1. Introduction

1.1. Research question

1.2. Why is it important?

2. Strategic challenges for financial service industry

To analyze necessity of integration new technology in organization's business processes I would like to define first what are the main forces influenced on industry's players and how companies have to consider future changes in their overall strategy.

Nowadays world is changing very fast, so companies have to anticipate future trends and react proactively to be able overcome strategic challenges and strength sustainability of their competitive advantage. Some of the threats have industry's specific, when another is general and related with macroeconomics factors.

In this section we will discuss all of them based on industry expert's opinion and statistical information illustrating the most important trends.

2.1. Challenges for financial service industry: experts' view

Nick Prettejohn, Lloyd's CEO, in his speech on FSA insurance conference, London, UK, April, 2005 have been described general challenges for financial service industry and at the and of his speech he point out that
“good news [is] that the challenges I have discussed seem to revolve so much around changing behaviour and attitude.

  • Disciplined behaviour in underwriting
  • Changed behaviour in business process
  • An open and realistic attitude to technology
  • An inviting and inspiring attitude to talent
  • Engagement with government and society
  • The integration of regulatory needs into management behaviour

The biggest strategic challenge we face, therefore, is ourselves.“ (Prettejohn, 2005)

Regarding challenge in attracting the best talents Nick Prettejohn emphasized:

“Compete successfully for talent versus other industries that have been seen to be almost infinitely more sexy.

You need bright people to get the most out of data. You need creative people to assess risk… The industry should be much more confident and imaginative in its appeal to potential recruits. What we have to offer is significantly more interesting than many of the potential employment avenues that bright people chose.” (Prettejohn, 2005)

Other industry's experts also emphasize that in the nearest future financial service industry will change sufficiently. Allianz strategy citation

Result of the analysis (survey of “The enterprise of the future… in insurance industry”, 2008 of IBM Institute for Business Value shows that insurance SEOs concern about deal with external forces influenced on insurance industry development trends and plan to implement substantial changes inside their organizations in the near future. These forces include not only demographical shift, emerging technologies such as social networking and other web 2.0 tools, skilled workforce shortage. Other challenge which was emphasized in this paper is continuous trend of global integration and consolidation in insurance industry.

“The challenge is to integrate their operations so that they are making the most

efficient use of their operational and monetary resources, and most importantly,

their knowledge capital...” (IBM Institute for Business Value, 2008)

2.2. Forces and reflection

Due to nature of insurance and financial service business overall, the main value for companies in this industry is human capital. In following analysis I would like to examine in more details which trends will have the biggest impact on the human capital inside and outside organization.

2.2.1. Worldwide skilled workforce shortage

Ability to attract best talents, to retain them, to motivate creativity and to leverage employees' knowledge is crucial in creation added value for company and society.

From this perspective challenge of worldwide skilled workforce shortage has to be considered when developing corporate strategy in financial service organization. There are some reasons for this shortage: demographical shift (in the next 5 years, more than 1 from 4 workers will reach retirement age (Pasha, 2005)) , growing needs in skilled employees among different industries due to increasing complexity of work and technology development, expanding into emerging markets where standards of education are different from the developed world.

In order to overcome this challenge companies innovate in building of employer's brand. It is a growing trend among different corporations across the globe to demonstrate their commitment to ethics, social responsibility and sustainability of business overall. According to SHRM research about Top trends influenced on HR and workplace, 2009: “An increasing number of Generation Y employees weigh an organization's CSR commitment as a factor in accepting employment and remaining employed in an organization.” (Society for Human Resource Management, 2009) For instance company can attracts more employees by becoming “green” (reducing footprint emissions) or providing educational programs for local communities etc.(Allianz example)

Another direction of innovation in this area is to create more interesting working environment, stimulate creativity and motivate employees to develop their skills and abilities. In this context learning strategy implemented inside company have to address this challenge and serve company's learning needs in the most efficient way.

2.2.2. Generation gap: knowledge transferring and changes in customers behavior

It is widely discussed in the press the differences between generations and how to resolve problems related with it. First of all I would like to define this terminology. In this paper I will touch issues related with two generations “Boomers” and “Gamers” which are defined in a table below:

Table 1. Generations

Source: Some material from (Kapp, 2007)








Years of birth






This dividing into two generation based on differences in perceptions regarding knowledge, organizational structure, communicational channels, software, career, learning, informational processing, and technology comfort level. For example for Boomers preferable communication channel is face-to-face or telephone calls, when for Gamers - instant messaging, e-mail, SMS and so on. I will come back to these differences in the section about corporate learning.

