Karolina Ruiz Rogelj

2 results

Build a ML-Powered Underwriting Engine in 20 Minutes with MongoDB and Databricks

The insurance industry is undergoing a significant shift from traditional to near-real-time data-driven models, driven by both strong consumer demand, and the urgent need for companies to process large amounts of data efficiently. Data from sources such as connected vehicles and wearables are utilized to calculate precise and personalized premium prices, while also creating new opportunities for innovative products and services. As insurance companies strive to provide personalized and real-time products, the move towards sophisticated and real-time data-driven underwriting models is inevitable. To process all of this information efficiently, software delivery teams will need to become experts at building and maintaining data processing pipelines. This blog will focus on how you can revolutionize the underwriting process within your organization, by demonstrating how easy it is to create a usage-based insurance model using MongoDB and Databricks. This blog is a companion to the solution demo in our Github repository . In the GitHub repo, you will find detailed step-by-step instructions on how to build the data upload and transformation pipeline leveraging MongoDB Atlas platform features, as well as how to generate, send, and process events to and from Databricks. Let’s get started. Part 1: the Use Case Data Model Part 2: the Data Pipeline Part 3: Automated Decision Support with Databricks Part 1: The use case data model Figure 1: Entity relationship diagram - Usage-based insurance example Imagine being able to offer your customers personalized usage-based premiums that take into account their driving habits and behavior. To do this, you'll need to gather data from connected vehicles, send it to a Machine Learning platform for analysis, and then use the results to create a personalized premium for your customers. You’ll also want to visualize the data to identify trends and gain insights. This unique, tailored approach will give your customers greater control over their insurance costs while helping you to provide more accurate and fair pricing. A basic example data model to support this use case would include customers, the trips they take, the policies they purchase, and the vehicles insured by those policies. This example builds out three MongoDB collections, as well two Materialized Views . The full Hackloade data model which defines all the MongoDB objects within this example can be found here . Part 2: The data pipeline Figure 2: The data pipeline - Usage-based insurance The data processing pipeline component of this example consists of sample data, a daily materialized view, and a monthly materialized view. A sample dataset of IoT vehicle telemetry data represents the motor vehicle trips taken by customers. It’s loaded into the collection named ‘customerTripRaw’ (1) . The dataset can be found here and can be loaded via MongoImport , or other methods. To create a materialized view, a scheduled Trigger executes a function that runs an Aggregation Pipeline. This then generates a daily summary of the raw IoT data, and lands that in a Materialized View collection named ‘customerTripDaily’ (2) . Similarly for a monthly materialized view, a scheduled Trigger executes a function that runs an Aggregation Pipeline that, on a monthly basis, summarizes the information in the ‘customerTripDaily’ collection, and lands that in a Materialized View collection named ‘customerTripMonthly’(3). For more info on these, and other MongoDB Platform Features: MongoDB Materialized Views Building Materialized View on TimeSeries Data MongoDB Scheduled Triggers Cron Expressions Part 3: Automated decisions with Databricks Figure 3: The data pipeline with Databricks - Usage-based insurance The decision-processing component of this example consists of a scheduled trigger and an Atlas Chart. The scheduled trigger collects the necessary data and posts the payload to a Databricks ML Flow API endpoint (the model was previously trained using the MongoDB Spark Connector on Databricks). It then waits for the model to respond with a calculated premium based on the miles driven by a given customer in a month. Then the scheduled trigger updates the ‘customerPolicy’ collection, to append a new monthly premium calculation as a new subdocument within the ‘monthlyPremium’ array. You can then visualize your newly calculated usage-based premiums with an Atlas Chart! In addition to the MongoDB Platform Features listed above, this section utilizes the following: MongoDB Atlas App Services MongoDB Functions MongoDB Charts Go hands on Automated digital underwriting is the future of insurance. In this blog, we introduced how you can build a sample usage-based insurance data model with MongoDB and Databricks. If you want to see how quickly you can build a usage-based insurance model, check out our GitHub repository and dive right in!

