity risks, and how it’s changing the way we operate and engage

• Learn more about the risks and benefits associated with emerging technology

ASK QUESTIONS – Text Questions to 732.770.3519

YOUR PRESENTERS / PANELISTSIASA Metro NY/NJ CHAPTER

Moderator:Jerry Ravi, EisnerAmper, Partner, Consulting Services and Cybersecurity Practice Leader (ERM, Internal Audit & IT Advisory)

Panelists:James Tsai, Workday (Insurance Segment Leader)

Brian Hughes, Blackline (Solutions Consultant)

Deepesh Randeri, BrickStreet Insurance (Chief Information Security Officer)

Emerging Technologies

Technology Trends

Data Analytics

Robotics Process

Automation

Information Security

Social Media

Mobile Devices

Cloud Computing

10. Longevity will improve

9. The risk landscape will change significantly

8. Policyholder interactions will increase

7. The business world will be less monolithic

6. Transportation will be autonomous

Top 10 Impacts

Technology is consistently

being implemented and

improved upon within the

workplace. It has the ability to

change whole industries and

allow for greater expansion

and more opportunity to

expand daily undertakings.

5. The blockchain is coming

4. Behavioral Science takes a seat with Actuarial Science

3. You never know which next big idea will stick

2. Machine learning is here to solve workforce issues

1. Information security and risk is a top priority

Top 10 Impacts

The focus on insurance is due

in part to the perpetual slow-

moving nature of this field.

“When finances, security and

safety are on the line, you

don’t want to be playing catch-

up.”-Jennifer Fitzgerald Crunch Network Contributor

Mobility

Source: Cisco

Enterprise mobility management (EMM) is the set ofpeople, processes and technology focused on managingmobile devices, wireless networks, and other mobilecomputing services in a business context.

Risks of Emerging Technologies

Automated cars could eliminate hundreds of

thousands of jobs as a driver.

Bugs and breakdowns could cause major service or production delays.

Automated positions held within organizations could keep individuals from

employment.

Consistent learning curve for all employees to keep up with

advances.

Potential Risks

CLOUD SOLUTIONS UPDATE

James Tsai, Insurance Segment Lead (Workday)

The majority of Insurers are considering cloud suites for their ERP platforms in the next 24 months

Workday Confidential

60% will upgrade within 24 months

86% are adopting a suite or full ERP

platform

84% are favorable to cloud ERP

adoption

Source: Ward Insurance Systems Survey – April 2015

16%

18%

26%

21%

18%

Recent UpgradeUpgrade in next 12 MoUpgrade in next 12-24 MoUpgrade in next 24+ MoNo upgrade planned

17%

69%

14%

Replacing with Indiv. Components

Replacing with Application Suite

Replacing with HR/FIN Platform

13%

71%

16%

System entirely/partly cloud-basedSystem not cloud-based, would consider in futureSystem not cloud-based, would not consider

The New Cloud Construct

Workday Student

AUTOMATING THE FINANCIAL CLOSE WITH BLACKLINE

Brian Hughes, Solutions Consultant (BlackLine )

Continuous Accounting

RECORD-TO-REPORT PROCESS

Efficiency, Control, Visibility

Automate your close activities‐ Automated reconciliation rules‐ Automated transaction matching‐ Workflow based review and approval

Use Continuous Accounting‐ Single integrated cloud platform‐ Scheduled loading of GL balances‐ Point in time reporting and analysis

STATE OF CLOUD SECURITY

Deepesh Randeri, CISO (Brickstreet Insurance)

Definitions of Cloud & Cloud Security

1. Gartner defines cloud computing as a"style" that can be applied in private,hybrid and public environments. This isconsistent with the NIST definition.

2. The general public understands cloudcomputing as “things accessed over theInternet.”

3. Cloud security addresses the processesand mechanisms used to control accessand usage of cloud‐based systems.

Are you in charge of Cloud Security?

You feel compelled to solve the “cloud security problem”

But every suggestion is either too hot or too cold for you: No corporate policy just right for you No security product is just right for you

Too Little! Never

Just Right?

