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As IT and back office transform what happens to RPA?

Having got involved in both robotic and cognitive automation in banking, I am coming across several interesting, deep questions. For example, robotic process automation (RPA) is touted as a great choice where the business case for automation does not make the cut for IT to take it up. This requires careful thinking.

Shouldn't the threshold to push projects through IT drop as IT becomes more agile, nimble and reactive to business needs? Isn't that what agile and devops are about? Also the larger question is - what happens to RPA-led automation when the entire back office transforms to adopt hyper automation, high STP rates, and low latency eliminating manual interventions, drudgery such as data entry/ checks, and cognitive automation that can adapt to more unstructured and variable inputs, etc.?

If a bank is strapped for cash to transform its back office and legacy systems and continues to spend a lot in business operations that hide the complexity of the back office, RPA is definitely a good fit. But if the bank has already transformed or is transforming its back office systems, the role of RPA needs to be looked at carefully. More than savings in business operations costs, the larger business benefits of core transformation vs robotic automation need to be weighed carefully. Rather the roadmap for back office transformation needs to be laid out and then, RPA should fit this roadmap with a migration plan.

Banks accepting the current state of the back office and core systems and embarking on RPA-led business operations cost reduction may end up painting themselves in a corner in future. Avoiding such a scenario should be the responsibility of the automation consulting partner engaged by the bank.

Who is your automation consulting partner?

  • Are they taking such a wide perspective before recommending your automation roadmap or are they just partnering with vendors and showing you how many FTE's you can save through RPA?
  • Are they looking at your processes for simplification, elimination and broader digitization before jumping on robotic or cognitive automation?
  • Are they asking you to consider simplifying the entire business itself before launching automation?
  • Are they looking at reimaging the relevant customer journeys before automating?

Interplay of various aspects of banking transformation

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 March, 2018, 14:27Be the first to give this comment the thumbs up 0 likes

IMO, RPA is going to push out the core transformation talk by a decade - yet another decade, that is - and will help banks once again defy doomsday predictions by finsurgents that banks with legacy core are doomed e.g.

Can you please throw some light on what "painting themselves in a corner" means and why "Banks accepting the current state of the back office and core systems and embarking on RPA-led business operations cost reduction" will suffer that fate?

Hari Subramanian
Hari Subramanian - Wipro - Greater New York City 14 March, 2018, 05:51Be the first to give this comment the thumbs up 0 likes

Thank you for the comment. If a bank continues with old main frame based core systems or postpones much needed fundamental changes to core platforms for competitive advantages (e.g. Fidor's treatment of account as a marketplace of services, API banking, etc.) for the sake of business operations cost reduction through RPA, it is painting itself into a corner. In future, it may be too late to bring those transformations to its core systems.

I never implied RPA is not needed or is bad. It is just that RPA needs to be looked at periodically as the core transforms and not in isolation at the cost of avoiding core transformation.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 14 March, 2018, 08:16Be the first to give this comment the thumbs up 0 likes

Nope I disagree. Banks with mainframes have not lagged behind banks without mainframes when it comes to launching latest and state-of-the-art products. Arguably, they're ahead: Most pathbreaking financial products across the decades have been invented by banks on mainframes e.g. Credit Card, ATM, MBS, CDO, CDS, and Algo Trading. If that sounds counterintuitive, it's only because parties with vested interests have tried to create a link between innovation capability and open systems. In reality, as dozens of banks have shown, this link is highly tenuous - capacity to innovate is driven by many more factors than just mainframe v. open systems. If open systems purveyors stopped playing their broken record and making "it may be too late" kind of threats to mainframe-using-banks, they may have better luck at changing the status quo, which is currently Banks Can't / Won't Transform Legacy Applications.