Automation is helping industries transform – directly in some businesses and indirectly for many others. A look at running cost of banks gives a totally different picture. Today, ‘run the bank’ systems take 70-80% of the overall IT budget… and it has to change.
How has it evolved?
Core banking adoption across banks took almost 20 years (1980-2000), Internet banking another 10 years (2001-2010) and mobile/wallets took shortest time. Despite technology adoption and increased use of channels it didn’t have much impact on cost although increased the customer convenience. (Should it really cost this much to run a bank?) Gains through off shoring, captives and outsourcing are slowly disappearing with added cost of security, compliance and risk.
The next frontier for banks without any doubt is digitization (2017-Strategic Priorities) – and automation (RPA) is at forefront of this…. it reduces cost, improves customer experience, helps in compliance, mitigates risk of human errors and most importantly enable digitization.
Since banks have a very high degree of IT usage in operations, it makes them an ideal candidate for automation (RPA).
Certain very apparent advantages –
Efficiency improvement – Augment staff capability and capacity by 40-60%
Reduction in error rate – Reduce human errors and dependencies.
And some not so apparent benefits –
And nothing can stop banks – No more excuses
And to the tough question – Will my folks lose jobs..
Yes and No. This is not first time machines will be helping amplifying human capability to achieve more. But it has only changed the way work is done and who does what. There will be a redistribution of work and skills. A set of people, who might move to something better and more challenging and with the existing know how of processes, products and customers, it might be a better utilization of the resources.
With banks increasingly adopting automation, there is little to choose from. Either, Automate and be the more efficient bank to survive OR competition will make you redundant sooner than later.
I am keen to hear your views on the topic. Comments are welcome and you can reach me for discussion on how automation can help your bank. It may not be as simple as it sounds and one needs to be aware of pitfalls in adoption of automation technologies and various modes of deployment.
In embracing the automation journey, there will be quick wins followed by next level of challenges. (Do Bots have their own Ids)? How to handle underlying system changes? What to do if assembly line gets stuck? And so on…). Nonetheless, it’s an interesting and rewarding journey for the organizations.