Too Much!

Three Primary Areas of Cloud Security Concern

VirtualizationMultitenancy SaaS

Data out of your physical control

Shared processing with other customers

Minimal ability to set contract terms

No flexibility on service features

New vulnerability management and patching approaches

Software‐defined networking and security

No consensus on DevOps security approach

Complex, dynamic, distributed

Mostly under control of end users

Minimal transparency

No direct access to OS or database

You only get the features they provide

Complex, dynamic, distributed

Top Three Reasons for not planning to use Public Cloud Services

Public Clouds Are Secure!

• Gartner Position:• Clouds are usually a more secure starting point than in-house implementations.• Public cloud workloads can be more secure than in-house workloads.• SaaS applications are offering an increasing level of security and control

functionality.

• Justification:• No evidence indicates that CSPs have performed less securely than end-user

organizations – Quite the opposite.• The cloud business model enables and rewards high levels of provider rigor.

• Actions:• Reorganize yourself around how to safely and securely utilize cloud computing.• Don't put high trust into poorly managed clouds.• Track which clouds are used for what purpose.

Mismanaged Credentials AreGreatest Source of Cloud Security Risk

• The rush to embrace public cloud, especially SaaS, meansthat reusable passwords are ubiquitous and poorly controlled:

• Cloud accounts are not always linked to directory services• External users are common• Privileged accounts are not well controlled• Activity monitoring is weak• Granular role-based access control is usually not provided

• This leaves data exposed to undetected misuse

The Greatest Cloud Security Challenge ‐VISIBILITY

Cloud Control

Optimal CSP Transparency Information

Strategic Planning Assumption

Make yourself Relevant to the Ubiquitous Cloud

Develop a corporate cloud strategy

Write and enforce policies on cloud usage and control

Develop technical and operational competencies for IaaS and PaaS

Develop processes and oversight for the effective use of SaaS

Text Questions to 732.770.3519

CONTACT INFORMATION

Jerry Ravi Partner, Consulting Services Group, EisnerAmper (732) 770‐3519 [email protected]

James Tsai Insurance Segment Lead, Workday (925) 667‐0903 [email protected]

Brian Hughes Solutions Consultant, BlackLine (646) 549‐9551 [email protected]

Deepesh Randeri Information Security Officer, BrickstreetMutual Insurance (304) 941‐1079 [email protected]

IASA Metro NY/NJ CHAPTER

Exhibits

Additional information on Top 10 Impacts to Emerging Technology

Robotics Process Automation

Robotic Process Automation (RPA) is the application of technology that allows employees in a company to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems

The Robotics / Automaton Evolution

Automation Robotic Process Automation Enterprise Process Robotics• Refers to executing single manual steps in processes, which mainly happen within and between business systems

• Task management – define, manage, monitor and report on the manual steps within an end to end process

• Integration of data flow rather than removing manual steps, e.g. data inserted in one system appears in another system as well

• Typically uses known and established technologies and point solutions such as BPM, workload automation, ETL, OCR

• Refers to software robots replicating a human’s manual activities performed on the user’s PC screen

• Can also include end user tools in the scope of automating a process

• A robot for every step

• A robot for every user

• Typically involves relatively new vendors and their technologies

• Executing end‐to‐end processes

• With manual intervention only for exceptions, approvals and judgements

• Independent of and across all involved business applications and end user tools

• Without the need to apply changes to the underlying business applications and respective processes

• Using business rules, encapsulated process IP and system intelligence to avoid the need for orchestration of manual work

PEOPLE DRIVE THE PROCESS

I/T PROJECTS AND OPERATIONS

AN ARMY OF DEVELOPERSFOR AN ARMY OF ROBOTS

I/T PROJECTS AND OPERATIONS

SOLUTION DRIVES THE PROCESS AND THE PEOPLE (WHEN REQUIRED)

BUSINESS DRIVEN PROJECTS AND OPERATIONS

Technology is changing how we audit..

