| Robotics and intelligent automation continue to be hot topics inside financial institutions, primarily due to the promise of quick cost efficiencies. While there are certainly rapid topline benefits to be gained, the real opportunity for organizations to drive value is through a holistic approach.
Unlocking the full potential of automation lies in transforming how work is done, which encompasses both the many emerging technologies as well as the human workforce to drive efficiency and extend competitive advantage. While many institutions across the industry are realizing near-term gains today as a result of robotics deployment, others are experiencing disappointment because their programs have failed to yield the scale of benefits possible or because they have struggled to extract the full value in each opportunity.
To avoid such setbacks, banks need to approach robotics and intelligent automation in a strategic way that will maximize long-term, sustainable benefits. Fortunately, there is a clear way forward. There are a number of leading practices that banks can leverage based on successful implementations. Here are three critical insights that institutions should consider as they draft their blueprints for transformation and determine how robotics and intelligent automation fit into their future.
Automation is a tool for process change, not the change itself. Embarking on a holistic robotics program presents a golden opportunity to improve and enhance critical business processes. This starts with challenging how a process output is achieved, not just individual process steps. When automation accompanies a little old fashioned re-engineering, the resulting process is an efficient flow of work optimized for a human workforce alongside a digital one. Consider whether to:
- Reorder process steps to consolidate or sequence automated steps together
- Introduce enabling technologies such as OCR or data classification to improve the scope and structure of data in which the automation tools can operate
- Redefine roles so the new human responsibilities are clearly defined and appropriately staffed
Banks should look for early automation opportunities that fit the profile of being simple but impactful to demonstrate the program’s value and establish early momentum. Simplicity in early days helps to both streamline the automation design as well as test the supporting systems environment. Examples of low-hanging fruit may include quality assurance and quality control functions (such as verifying data on loan applications), reconciliations and reporting.
For example, one regional bank started its program by automating debit card fraud claims and chargebacks, a process that is both manually intensive and relatively high volume. Automation (and process change) not only made this process more efficient, it offered the added benefit of lowering the break-even point for fraud investigations because automation decreased the transaction cost of the process. With the ability to conduct more fraud investigations, the bank can now recover additional hard dollars that otherwise would have been written off.
Change management is essential to instill the fundamental workforce change that automation brings. It’s also critical in making sure business-line managers embrace and support this new way of working alongside robots. The long-term success of investments in robotics and intelligent automation relies as much on the people as it does on the machines. Management teams need to help their human workforces understand the value automation brings and the role it will play in their work.
Automation brings changes to all work activities – and job descriptions – that it affects, which can drive confusion and worry. Proper communication and planning can help leaders avoid this “automation anxiety” and keep their teams engaged and focused. Equally important to keep in mind is that transformation through robotics and intelligent automation is a journey. Organizations need to create a culture and methodology of ongoing change management that is sustainable over time as technology, business processes, roles and the competitive environment change.
Managing for scale helps to prevent early hurdles that can stall the entire program. Robotic implementations cannot be managed successfully as just another tool working at the business/function or end-user level.
At scale, it takes a village to manage and sustain robotic implementations. A clear and active governance structure will help all stakeholders to be coordinated and do their part, from business owners to HR, risk and IT. Some organizations are finding success with a federated model in which an enterprise group runs some robotics functions centrally, e.g., vendor management, while individual lines of business control process identification, deployment and business cases.
In addition, a standardized set of control functions help to monitor and measure what the robots are doing at all times. This provides valuable transparency necessary to fix problems, monitor performance and make improvements over time.
Another consideration is the careful planning required for the infrastructure to house and maintain the robots over time. While not urgent at a small scale, centralized maintenance and support become critical as automation assumes responsibility for large parts of business processes across dozens or hundreds of robotic licenses.
Robotics and intelligent automation represent powerful and evolving technologies that are already changing the way we work and live. The vast majority of their potential still lies ahead. While there is justified exuberance over the simplicity and ease of automations, organizations should take a long view of these new technologies as they begin the journey. The power of robotics and intelligent automation is substantial when managed well.
Christopher Harris, principal at EY, is the leader of the business and operations improvement practice. He can be reached at christopher.harris@ey.com.
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice.
