While the largest institutions embraced RPA a decade ago, the sector’s middle tier has yet to automate on a large scale. In the new normal, their ability to compete could rely on doing just that.
Here’s why the financial services sector still has so much automation potential.
It’s heavily regulated, which makes errors and delays costly
From how you take on and communicate with a customer to what you report and when, financial services firms have to constantly prove to the regulators that they’re doing things by the book.
Any business that does things repeatedly, accurately, and to the letter of the law will be ripe for automation. In financial services, know your customer (KYC) regulations are a great example.
Done manually, KYC involves multiple people checking multiple sources. This leads to both delay and error. Automation software handles KYC quickly, comprehensively, and with complete compliance.
It’s mature, which makes cost reduction vital for profit growth
Financial services is not a fast-growing sector. It’s been a huge part of the UK economy for many years, and this maturity means that profit growth comes mostly from cost reduction.
The sector adapted rapidly to lockdown. But remote working will cause problems eventually. How do you ensure people are working as accurately and efficiently at home as they would in the office?
With RPA, you can identify the pain points in your complex processes and give those parts to a bot. The efficiency benefit this could bring to your regulatory reporting, for example, is enormous.
It’s consolidated, which means systems don’t communicate well
Alongside cost reduction, acquisition is a key growth strategy in financial services. Over time, this consolidation has created an industry that is essentially a lot of businesses stuck together.
To deal with complex legacy systems, a typical middle market insurer has teams of people dedicated to entering, moving, and checking data. What happens when a customer dies is a perfect example.
The deceased may have had multiple accounts, managed in different systems. Manually pulling together this information can lead to errors and a poor customer experience for the bereaved. RPA bots can build a complete picture so that your staff can provide a high-quality, human service.
It’s based on contracts, which creates constant data entry needs
Financial services firms are not like Amazon. They don’t deliver physical things, the next day. They agree to provide a service in the future, and they write those agreements down on paper.
Add to this the sector’s highly intermediated make-up, and you’ve got chains of people entering the same data into different systems. This creates endless data re-entry work and potential for error.
With RPA, a routine process such as changing customer names and addresses can be automated to give you complete confidence that data is being passed accurately all the way along the chain.
Resilience and cost reduction drive will raise RPA’s profile
Productivity has dominated the sector’s boardroom conversations for years. But resilience is the hot topic, and cost reduction will soon dominate the agenda. Automation will be key in these plans.
For mid-sized firms, the ability to paint a complete picture of a customer quickly and accurately could be the difference between competing with or losing ground to the competition.
RPA provides a fast, accurate, 24-hour digital workforce. Any firm with concerns about speed, quality, and compliance must embrace the opportunity offered by robotic process automation.
We can help
Our Technology and Management Consulting team has been helping financial services firms in the insurance, building society, and asset management sub-sectors to implement RPA for years.