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The race to scale up automation in financial services

Finance Trends 2019

By Terry Walby, founder and CEO of Blue Prism Cloud

 As financial services organizations look ahead to the new decade, they will be aware the next ten years are set to bring about dramatic changes in how they go to market and their service offerings and how they engage with customers.

Digital transformation and increasing consumer expectations will place heightened pressure on banks and insurance companies to deliver intuitive and personalized customer experience, far beyond what we currently see in the market.

Terry Walby

Terry Walby

This need for innovation will play out against a backdrop of worsening skills shortages and a fierce war for talent within the financial services sector. Businesses will need to find ways to maximize the productivity of their people and ensure they are deriving maximum value from key talent.

Little wonder then that banks and insurance firms are looking to scale up their automation programs over the next few years. Digital labor will be absolutely critical in delivering improved customer experience and ensuring compliance, whilst freeing up people from the mundane and repetitive to focus their efforts on innovation, strategic relationships and commercial growth.

Our recent research paper, ‘Taking Automation to the Next Level’ revealed the extent to which organizations are looking to accelerate their rate of automation and deploy digital labor in more strategic, business-critical areas.

Whilst just 7% of organizations currently claim to have automated more than 20% of all of their operational processes to date, this number is predicted to rise to 38% within five years, and as high as 50% within the financial services sector.

Interestingly, the drivers for this next wave of automation adoption are very different from the ambitions that organizations had when they first started out.

The quest for productivity

Banks and insurance companies have traditionally been at the forefront of automation adoption, using virtual workers to streamline back-office tasks across the organization, from HR and accounts through to contact centers and field sales.

For their early initiatives in process automation, financial services organizations were very much focused on driving efficiencies. Indeed, cost was cited as the top objective for automation by half (50%) of respondents, followed by increased productivity (25%) and improved business outcomes (17%).

This is re-shaping the way that leaders are now looking to identify the areas of greatest potential benefit for intelligent automation. Only a quarter (25%) are focusing on addressing the most under-performing processes; the vast majority (75%) are instead assessing the potential benefit of Intelligent Automation in terms of how it can provide key employees with tools to experiment. This represents a marked shift in thinking from where the industry was five years ago, or even two years ago.

More recently, however, the focus has shifted away from tactical deployment to more complex and strategic initiatives. Intelligent Automation (IA), which combines traditional Robotic Process Automation (RPA) with Artificial Intelligence (AI) functionality, now allows firms to automate a far wider range of workplace processes, faster, more effectively and securely.

As a result, the drivers for automation have evolved. No longer are banks looking to RPA technology to reduce cost; instead, they are ramping up their use of Intelligent Automation to tackle widespread skills and productivity issues.

We have reached a tipping point where automation is now less about tactical cost-reduction and more about customer experience, strategic growth and speed to market.

Financial services firms are re-defining how ‘work’ is resourced across their operations, based on the relative strengths and capabilities of human and digital labor. For business leaders, it’s a game-changer, providing the agility to respond to market disruption and adapt to regulatory change, and also to pursue new opportunities that would otherwise be impossible with a traditional approach to resourcing.

A third of strategy leaders within financial services believe that this type of Intelligent Automation could transform part of their business, whilst 8% feel that IA could in fact transform the organization as a whole.

Whilst automation strategy leaders within financial services were on the whole satisfied with the results of their automation initiatives to date (90% said their expectations had been met), only 17% felt that their efforts to date had exceeded their expectations.

This was strikingly low compared with industries such as utilities and the public sector, where 58% and 52% respectively felt that their early automation projects had exceeded expectations.

Part of this may be due to the sophistication of technology within financial services and their high expectations when it comes to innovation and digital transformation. Another factor may also be the relatively high level of operational efficiency that has traditionally existed within the industry.

Challenges to scale automation programs

However, another aspect undoubtedly at play here is the fact banks and insurance companies led the first wave of adoption of automation solutions. This meant that there was often little or no precedent to inform leaders as they developed their businesses cases and strategies for RPA adoption. In many cases, there was an element of trial and error and learning through mistakes.

The research reveals that automation leaders are facing a new set of challenges as they look to scale up their automation programs. On the operational side, these include difficulties accessing the technical skills they need and a lack of alignment between the IT department and other business functions. These issues were certainly around at the outset of automation programs but they have become more pronounced.

Evidently then, at a strategic level, the big challenge for automation leaders is how best to roll out digital labor at scale across multiple business units, whilst maintaining the visibility, control and consistency to deliver optimization. It is a question of governance.

Decentralisation of automation

Smaller, discreet automation projects are relatively easy to manage and control – usually with a central team of experts (both internal and external) overseeing and delivering the technology platform, skills and staff training required to introduce digital labour.

However, the research uncovers a widely held view, particularly within financial services, that such a centralized approach simply cannot deliver what is required moving forward.

The feeling is that if digital labour is to move from being deployed for specific use cases within pockets of the organization to more wide scale adoption, then skills, tools and ownership must be spread out throughout the business.

These are hugely exciting times for banks and insurance companies that are looking to scale up their automation programs and transform their operational models. The opportunities to pursue new business initiatives, develop new products and services and drive growth are almost limitless.

Without doubt, it is the ability of banks and insurance firms to build, manage and optimize this blend of human and digital labour that will decide the winners and losers in the 2020s.

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