• Gaining effective insight through advances in visualization (“Audit by sight”)

Data Discovery and Presentation

• Alternative modeling and analytic techniques that can tackle audit objectives in hours instead of weeks

Agile Analytics

• Emerging methods to collect, organize, structure and search massive amounts of data not found in traditional databases

Unstructured Data

Integration

• Collaborative project management technology integrated into Audit Planning, Execution, and Reporting

Enhanced Audit

Management

Increased Risk Coverage

Efficient Audit cycle time

Insight in Real‐time or “Right‐time”

Manage Risk/ Return

Build a Learning Organization

10. Longevity Will Improve

Biotech, smart homes, robotics and 3‐D printing are just some of the technologies helping people live longer.

Telematics, such as Fitbit®, help track and maintain data of daily routines.

Allows for individuals to be more conscious and wary of health, work, and personal time.

Scenario planning to assess the implications of possible outcomes and time frames for medicine and healthcare.

Technology tends to be created or updated with the goal of reducing risk.

As society transitions to accept things like driverless cars and robotics, insurers will be navigating a winding path.

Who is liable for these new kinds of risks? The manufacturer, or the end user?

We will see more opportunities for new business to emerge as the industry changes.

9. The Risk Landscape Will Change Significantly

8. Policyholder Interactions Will Increase

Mobile market is growing at an exponential rate.

Real‐time data streaming allows insurers to gain more information on policyholders.

Opportunity to create an ongoing relationship with policyholders and clients.

Should consider the implications of interacting beyond the relatively few communications.

Insurers have traditionally had a relative lack of

customer touchpoints.

7. The Business World Will Be Less Monolithic

Working along with construction, medical, energy, and agriculture

companies.

There will be two fundamental questions for

insurers to answer:

1.) Which is the best fit for the core competency of the

industry?

2.) Who will own the customer relationship?

Must adapt to new roles, form new partnerships, and reevaluate their

role as an insurance agency.

Driverless cars, commercial vehicles, marine vessels and trains will all begin to emerge.

There are two implications for insurers:• Commercial insurers will have to grapple with rapid changes in ownership.• Liability for the vehicles they insure will increase.

Insurers have an interest in the changes to the transportation infrastructure.

6. Transportation Will Be Autonomous

5. The Blockchain Is Coming

Digital currencies based on blockchain could eliminate exchange rate risk.

Micro‐insurance transactions become more feasible with this kind of mechanism.

These contracts are a decentralized way to guarantee that information exchanged is trusted.

Building up behavioral sciences as a discipline will be a challenge.

4. Behavioral Science Takes a Seat with Actuarial Science

More data means more kinds of data

are available to begin predicting the future.

The ability to measure and monitor everything raises the profile for behavioral

sciences.

Connecting with people more quick than before allows the opportunity to incorporate more

humanistic functions.

Building up behavioral sciences as a discipline will be a

challenge.

3. You Never Know Which Next Big Idea Will Stick

Insurance technology startups are increasing at a rapid rate, but an estimated 9 out of 10 will fail.

Companies that will prosper are very likely to include some that

transform the industry.

Opportunities for investing, partnering, or learning lessons from these companies should be considered in strategic planning initiatives for other entities.

Artificial intelligence and machine learning platforms could fill into rolls of other industries.

It is unlikely and undesirable for automation to replace all human experts

Automation could allow the smaller number of experts to multiply their impact.

2. Machine Learning Is Here To Solve Workforce Issues

Possibilities within the insurance industry could include:

Robots and drones could visit accident sites and perform damage assessments.

Automated advisors providing counsel on investment decisions.

Rules engines making more underwriting decisions.

1. Information Security and Risk Is a Top Priority

Carriers must be cognizant and vigilant of the risk to their infrastructure.

Services that are already being created based on this data promise to be even more astounding in the future.

The drawback is an increased possibility of data being stolen, altered, and misused.

Damage to organizations reputation was biggest concern among executives, employees, and customers.