Business drives technology, Part 2

Ashleay: Welcome to the “In Your Interest!” podcast. My name is Ashleay and this week I'm joined, as usual, by our Chief Strategist colleague, Sébastien McMahon, and we are once again joined by Pierre Miron, Executive Vice-President and Chief Growth Officer of Canadian Operations, to talk about digital transformation, its future and its impacts on society. So hello, Sébastien, and welcome back, Pierre. It's a pleasure to have you with us for a second episode.

Pierre: My pleasure.

Sébastien: Hello, Pierre. Hello, Ashleay. So maybe Pierre, first question out of the gates here. I'd love to hear what you have to say about data security. How sensitive are we about where our data will be physically stored?

Pierre: Yeah, it's a very relevant question, this notion of security and confidentiality and so on. As you know, we have adopted at iA a cloud strategy and we used to say “cloud first.” Why we adopted it? Because it's quite easy and that provides the agility that we're looking for. However, we have to recognize that the location of the data will be elsewhere than our headquarters, if you wish, or our computer room. And that's raised some question about confidentiality, access and everything else. But at the same time that we have adopted this cloud strategy—and we are also, as you know, collecting a huge amount of data, that's a big advantage of using this cloud strategy—but at the same time, compliance and requirements are there. So, we have included in our sourcing mechanism a list of criteria that all the cloud providers need to comply with. So, that’s the point to make sure that the companies we’re going to be working with will comply with those requirements. But in fact, those requirements are more heavy than the ones that we used to have internally because of the nature of the work that we we’re doing. So, that's the first criteria. The second thing is location. As you know, we we've been talking about, for those of you that are familiar with the Patriot Act, that give access from a US standpoint to all data, even though that the data could be located elsewhere. So, some legal obligations need to be embedded in our choices. Therefore, we want to make sure that for every cloud provider that we have selected, we're going to be well protected. So, that's the main point of the data security and data compliance, but at the same time, recognizing that those providers will provide the agility that we're looking for and the capacity that is required to do what what we are expecting to do.

Ashleay: Great. And what does the future hold for us? Can you provide some examples of advances?

Pierre: Up front, I have to say that the future looks good for us because of the investment we've made in the past. As you know, we've done some catch up on what I would call the business platform, but we've been very active on this innovation related to this digital journey. And we are continuing on that. So, two examples that come to my mind with your question, Ashleay. The first one is what we're doing with the global CX function what we call the “growth hub”. It's a combination of people, process and technology, but in fact, what we're trying to achieve with this is to be in a position to, for any transaction that will be processed through a business unit, send this transaction to this centralized hub with data analytics, machine learning algorithm, and be in a position to determine quickly what will be the next best action with this customer, and send a lead to a business unit to process it very quickly. The best example I have when you sell a life insurance policy, most of the time this person might have a home or a car, and it's quite easy with the data that we have collected with this person to determine what will be the next best action.

But at the global scale, we're trying to implement this process in such a way to be in a position to process more and more volume with this. So, it's a combination of data analytics, technology and AI. So, that's a good example of this journey. The other one is much smaller but very easy to understand. With our dealer business in Canada, we announced a deal before the end of 2023 with a partnership with Auto Canada, Kijiji and us. And the idea is to expose our F&I services to the Kijiji website for all the used cars, what I would call the second life of a car, and entering into a C2C market that we didn't have access before this deal. So, we don't have to change anything with our products or services. We just have to expose an API in this website. And here we go. We are ready to process. So, this is this notion of exposing our services through the business digital ecosystem. That’s two examples that, as far as I'm concerned, illustrate quite well the evolution of our digital journey.

Sébastien: And, you know, ChatGPT, of course, is on everyone's mind. And artificial intelligence is part of every business conversation these days. So, can you give us maybe your take on the impact of artificial intelligence on business and society?

Pierre: It’s an interesting question, Sébastien, this one, because AI have been there for more than ten years, but with the arrival of ChatGPT, that's a big shift that will have an impact not only on your professional life, but also on your personal life. And that's a big game changer, I would say. So, over my career, I've never seen a wave that will have this level of change, of impact if you wish, on our life. The AI wave. We are just at the beginning of this wave. But yes, you're right, those kinds of tools will provide more productivity, will be there with you to become much more effective in your work, but in your life as well. Think about what's going on with self-driving cars, with telemedicine, with data science, with robots and everything else. So, we’re just at the beginning of this wave and we will continue on that. So, what will be the impact on us? Yeah, there's positive impact for for a company like us by adopting those kinds of technologies. However, it needs to be driven with an ethical way. So, we'll see governments, big players in that market come up with, I would say, some guiding rules in order to avoid I would call the “dark side” of the AI stuff, such as fraud and everything else. So, because at the end of the day, there are some people that will use those kinds of technology not in the right fashion. So, we just need to be prudent in the way we're going to be using those tools. That's not a problem for us, but overall, we need to be careful about this. That's basically my view of of AI.

Sébastien: Yeah, it makes a ton of sense. And recently we had an episode with Maxime Houde, one of our colleagues who's a portfolio manager who invests in companies that are, you know, big actors in these technologies. And what we were discussing with him is that there might be even some factors that could slow down the adoption of AI, mostly based on engineering and also on regulation issues. So, would you have an opinion on that?

Pierre: Yeah. I think, like I said, government, major players will have to sit down together in order to establish rules, regulations to make sure that those tools will be used in the right fashion. However, yes, you're right, that may slow down—it doesn't mean that's going to be slowed down—but that may slow down the deployment of those tools or the implementation of those tools. But like many different waves, we won't be able to fight against this wave. We have to adopt it. And adopting it, meaning that, like I just talked about digital transformation, we're going to have to pick up our spot related to the AI journey and make sure that, okay, we're going to get the benefits out of this. But we're already seeing some some benefits with the example I just provided a few minutes ago.

Sébastien: Yeah. Makes sense.

Ashleay: Very good. Well, thank you so much, Pierre. Once again, for all your enlightenment on the technological transformation that businesses are undergoing. Thank you, Sébastien, as well. And to our listeners, don't hesitate to contact us if you have any questions and we will see you all next week.

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