How RPA can benefit financial services firms
Robotic process automation (RPA) presents significant opportunities for companies to automate redundant tasks, freeing up humans to work on more challenging and rewarding projects.
Used judiciously, RPA can speed up processes, clear bottlenecks and enable your team members to use their creativity and innovation for the benefit of your customers. It also has tremendous cost-saving potential — up to 75%, according to accounting and consulting firm KPMG’s Rise of the Robots report.
In the financial services industry specifically, RPA doesn’t just cut costs; it can also contribute significantly to the bottom line. Juniper Research estimates that RPA revenues in banking will reach $1.2 billion by 2023. That’s a 400% jump between the $200 million RPA raked in during 2018. It’s also a testament to the rapid adoption currently underway.
But, there must be a balance. Automating too many tasks and processes, or the wrong ones, can harm the customer experience and reduce the all-important human touch, leading to an erosion in trust. In a field like financial services, where building customer trust is paramount, it’s critical for brands to have a thoughtful strategy around RPA — specifically, knowing where and when to implement it, and at what pace.
Why RPA makes sense for financial services
Though the term RPA includes “robotic,” there is no application of physical humanoid robots in the traditional sense. Rather, RPA involves software applications, akin to macros inside Microsoft Excel, that enable automation of basic processes like filling out forms; extracting, merging and formatting data; copying and pasting information; reading and writing databases and more.
While RPA has been in use for more than a decade, particularly in insurance companies that use it in their underwriting process, its potential applications continue to grow and evolve. For instance, RPA can help financial services companies provide 24/7 support for important activities and processes. “By using RPA and IPA [intelligent process automation], financial institutions are finding they can get the real-time support they need, and they can use staff more strategically,” according to a PwC article.
The best part of RPA is that there’s no need to build new technology infrastructure or radically change existing processes and workflows. Rather, it’s possible to layer intelligent automation on top of existing structures.
Financial services and the digital customer experience
Learn about trends, trust and technology in the evolving financial services industry.
Specific RPA applications for the financial services industry
One important application of RPA in financial services is in the area known as roboadvising, a popular fintech application that automates financial advising and investment management. Juniper Research predicts that by 2023, the roboadvising industry will have $4.2 trillion under management, at a growth rate of 60% per year.
That isn’t to say that investors don’t care about human-driven customer support. Juniper found that customers tend to prefer hybrid solutions that combine the best of RPA with the human touch, which together provide optimal service to customers. Herein lies an excellent opportunity for legacy banks. They can harness lower-cost, automated investment options like roboadvisors while still offering high-touch, personalized support in-person, and by telephone and email.
Direct customer service isn’t the only area of a business that can be helped by RPA. In financial services, RPA also excels at work that is repeatable and logic-driven, and can also be used to manually bridge between legacy systems. For instance, according to PwC it can help with trade mismatches, management reports, regulatory information, account management, asset servicing and data remediation. It can even aid in ‘know your customer’ (KYC) efforts.
Key considerations for implementation
Despite the rush to install RPA, many implementations face a number of challenges. That’s because companies too often use a “plug-and-play” approach without clearly defining their goals, or the cultural impact automation will have. Companies may treat an RPA implementation like they would introduce a new piece of software, without considering its unintended consequences.
While RPA doesn’t require a huge employee retraining or reengineering effort, it does lend itself to the need for upskilling talent to manage more higher-value work. In other words, their job functions don’t fundamentally change, but the mix of their daily responsibilities does.
Still, not all processes are ripe for automation. A simple guiding principle: Automate what is simple and stable, rather than what is complex or potentially costly to automate without additional work. “In general, it makes sense to start with activities that are more rule-based and more repeatable,” according to PwC. “But you need to start with understanding the processes, because doing the wrong things more efficiently doesn’t benefit anyone.”
To get RPA right, a number of consulting firms have developed their own proprietary processes for implementation. For instance, digital innovation and customer experience firms like TELUS International can bring a hybrid approach that blends human capital with RPA to create more seamless transition to the world of RPA in financial services.
RPA is indeed poised to take the world of financial services by storm, as evidenced by its rapid growth. The benefits for those that move quickly are significant, so it’s important to formulate a thoughtful strategy and get started sooner rather than later.