TIAA (Teachers Insurance and Annuity Association of America) is a Fortune 500 financial services organization that is the leading provider of financial services in the academic, research, medical, cultural, and governmental fields. Founded in 1918 by Andrew Carnegie and his Carnegie Foundation for the Advancement of Teaching, today TIAA serves over 5 million active and retired employees participating at more than 15,000 institutions and manages $1.3 trillion in assets in more than 50 countries. TIAA is also the owner and operator of Nuveen, the investment management arm of TIAA. Nuveen is a leader in socially responsible environmental, social, corporate governance (ESG) investing.
In support of its mission to provide lifetime income and grow retirement savings for its clients, TIAA has embarked under the leadership of TIAA CEO Thasunda Brown Duckett on a comprehensive Digital, Data, and AI transformation of its Client Services and Technology Organization (CS&T). Sastry Durvasula, who serves as the Chief Information and Client Services Officer for TIAA, a role that he assumed in February 2022, is responsible for leading the global technology and client services organization and is a member of the company’s Executive Committee. In this capacity, he is spearheading the TIAA transformation initiative, known internally as CS&T 2.0. Prior to joining TIAA, Durvasula held roles as Global Chief Technology and Digital Officer, and Partner, at McKinsey & Company; Chief Digital Officer, and Chief Data & Analytics Officer (CDAO) at Marsh; and Global Head of Digital & Data Tech and Chief Information Officer (CIO) during a 15-year tenure at American Express.
Durvasula reflects on his mandate and the vision of TIAA, “Our transformation journey is integral to us achieving our mission in the face of America’s retirement crisis. TIAA is playing a leadership role in advocating for law and policymakers to improve retirement savings options with legislation such as the SECURE 2.0 Act. Our vision is to deliver lifetime income for all with investments that build a better world.” Durvasula notes the challenges that American families face today, in what he describes as a “retirement crisis”. He cites current data — 40% of U.S. households are projected to run out of money in retirement. The average household is expected to face a shortfall of more than $100,000. Durvasula notes that the problem is even worse for women and diverse populations. Women routinely live as much as 30 years after they’ve stopped working and retire with 30% less retirement income than men, and 54% of Black Americans do not have enough to retire.
A critical centerpiece of the CS&T 2.0 initiative is the transformation of TIAA into to a Digital First organization which relies heavily on the application of Data and Artificial Intelligence (AI) to build scale in the delivery of services to TIAA clients. The Digital First initiative is focused on delivering new digital experiences and customer journeys for business-to-business, business-to-consumer, and business-to-business-to-consumer customers. The Data & AI initiative builds on enterprise data management, privacy and security, data quality and data governance, data stewardship, and regulatory reporting, and introducing new and innovative AI/ML and Natural Language Processing (NLP) solutions, including intelligent automation of client services and emerging pilots in Generative AI.
Durvasula comments, “The power of analytics, combined with other insights that we use, enable us to deliver retirement solutions, products, new business segments, advice, services, and personalized experiences to our institutional and individual clients”. One example is AI-Powered Client Services, which through a partnership with Google AI, is allowing TIAA to revolutionize the way client services are provided to millions of participants, with several AI-powered use cases including personalized client experience, intelligent automation of the back office and other key functions of financial services, and advanced fraud protection. By applying Natural Language Processing and AI, TIAA has successfully launched conversational self-service, which has significantly improved client satisfaction scores and delivered efficiencies. Durvasula notes, “Our Client Services AI platform is powering next-gen experiences and intelligent automation of our operations, with much of these efforts intended to reduce complexity, deliver cost efficiencies and delight our customers”.
Another example of TIAA’s use of data, analytics, and AI is in support of ESG investing through the company’s Nuveen asset management arm. Nuveen’s Responsible Investing and Municipal Research teams used data and analytics to create a proprietary municipal ESG scoring framework which covers 92% of the holdings in the Bloomberg 3-15 Year Blend Municipal Index. Data also plays an integral role in the company’s commitment to net carbon zero. Durvasula comments, “We will provide five-year interim targets along this journey and will soon share good news about our first targets for 2025, when we aim to have achieved a 15% to 25% carbon reduction in the General Account’s corporate public debt portfolio and a 15% to 20% reduction in the direct commercial real estate portfolio. These ambitious targets put us ahead of the General Accounts of other U.S. insurers and our competitors”.
Many companies struggle to build a data-driven business culture, with only 20.6% of Fortune 1000 companies having achieved this goal according to the latest published data. To address this challenge, TIAA is on a mission to responsibly embed data & AI into decisions, interactions, and processes. Durvasula notes, “We are focusing on institutionalizing data governance so our products and services stem from a foundation of trusted data that is accurate and up to date. We are building an AI/ML development environment to seamlessly build, govern, deploy, and monitor models at-scale that power our products and help us create personalized experiences”. Durvasula continues, “We want our field agents and client services representatives, to have access to relevant, real-time, and personalized insights that make them more effective every day. We also want our plan sponsors and the consultants that work with them to have analytics that provide more benefits to their participants.”
Generative AI represents a potentially breakthrough transformational capability for companies today, presenting new opportunities as well as some serious challenges. How do companies like TIAA employ these new technologies safely and responsibly? TIAA has developed a Generative AI prototype called “Mr. Carnegie”, which leverages Generative AI/LLMs (Large Language Models). This will allow inquiries about complex subjects, such as SECURE 2.0, to be addressed with particularity as to specific retirement pursuits. TIAA is also experimenting with additional Generative AI use cases, including the ability to summarize benefits by parsing through complex contract documents and “creating agent assists and Field Consultant avatars”. Durvasula comments, “As technology continues to evolve, so does the way we work and interact with one another. At TIAA, we recognize the potential of the metaverse and have taken steps to build our own metaverse platform that offers a range of features that enable users to explore virtual spaces and interact with each other, from educational sessions with invited guest speakers to all-hands meetings and town halls, our metaverse platform provides a unique and immersive experience that is secure, intuitive, and fun”.
While many companies struggle to build corporate leadership buy-in and demonstrate that investments in data, analytics, and AI are delivering value, TIAA is undertaking some concrete steps in an effort to achieve these objectives. The Data & AI 2.0 program reports to a Steering Committee which includes highly engaged members of the TIAA Executive Committee. To measure and track the success of its data, analytics, and AI investments, TIAA has established “Critical 2 Success (C2S)” metrics to ensure that investments in data, analytics and AI are closely measured for all strategic business initiatives. The company has also overhauled its tech investment prioritization process and introduced cadences to ensure that technology delivery is propelling business, including the use of management reporting dashboards for the executive committee and Board.
Data, analytics, and AI are today playing a greater role than ever before across a range of TIAA initiatives. Durvasula concludes, “We are continually measuring the business value of our AI investments, ranging from product development to AI automation, and reduction in manual processes and handoffs in our client services”. As evidenced by these initiatives, TIAA is actively engaging data, analytics, and AI in an effort to transform a 105-year-old company and to operate as a socially responsible leader for the 21st century.
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