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Strategy

Technology Trends from the SMB Perspective: A Q&A with CFIT SMB Member Justin Locke

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Committee on Finance and IT member Justin Locke has been the Controller of American Traditions Insurance Company for the past 10 years now. FEI’s Manager of Technical Activities Tom Thompson speaks with Locke on the unique challenges and risks his company faces, mergers, Blockchain technology and more. 

Tom Thompson: How did you become aware of and involved in CFIT?

Justin Locke: I first heard about CFIT from a prior member at an annual FEI Summit a number of years ago. I was invited to attend the following committee meeting, hosted by Intel in Portland Oregon, which was where I grew up, so I jumped at the chance. I thoroughly enjoyed the topics and the thoughtful conversation, so I applied for membership.

Thompson: What are some of biggest challenges in your accounting and finance department?

Locke: We are a privately held insurance company that specializes in writing mobile home insurance in Florida, so that presents some unique challenges. Our operating environment is constantly changing. Not only due to weather events, but also due to political, legal, and technological changes. One of the main keys to success is to be able to quickly understand and mitigate the risks that these changes bring. That requires visibility into more aspects of our data than ever before.

We have a small finance group, so while we are being asked to do more in terms of data analysis and feedback, we also need to make sure we maintain a timely and reliable close process with accountability and control. It is imperative that we operate in a transparent, conservative manner in order to ensure that we maintain the trust of our customers, regulators, and rating agencies. In that regard, we are continually on the lookout for ways to improve on manual processes to create faster, more reliable information.

Thompson: As a senior finance leader of an SMB, how does CFIT help you be better in your role? 

Locke: CFIT has been great for keeping me in tune with what technologies are impacting finance leaders and how companies are utilizing these technologies. Even though we aren’t a Fortune 500 company and we don’t necessarily have the resources to be at the forefront of every new technology, CFIT has given me an opportunity to hear how others are embracing and responding to these changes, and the lessons learned. I feel like this helps us be better prepared as we move forward on our own technology journey.

Thompson: What were some of the key takeaways for you from the June CFIT meeting? 

Locke: Our June meeting was at the corporate offices of Johnson and Johnson. Of particular interest to me was their use of robotic process automation (RPA). This is a subject area that seems to be taking off at a fairly rapid pace. The cost of implementing RPA in an organization does not have a huge price tag. For this reason, it was intriguing to hear about J&J’s RPA use cases. Even though we have a small finance group, there are multiple repetitive tasks that if we were to implement a bot to do could free up time to do more value added activities. Maintaining effective governance over the bots is definitely a key takeaway from the presentation. A bot should be treated as a user and companies need to maintain proper segregation of duties and not give a bot more autonomy than an actual person. Also, it is not effective to use a bot to try to speed up a broken process. It is much more effective to improve the process first.

Blockchain was another major topic area of discussion at the June meeting, and has been a topic that the committee has been actively following for some time now. To me, this topic seems further off in terms of actual impact to our organization, but the idea of smart contracts and instantaneous validation will likely be extremely important to the insurance industry and I am very interested in its progression.

Thompson: What are you most looking forward to at the upcoming CFIT meeting to be hosted by Dow?

Locke: I am definitely interested in hearing about the integration challenges from Dow’s merger with DuPont. It’s difficult to imagine the complexity of a large transaction like that. We just merged our two insurance companies together. In terms of mergers, ours was probably as simple as it gets, and we are still working through a lot of challenges. I am very intrigued to hear about Dow’s experience.

It will also be great to hear about their digital transformation journey. No matter what size company we work for, digital transformation is occurring, both within our organizations and through the solutions vendors and service providers that we utilize. I think an important component of that, particularly in a smaller organization, is to be willing to be nimble, but to be cautious to ensure that we are moving the needle forward and not just changing for the sake of change. That is why I enjoy listening to the experiences of other CFIT members and presenters and gaining their insights.