Oh no! You know that feeling? You know that one, when you open the washing machine door and your white bed sheets are pink? The feeling when you realise that you just took everything out of your laundry basket and put it in the washing machine because you were in a rush. The one that wishes you had checked for red socks before committing? That one!
Well, that feeling (x1000) is why many financial services companies are rapidly turning to process automation. That’s why global research firm Gartner estimates that 60% of organisations with annual revenue over $1 billion will have deployed robotic process automation (RPA) tools by the end of this year. That’s also why Deloitte estimates universal adoption of RPA in 5 years’ time.
Hang on, haven’t we spent the last ten years automating and optimising?
Well, yes. The idea of business process automation isn’t new. Robots have assisted with car manufacturing since the 1960s. Mail-Merge became a feature of word processing in the 1980s. Self-service checkouts have been in supermarkets for 20 years. And, of course, Siri, Cortana, Alexa and Google Assistant have come into our lives more recently. Each of these has automated the mundane and repetitive steps in a process to save time and improve productivity. But it’s not enough.
This kind of incremental productivity improvement isn’t enough to maintain a competitive advantage in 2018. In the past, companies could make efficiency savings by simply consolidating their complex, repetitive business operations and moving the process to an offshore team. Today, businesses are under intense pressure to transform their operations, improving productivity much faster and more sustainably than ever.
This pressure is particularly true for banks, insurers and investment companies. These industries have applied lean processes and made significant cost savings as the pressures of the global financial crisis has piled the pressure on margins. Just as they were getting to grips with underlying inefficiencies, senior managers are now faced with navigating the disruptive pressures from Fintechs – from digitally savvy customers and from burgeoning regulatory and compliance requirements. So, what can they do?
Robotic Process Automation (RPA)
Robotic process automation uses software to manage the tedious, repetitive (and seemingly endless) rules-based tasks, currently performed by millions of employees. It’s particularly helpful in financial service companies which have highly complex, regulated processes, where data is scattered across legacy and third-party systems.
A big benefit of RPA is that is doesn’t need significant IT investment to overhaul underlying technology systems. The bot works with your existing IT system, logging on and imitating a human employee. Management consultants McKinsey describe the process nicely. The robot has a user ID just like a person and can perform rules-based tasks such as accessing email and systems, performing calculations, creating documents and reports, and checking files.
What can RPA do for me?
Instead of spending hours endlessly pressing Control + C, Control + Tab, Control V, your RPA bot can complete the task faster, with 100% accuracy and 24/7.
For a retail bank, CTOs looking at their slow-moving legacy back-end, IT systems and comparing them despairingly to the nimble systems of Millennial favourites, Monzo, Starling and N26, RPA offers an exciting opportunity. Oded Karev, vice president of advanced process automation at NICE sums it up: “For big legacy providers that have been buying computers since the 1970s, RPA fits best. It means they can speed up the process and automate areas of the business without rebuilding their entire system.”
KPMG research tells us that RPA can cut costs for financial services firms by up to 75%. Processes related to Anti-money laundering (AML) and know your customer (KYC) are both regulation and data-intensive processes. Much of the processing is repetitive, replicable, and routine – characteristics which make them excellent candidates for RPA.
According to Raja Subramanian, at tech services company Xchanging, bots-processing insurance-related tasks, can clear more than 30,000 cases a month. That reduces processing time from five minutes to less than ten seconds. As humans typically make as many as 10 errors in each 100-step process, automating some of these error-prone tasks, financial service companies can rest easier that they are delivering regulatory compliance. What’s more, people who work with bots love them.
Research by NICE shows that 80% of worker hours are spent on dull and unfulfilling tasks. Likewise, the survey by online learning platform Udemy reports that 43% of workers are bored at work. It’s not a surprise that workers are happy for bots to do the bits of their jobs that they hate.
The next big thing in digital transformation
So, it’s little wonder that a software-approach to process management that RPA offers is seen as the next big thing in the digital transformation of financial services. Because bots are fast and 100% accurate, RPA can deliver both efficiency savings, improved compliance and better customer experience – all of which deliver commercial value. The icing on the cake (or the red sock out of the washing machine) is that, by automating repetitive tasks and putting them in the hands of bots, senior managers are giving employees permission to focus on deeper thinking and creative work. That ultimately helps businesses to attract and retain their best people.
Want to talk about productivity and the role of automation in your own organisation? Contact us or drop by our office for a chat.