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James Hall

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James Hall - Genfour

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Financial Services: The next frontier for robotic process automation

11 October 2016  |  9323 views  |  1

The financial services and banking industry has undergone significant change over the last decade, and today, automation is at the forefront of this change. Robotic process automation (RPA) is revolutionising the way that banks execute basic processes, and not a moment too soon.

In terms of drivers for automation in financial services, while IT are still running the show, there is a bigger push from those focused on improving quality and control within banks. Reducing human input error, improving compliance and expanding the value-added tasks in people’s roles are all new focus areas, and ones that live alongside the enduring requirement of saving costs where at all possible.

With growing demands from regulatory compliance programmes, it’s safe to say that banks are growing weary. And while they continue to look at to the back office for new efficiencies and cost savings, many are unable to meet these challenges due to the limitations on time from slow software and constant compliance reporting requests.

These limitations are what makes banking such a prime candidate for intelligent automation. Legacy systems are never going to be phased out as quickly as digital leaders would like. Yet the dozens or hundreds of low value and high volume tasks performed via these systems daily lend themselves very well to standardisation and automation, which can scale (up or down) so simply.

Whether it’s RBS applying ‘advanced humans’ to help staff answer customer queries or the introduction of robo advisors to deliver investment advice to the masses, banks have been tapping into the power for automation for some time. While the benefits of robotic process automation in financial services are numerous, how do people working within the industry feel about automation?

Attitudes Surrounding Automation

Released in July, the findings of the 2016 Robotic Workforce Research into the perceptions of automation in today’s business found that over half of global business leaders are open to the idea of automating their back-office, with 94% open to doing so through Robotic Process Automation.

As part of the survey, leaders in financial services were asked to communicate the extent to which their business were looking to adopt intelligent automation (i.e. Robotic Process Automation, Cognitive systems or Artificial Intelligence) at department or board level.

Respondents were asked to rate the extent of adoption on a scale of 0 to 5 – with, 0 being not at all, and 5 being committed to adopting robotics.

IT emerged as department that financial services and banking leaders were most committed to automating, with 60% of respondents rating it as either a 4 or a 5 on the commitment scale.

Finance (54% rated 4 or 5) and HR (42% rated 4 or 5) were second and third on the automation commitment scale by Financial Services professionals.

What the numbers tell us is not surprising – IT is an obvious place to start. Beyond this, RPA is particularly well suited to the often varied and dated IT environment of many financial services firms because the processes can sit alongside this existing IT infrastructure, with no extensive integration requirements. Finance and HR featuring prominently in the survey results is also not a big surprise, and as RPA becomes more mainstream across organisations, it could be that IT becomes a secondary driver.

What is also becoming apparent to us is that there are other areas where automation is proving significant positive outcomes in financial services. Automation is helping to reduce costs amid a landscape where competition, complexities and regulatory regime are all challenging the banking bottom line. By making tasks more predictable and easier to control, automaton is also improving performance and process quality.

Automation is also helping banks to differentiate. With the market becoming more crowded, banks are recognising the need to stand out from the crowd. Automation is also helping banks to build speed in to processes so that new products and services can be brought to market faster than the competition, without any changes to backend systems.

As the combination of high transaction volumes and increased regulation places a premium on banks’ ability to maintain appropriate levels of control and streamline operations, automation will increasingly be applied to an even wider variety of tasks. From the robo adviser to the automated back office, financial services will continue to be a frontrunner in the digital age, and an early adopter in robotic process automation and artificial intelligence.

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Comments: (1)

A Finextra member
A Finextra member | 17 October, 2016, 11:34

I like what you said about automation being more than a temporary boost in efficiency and acting instead as a strategic differentiator. Not many have this high arching vision. Maybe it's because things are still too fresh inside the domain, not enough use cases etc. I would however be cautious when placing robotic process automation and artificial intelligence in the same basket. RPA is now reaching maturity while AI is still bursting with hype.

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Financial Services: The next frontier for robotic process automation

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James founded Genfour in 2012. He was driven by a strong belief that back office processes could be more effectively operated utilising new automation approaches. Genfour has since grown rapidly and n...

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