Gamers are already prevail part of workforces and consumers when Boomers is near its retirement age. But the business processes of many corporations' especially formal learning and internal communications don't taking in account specific of Gamers psychology. In the past century incoming generation was integrated slowly and gradually, knowledge transfer process in organizations wasn't a big problem. In the current situation this transition is very fast due to demographical shift and even more difficult due to vastly differences in environment when these generations were grown up.

“Gamers have different ideas about connectivity, reporting hierarchies, learning and communication, all forgot while playing games, manipulating gadgets, and surfing the Web.” (p. 6, Kapp, 2007)

In the next decade corporations will faced with increasing number of retirement employees, and as result with necessity to train and educate new hires and ensure knowledge transfer.

This problem is become important for different regions of the world including USA, Europe, Japan, Russia and even China, when will be 265 million sixty-five year olds people by 2020 (p. 7, Kapp, 2007).

This trend creates at list two additional challenges for corporations:

  • Transferring knowledge from one generation to another, in fact to translate it from Boomers language (instructions, … into Gamers language images…)
  • Redesign marketing communications and distribution channels to satisfy needs of new type of customers from gamer generation (increase awareness, improve accessibility, include in customer relationships communities management and products' co-creation)

Changes in customers' behavior also have to be considered by financial services companies as a strategic trend. Despite of demographical shift (average age of population become higher), generation Y or Gamers generation has grew up and became part of customers' base. Gamer generation has different expectations, way of thinking and decision making processes. To approach them sales and marketing staff of organizations have to include people who can better understand their customers. This means that if an organization wants to be competitive in next 5-10 years, it has to take in account specific of its customers, differences in their life style, in their needs and especially in a way of communication. And to be able to do this, it is not enough to implement appropriate technologies but what is crucial it is necessary to change business processes, corporate culture and internal communications. For insurance industry this challenges can be especially painful due to very conservative nature of business, which wasn't sufficient changed for decades.

2.2.3. Changes in employees' attitude to work-life balance

Another trend which is also will have impact on the financial service industry future development is changes in social values, in particular general attitude to the work. Nowadays people care much more about work-life balance than they did in the past, and tendency to be more flexible and work from home or from different locations become more popular. Employees prefer to save time on commuting and spend more hours with family, friends or for different leisure activities. For instance: “The number of Americans who worked from home or remotelyat leastone day per month for their employer(“employee telecommuters”) increased from approximately 12.4 million in 2006 to 17.2 million in 2008


A39% 2 year increase and 74% increase since 2005“.


Companies are ready to offer flexible work arrangment for their employee in order to decrease spending on office space and to be able attract the best talents from the job market (According to The Edge Report, 2008 Robert Half International Survey, 72% of employees consider flexible work arrangment as one of the criteria when choosing a job place).

2.2.4. Graphical summarizing

I chart bellow provided a graphical scheme of main forces influenced on strategy for insurance company

As it was mention in the beginning to overcome future challenges and keep their competitive advantage, financial service companies have to consider changes in their employees' behavior, built new capabilities, improve business processes and develop appropriate learning strategy which can effectively support all this processes:

  • Build strong employer's Brand to be able attracts new talents.
  • Provide fast and efficient integration of new employees into company's business processes.
  • Ensure knowledge transferring from one generation of employees to another one.
  • Develop new capabilities to serve new types of customers and suppliers.
  • Improve business processes to compete efficiently with rivals, new entrants, and disruptive innovators
  • Be able to offer flexible workplace arrangement for their employees

3. Learning in corporations

In this section will be discussed the learning definition, how people learn and what is special about corporate learning, what kind of types of learning normally used in financial service organizations. Then I will summarize key differences in learning style and perception for Boomers and Gamers generations, find out the most serious weaknesses in traditional approach to corporate learning. At the end of this section I will provide some examples from different industries where already was implemented new type of learning.

During last decades attitude to corporate learning was changed sufficiently. Investment in human capital are growing and learning strategy became important part of overall company's strategy. In some industries spending on employees learning is the biggest investment which companies do. So, what learning is and how corporations can capture value from learning their employees?

