Enriching customer relationships in financial services: the role of automation

Since every major step forward in process efficiencies, in any industry, entails a moral consideration, it's no surprise that there may be some hesitation around its adoption in the financial services sector. My colleague, Jason Bell, recently discussed the pressing need for banks to transform into technology companies in his blog, 'The opportunity no bank can ignore'.

Jason discussed the emphasis often given to the year 2020 as a watershed year, pointing out how close it is. It brings many observations about baking futures into sharp focus, such as this observation from the Accenture article Intelligent Automation in Financial Services: "70% of financial services executives believe artificial intelligence will completely or significantly change their organization by 2020." Without doubt, Artificial Intelligence (AI) and Robotic Process Automation (RPA) are powerful efficiency drivers essential to the forward momentum of digital transformation. The moral side-bar is the impact these technologies may have on job.

Doomsday or new dawn?

In 2013, an Oxford University research paper, The Future of Employment: How susceptible are jobs to computerisation?,  predicted that up to 47% of workers in the US economy were at a high risk of being replaced by robots in the medium term. 

It was a paper that set the tone for a debate that continues today. AI, Machine Learning and RPA are changing the way we do things. Estimates may vary about how many jobs are “at risk”, and in what kinds of occupations, but the general  consensus is that this change is not only inevitable, but is hugely beneficial to the enterprise and, ultimately, the customer.

Clearly, for some, automation is more of a threat than for others. Repetitive manual tasks on production lines and in factories and warehouses have been transferring from people to robots for decades. Whether this is a positive development or not depends on your perspective.

Customer service leans on automation

Where do banks fit into this discussion? In many ways, the financial sector is a prime mover of automated processes. Consider ATMs, for example, the very first of which, according to TIME magazine (Top 10 things you didn't know about money) appeared in London in 1967.  This was effectively the deployment of robots in the front line of retail banking operation; in this case, Barclays. ATMs can be considered as robotic cashiers. Now AI, machine learning and robotics is enabling machines to perform increasingly complex tasks.

Agile FinTech start-ups are innovating with new business models made possible by cloud computing and big data. The approaches these organisations have brought to the sector are being embraced by traditional organisations. Again, I'd refer you to a blog by Jason Bell, 'The importance of harnessing FinTech thinking', which explores the growing trend towards partnerships between traditional organisations and FinTech innovators.

As so much about the sector is subject to essential change, the streamlining of core processes through automation is rapidly becoming key to survival in the future for banks, insurers and other institutions. I'd suggest that the moral issue is less about jobs that may be affected by automation, but rather how many jobs may be affected within organisations that resist it.

Customer service and the customer experience lean heavily on automation. Customers have greater flexibility than ever before. Slow service can make or break customer relationships. The choice in terms of aggressively pursuing an automation strategy is based not on job losses, but on potential customer churn. 

The business value of Robotic Process Automation

RPA is a powerful enabler. It equips financial services organisations to meet the demands of the digital economy. It enables such organisations to achieve operational efficiency gains without compromising their core responsibilities around security, data quality, operational resilience, and the creation of robust and reliable audit trails, 

RPA mimics the function of industrial robots by automating repetitive, rules-based tasks,  without any requirement for specialised hardware. Processes can be streamlined and improved by introducing a layer of process automation over the existing IT infrastructure, enabling higher workflow volumes to be handled more quickly, at lower cost and with less opportunity for human error.

Typical processes where RPA delivers optimum value include:

• Rules-based, high-volume and intrinsically digital processes, requiring interaction with one or more of the organisation’s operational systems.
• Client on-boarding
• E-form data extraction and upload
• Compliance, legal, credit and identification checks

In terms of the moral consideration, where does that leave the sector? For the enterprise, the economic benefits of automation are unarguable, but what about the employees?

Smart machines liberate smart people

In an industry undergoing the most disruptive and transformative period in recent history, there are no guarantees. There are key differences between the financial sector and, for example, manufacturing, that could produce very different outcomes for employees as more and more of the workload is handled by machines. The key is in the word “services”.

The provision of financial services is about serving  people. It's a people business. It depends on talent within the organisation. People will not be valued less simply because they become empowered to do their jobs better.  

With RPA, people are supported by being relieved of repetitive work that doesn’t require much in the way of thinking. Machines do it faster and deliver greater accuracy. This frees up people to add more value more meaningfully; relating to customers, creating ideas and innovation, enriching customer relationships in ways that robots will not be able to replicate for the foreseeable future. Not before 2020 anyway.