March 6, 2023

Modernizing Core Banking: A Shift Toward Composable Systems

Modernizing core banking systems with MongoDB can bring many benefits such as faster innovation, flexible deployment, and instant scalability. According to McKinsey & Company , it is critical for banks to modernize their core banking platforms with a “flexible back end” in order to stay competitive and adapt to new business models. With the emergence of better data infrastructure based on JSON and the ongoing evolution of software design, the next generation of composable core banking processes can be built on MongoDB's developer data platform, offering greater flexibility and adaptability than traditional systems. The current market: Potential core banking solutions Financial disruptors such as fintechs and challenger banks are growing their businesses and attracting customers by building on process-centric core banking systems, while traditional banks struggle with inflexible, legacy systems. As seen in Figure 1 below, two potential solutions are the core banking “platform” and “suite”. The platform solution involves using a single vendor and several closely integrated modules. It also includes a single, large database and a single roadmap. On the other hand, the suite solutions refers to using multiple vendors, multiple loosely integrated modules, multiple databases and roadmaps. However, both of these systems are inflexible and result in vendor lock-in, preventing the adoption of best-of-breed functionalities from other vendors. Figure 1: Core banking solutions: platform, suite and composable ecosystem. A new approach, known as a composable ecosystem as seen on the far right of Figure 1, is being adopted by some financial institutions. This approach consists of distinct independent services and functions, with the ability to incorporate "best of breed" functionality without major integration challenges, multiple loosely coupled roadmaps, and individual component deployment without vendor lock-in. This allows for specialization and the development of advanced individual components that can be combined to deliver the best products and services and is better at adopting new technologies and approaches. Composable ecosystems with MongoDB's developer data platform MongoDB’s developer data platform is the best choice for financial institutions to build a composable core banking ecosystem. Such an ecosystem is made up of four key building blocks as seen below in Figure 2: JSON, BIAN, MACH, and data domains. JSON is a widely-used data format in the financial industry, and MongoDB's BSON extension allows for the storage of additional data types. BIAN is a standard that defines a component business blueprint for banking, and MongoDB's technology supports BIAN and embodies MACH principles. MACH is a set of design principles for component-based architectures, and data domains enable the mapping of business capabilities to applications and data. By using MongoDB's developer data platform, financial institutions can implement flexible and scalable core banking systems that can adapt to the ever-changing market demands. Figure 2: MongoDB, the developer data platform for your core banking system. MongoDB in action: Core banking use cases Companies such as Temenos and Current have utilized MongoDB's capabilities to deliver innovative services and improve performance. As Tony Coleman, CTO of Temenos, said, "Implementing a good data model is a great start. Implementing a great database technology that uses the data model correctly, is vital. MongoDB is a really great fit for banking." MongoDB and Temenos have worked on a number of new, component-based services to enhance the Temenos product family. Financial institutions can embed Temenos components to deliver new functionality in their existing on-premises environments or through a full banking-as-a-service experience with Temenos T365, powered by MongoDB on various cloud platforms. Temenos has a cloud-first, microservices-based infrastructure built with MongoDB, which gives customers flexibility while improving performance. Current is a digital bank that was founded with the aim of providing its customers with a modern, convenient, and user-friendly banking experience. To achieve this, the company needed to build a robust, scalable, and flexible technology platform. Current decided to build its core technology ecosystem in-house, using MongoDB as the underlying database technology. "MongoDB gave us the flexibility to be agile with our data design and iterate quickly," said Trevor Marshall, CTO of Current. In addition, MongoDB's strong security features make it a secure choice for handling sensitive financial data. Overall, MongoDB's capabilities make it a powerful choice for driving innovation and simplifying landscapes in the financial sector. Conclusion In conclusion, the financial industry is in need of modernizing their core banking systems to stay competitive in the face of rising disruptors and new business models. A composable ecosystem, utilizing a developer data platform like MongoDB, offers greater flexibility and adaptability than traditional legacy systems. If you’d like to learn more about how MongoDB can optimize your core banking functionalities, take a look at our white paper: Componentized Core Banking: The next generation of composable banking processes built upon MongoDB .

January 26, 2023