General definition of learning which is widely accepted is:

“Learning is any relatively permanent change in behavior as a result of experience”

As we can see from this definition learning lead to changes in behavior (positive or negative) and based on experience. From corporate point of view learning processes have to be organized in a way to be able to create positive changes (valuable for corporation) and provide right type of experience (most efficient and effective in particular situation).

3.1.1. Corporate learning

For purpose of this Thesis I will use definition of corporate (organizational) learning as:

“The intentional use of learning processes at the individual, group and system level to continuously transform the organization in a direction that is increasingly satisfying to its stakeholders” (Dixon, 1994)

In this definition the most important words are ‘intentional' and ‘continuously'. It is important that using of learning processes (learning itself not necessary have to be intention) have to be intentional. In fact learning processes are existed in all organizations, but level of efficiency is different. When organization has clear understanding internal and external learning processes, able to analyze and use lessons from previous experience, it can avoids mistakes' repetition in the future and improve its business processes overall.

Intentional using of learning processes allows corporations to make transformation faster and more efficient. Nowadays business environment is very complex due to industry consolidation, vertical integration, interrelations among different industries, social-economic conditions, globalization, technology development, regulation and many other factors. High level of adaptability ensures company's growth and development and let it keep its competitive advantage.

“The essence of organizational learning is the organizations' ability to use the amazing mental capacity of all its members to create the kind of processes that will improve its own” (Dixon, 1994)

3.1.2. Formal and informal learning in corporations

In fact people never stop to learn, from everything what we are doing in our life we get some learning experience. Traditional tranings and seminars are only small part of corporate learning which we get at the workplace.

According results of ATOS KPMG consulting survey (2002) learning in corporations distributes in following proportions:

Types of informal learning

Types of formal learning

Experiencing on the job

45 %


10 %


30 %

Training programs

8 %

Mentoring & coaching

3 %

Special assignments

2 %

Manuals & instructions

2 %


80 %


20 %

This means that by using traditional tools for training and education their staff corporations can influence on only 20% of knowledge and skills acquiring by employees. And what is about informal part of learning? Is it possible to for management to facilitate it and to benefit from it? Corporate learning experts suggest different tools how to leverage this phenomenon in most efficient way.

Mark Harrison in his report “13 Ways of managing Informal Learning” point out that:

“It's dangerous to generalize around learning styles but some groups
of employees are likelyto be happier with informality than others”(Harrison, 2009)

He advised to work out the group of employees who is using informal learning more than others, observe how they do it, improve if necessary, promote its value, manage it (very careful, in supportive way and by using non-formal opinion leaders inside organization) and start cycle again.

The groups of employees who tend to be more interested in using informal learning despite of formal one includes (according classification of Mark Harrison):

  • “The information or knowledge workers
  • Senior managers
  • Established and experience staff
  • New starters”

(Harrison, 2009)

To stimulate informal learning for each of these group different tools can be used. The result would be better if company can assess needs of particular users. For example if the most of the users in the group belong to gamer generation, it is makes sense to use game technology in learning process. However for boomers it is an opposite: technology based solutions have to be implemented gradually and only in case of necessity.

In this paper we would examine two areas when immersive learning environment can be more valuable: induction informal trainings and best practice sharing for different types of employees.

3.1.3. Corporate learning for Boomers and Gamers

Corporate learning technologies were evolved during last decades. Along with traditional trainings and seminars corporations are using e-learning systems. According to … more than 70 % of corporations has LMS (Learning management system) for provide e-trainings to their employees. From interview which were conducted with Allianz entities there are some difficult with acceptance of e-learning inside the company. Main problem is that content is not interesting. For example compliance training: for Boomers it is not convenient way for this to use computer technologies, they would prefer to do this kind of trainings in traditional way (problems with passwords, complexity of procedure, not user friendly interface), for Gamers this training is very boring, poor graphic, low level of engagement.

“I don't see in standard e-learning a big innovation. In fact it is just changing format of delivery for trainings, not so much added value created by them.” (Deville, 2009)

In the table below I have summarized the main characteristics belong to employees from these two generations based on research of Karl M. Kapp (Kapp, 2007):

Table 2. Main characteristics Boomers vs. Gamers




“Me” generation, pioneered in concept of customized products and services.

