In the past few weeks we have seen a watershed in the march of new technology, as Google and Facebook squared up to another powerhouse of the modern world, the older and gnarlier nation state.
The stand-off between the two tech giants and the Australian government was inconclusive – it is clear that both sides would have lost heavily from a prolonged confrontation, and that neither was in a position to deliver a knock-out punch.
What has come out of this quarrel, however, is the simple truth that behind the electronic networks that power technological progress lies a much more complex network of trust. Technology needs the cooperation of many different players in society – not only through legal obligations such as GDPR, but also from the “court of public opinion”.
This network of trust needs as much investment and maintenance as any electronic network. Take, for example, something as simple as the transmission of medical records from doctors to insurance companies – something that is essential for the life insurance and critical illness markets.
The current, heavily paper-based system is slow, inefficient and prone to mistakes that can compromise both consumers’ privacy and their ability to obtain the right kind of cover. It wastes the time of GPs as well as insurers and financial advisers.
But the range of stakeholders needed to make data-sharing a reality is formidable, including thousands of GP practices, patient advocates such as the UK’s National Data Guardian, data regulators, financial services regulators, underwriters, financial advisers and, of course, the public itself.
The methods of building trust needed to bring stakeholders together are being developed, but they have not yet reached full maturity. They include:
- Real transparency, which means being peer-reviewed through a rigorous governance process, not just setting out pages and pages of terms and conditions that everyone knows will never get read. For insurers, this means building transparency around how they use data into their business model, product development and communications, and not seeing it simply as a compliance exercise
- Understanding the effect that technological change has on society – and, as professionals, engaging in debate about how to mitigate the negative impact of technology. Facebook and Google may feel that they should not be responsible for subsidising news networks whose traditional channels are less attractive to advertisers than social media or search engines. However, if technology is changing the balance of power in an economy, there will always be consequences for the winners as well as the losers For insurers, this means understanding the impact on those who may not gain from technological change, such as high-risk groups who may find themselves excluded from insurance as risk evaluation becomes more sophisticated, and people who are less able to move from face-to-face to virtual channels
If companies do not manage their trust networks as carefully as they manage their tech, they will find that there are plenty of governments, regulators and NGOs who are willing to do it for them. Even more seriously, without investment in our society’s network of trust, the potential of technology to improve the lives of consumers will never be met.
Chartered Insurance Institute