Analytical / problem solver

Tend to have intuitive technical skills, problem solving strategies, and attitudes that just couldn't have evolved outside their digital world.


“Workaholic”, individual achievements recognition, obtaining success, profit-driving activities.


Have adapted to information overload by embracing the technologies that allowed them to be constantly informed and updated. They need to have multiple channels of input, otherwise they become bored.


Loyalty to brand, their work and social teams. Respect face-to-face meeting and build loyalty through physical meeting with others. Work well in a team with outside authority like manager or a boss.


Games are about winning. Gamers believe that competition is the law of nature and that they must always compete. But they don't want to win at all costs; they want to make the right decision that will provide the highest reward for the lowest amount of efforts.


Believe in crusades, ideals, and working tirelessly to see those ideals come to fruition


They are grown up searching information on the Web and playing games over and over again. They are willing to fail and then are able to bounce back and try the same thing again but in a different way


Due to huge life experience they become skeptical.


They think of themselves as working smart, not hard. This is why they believe in pay-for-performance system. They are confident they can accomplish whatever needs to be done; they don't want someone looking over their shoulder.


Playing the games they learn to delegate, take turns, relay on others for help, and work together to achieve a common goal. There is no authority figure, they are self-direct team. They are sociable, but not in a traditional way. Gamers don't make a call, they send messages. They do not require face time to be sociable; they use technology to socialize.

From this table we can see that there are some contradictions in a way how these two types of employees work and learn. For instance, these are different attitude to authority or to social interactions. Traditional organizational structure and business processes more related with Boomers perception. In the Thesis I would like to see situation from Gamers point of view, to analyze how innovative way of learning can be accepted by Gamers.

3.1.4. Collaborative learning in organizations

For purpose of this paper I will be use definition of collaborative learning as: “A form of peer learning that involves peers/student interacting to learn and involves interdependence of the students working toward the goal”

A form of peer learning (McKeachie, 2002, p. 187) that involves peers/students interacting to learn and involves interdependence of the students working towards the goal.

4. Immersive Internet Technology and Corporate Learning

This part is devided on two subsections regarding main business areas which are metter for the thesis: Internet technology and learning. In the beginning we would define what particular technology means is, how it was evolved, what is its advantages and disadvantages, current and possible applications, and future trends? Then we would provide an overview of learning concepts using in corporations. What is role of different types of corporate learning, how they evolved and what is a trend for their development.

In this section we would provide definition and description of emergine Internet technologies and common terminology which is using regarding this topic in literature and practice. In the begining Due to global nature of Internet and tendancy to consolidaition of different branches of technologies in one, situation when one element has variuos of names happens very often. Then we will see hprovide concept

This section includes definitions and describe common principles in corporate learning and internet technologies.

4.1. Immersive internet technology overview

Thanks to media everybody have some understanding about internet, web 2.0, social networking, search engines, instant messengers and a lot of other emerging technologies and etc. This list is depends on personal attitude to technologies and gadgets, professions and identity with boomer or gamer generation. “Immersive internet” doesn't have wide awareness yet, but it become more and more popular among HR specialists, especially in big corporations where e-learning was implemented.

4.1.1. Immersive internet what is it?

ThinkBalm.com defines the Immersive Internet “asa collection of emerging technologies combined with a social culture that has roots in gaming and virtual worlds.” (ThinkBalm, 2009). There is a principal difference between immersive internet and virtual reality: immersive internet much bigger than just virtual worlds, it includes 3D collaboration tools and applications, immersive learning environment, 3D intranet and serious games.

Immersive internet technologies have their roots in game technologies. With developing internet collaborative tools such as web 2.0 technologies, VoIP, advanced 3D models creative tools, it become possible to improve game experience, create on-line games and gamers' communities. As it was mention already, the gamers' population is increasing from year to year and become students and young professionals. So, step toward involvement immersive environment into educational and corporate learning processes seems logical. Interactive games are not any more just leisure activities; it's the way how new generation learns and collaborates in the schools, universities and workplaces.

Recent research done by IBM, Byron Reeves from Stanford University, Tom Malone from Massachusetts Institute of Technology (MIT), and Seriosity contains description of similarity between online gaming and future working environment. “Both of them:

  • Bring together large numbers of participants in highly complex virtual environment
  • Enable participants to self-organize, develop skills and take changing roles
  • Require constant risk taking, iterative improvement and the ability to accept failure
  • Provide incentives that are clearly linked to contribution and performance
  • Make participants' capabilities openly known
  • Require collaboration and leader who can influence collaborative approach
  • Provide sophisticated and varied communication channels”

(IBM Global Innovation Outlook 2.0, June 2007)

As we can see from this list games can be very useful in developing leadership skills especially taking in account increasing globalization of business environment.

Virtual office from screenshot bellow can be used for collaboration work or training in global organization. Employees can be located in different continents but communicate and interact with each other in real time (they can share screens or create virtual content). If we will add trainer in these group of participants we will get virtual class, which will be very similar in effectiveness with face-to-face trainings but cheaper due to lack of traveling expenses.

Picture virtual office

Immersive internet environment is a computer's implementation of virtual world that simulates environment and some of the elements in this environment act under the users' direct control. So, these users can influence on virtual environment simultaneously. Added web 2.0 elements link virtual worlds and improve communications among participants. For example social networking, blogging, rss, bookmarking and many others wide using tools can be used in immersive internet and ensure information exchange not only between virtual worlds but also support interactions with different existing information systems.

Despite its serious component immersive learning environment keep high level of engagement and motivate participants to be creative and collaborative. User-friendly interface and intuitive navigation make this environment suitable for users of different age and experience with technologies.

Corporations already use immersive internet technology in their practice.

There are some examples of business application for immersive internet environment:


4.1.2. What can we do in immersive internet environment what is impossible in real world

4.1.3. Perceptions associated with immersive internet technologies for corporate learning

If immersive internet so useful and create a great opportunities for global corporations, why not all of them using this technology in their operations?

It is expensive.

It is required special technical knowledge and skills

It is just for fun and has no practical value

4.1.4. Cost benefits.

5. Role of cooperative learning and collaboration in global financial service corporation and key areas of application

5.1. Industry specific regarding learning and collaboration

Global financial service corporations and insurance companies in particular have their specific needs and requirements regarding corporate learning and collaboration. There are three main factors defining this specific.

First of all, there are no (or not sufficient amount compare with other industries) tangible assets in organization such as manufacturing capacities, real estate, row materials and etc., the main asset for financial service company is its employees, their knowledge and expertise.

Second factor is related with global nature of the business and typical growth strategy for this kind of companies - by mergers and acquisitions. As a result, each subsidiary has high level of independence, local language, local business processes and different attitude to learning and collaborations due to culturological particularity, existed corporate culture and organizational structure. (provide example from Allianz)

Next factor, which is sufficient contribute to defining type of internal learning processes would be high level of conservatism characterized financial service industry overall. For example for bank or insurance company

Thus, corporate learning and collaboration tools using in global financial service company have to be very flexible, easy to use, take in account regional diversity, but on the other hand be enabling to integrate in conservative financial service environment.

5.2. Induction trainings and best practice sharing - key areas of application for cooperative learning and collaboration (based on strategic importance)

When company is defining its strategy

6. Criteria

In the previous sections was discussed what kind of learning is used in corporations, what is strategic challenges for financial service industry, how key trends will shape the financial corporations' business model and how emerging technologies can be used in corporate learning. Now I want to introduce criteria, based on which company can decide does it need to implement new technology in learning strategy or not.

These criteria were developed by Kineo, company which implement more than 400 learning projects in global corporations. Criteria help on practice to examine main characteristics identified by American Society for Training and Development as a key success factors for learning and improvement strategy.

“These are:

  • alignment (to overall organizational goals)
  • efficiency
  • effectiveness
  • sustainability” (Harrison, 2006)

In this paper I would like to elaborate each of the criteria to clarify how they can be used for assessing needs to implement immersive internet technology in learning strategy of financial service corporation. I also will examine if these criteria cover all key issues involved in evaluation of technology, what is possible intersection of them and define limitation of this approach which have to be consider in practical application.

6.1. Alignment with overall organizational goal

In fact this is a first thing which has to be considered. Technology can be very efficient, effective and sustainable by itself, but only link with particular strategic goal make this technology valuable for company. Otherwise

6.2. Efficiency

6.3. Effectiveness

6.4. Sustainability

7. Criteria evaluation based on Allianz SE

8. Trends in immersive internet and extended areas of application

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