Antti Karjalainen, CEO and founder of Robocorp, talks about how RPA tech is redefining the finance industry by reworking their insufficient data processes that negatively impact their bottom lines. He further discusses the financial industry’s tech challenges and how RPA can solve them.
Â Over the past few years, banking and financial service organizations have seen particularly challenging hurdles in new competitors, workforce shortages, complex regulations, and increased shareholder pressures. As a result, customers and investors are gravitating to startups that apply technology in innovative ways to serve the changing landscape.Â
Â Financial institutions need to anticipate the future as much as possible and develop methods to respond to the effects of market forces. By â€œfuture-proofingâ€ their business models and operations, banking and financial services companies can remain valuable to their stakeholders in the long run.
The Key to Future-ProofingÂ
McKinsey’s 2021 Global Banking Annual ReviewOpens a new window report highlights three key characteristics of financial services companies that make them attractive to customers and investors and help bolster their business models for the future.Â
- They are embedded in their customers’ lives â€“ with more touch points and engagement â€“ using digital channels to solve specific customer needs and a personalized experience to keep them engaged.
- They adopt a sustainable economic model that is less capital-intensive and more focused on customer monetization through fees and commissions.
- They are faster, more flexible, and invest in talent and technology that delight customers.
Â A key lever to achieve these goals is robotic process automation (RPA). From customer acquisition, customer service, enterprise support, and compliance â€“ deploying the right mix of automation helps financial services institutions build connected, reliable, and efficient processes that delight customers, drive higher margins, reduce risks, and make employees happier.
Â Banking and financial institutions are no strangers to RPA. They were very early adopters of the technology. Unfortunately, many are utilizing early Gen1 solutions that do not serve the company or customers most optimally.Â
Gen1 RPA: Why Traditional RPA Limits Institutions’ Potential
Around 2016, Gen1 RPA hit the market. The original providers of robotic process automation, Gen1 RPA, offers proprietary UI-based solutions that automate repetitive manual tasks faster and more accurately than humans.Â
Â While Gen1 RPA kicked off the industry, it had a plethora of setbacks. Gen1 automations are costly, limited in capabilities, and tend to break frequently â€“ rendering themselves unreliable point solutions. Additionally, their pricing models make it so that institutions are paying too much and using too little. It fosters a buy-not-build approach to bots, resulting in automations that don’t meet their customers’ needs.
Â It’s also difficult to scale Gen1 RPA properly. A recent studyOpens a new window from Forrester suggests that only 52% of enterprises that have launched RPA initiatives have progressed beyond their first ten digital workers. Further, according to TideLiftOpens a new window , only 15% of organizations are extremely confident in their open-source RPA management practices; the majority have concerns about keeping everything up-to-date, secure, and well-maintained.
Gen2 RPA: The New RPA Built for Growth-minded Institutions
Fortunately, there is a better alternative: Gen2 robotic process automation, a better, faster, and more cost-effective automation solution than its predecessors. With Gen2 RPA, institutions can hit their performance goals more effectively, drive efficiency across enterprise departments, and monitor regulatory risks.
Gen2 RPA provides open-source development tools to business users and advanced developers â€“ and a flexible cloud-native orchestration platform to help companies quickly and securely implement and scale sustainable bots across their organization.Â
Â Users can automate any process and technology with no licensing fees and a consumption-based pricing model. This directly aligns automation supply with an organization’s fluctuating resource demands. Gen2 RPA even complements existing Gen1 automations, so there’s no need to replace what’s already working well.
How Gen2 RPA Drives Transformational Outcomes
In its simplest form, Gen2 RPA seamlessly connects disparate systems across a firm’s technology stack and sustainably automates front and back office processes. These systems include but are not limited to marketing platforms, customer relationship management systems (CRM), servicing systems, cloud services, business intelligence (BI) providers, 3rd-party data subscription services, office productivity bundles, enterprise resource planning suites (ERP), homegrown applications, mainframes, and regulatory authority systems.Â
Â Gen2 RPA is also a strategic enabler in an enterprise’s transformation journey. Here are just a few common automation use cases used by financial institutions. In aggregate, these improvements promote agility and resiliency and harden institutions’ competitiveness.Â
- Customer acquisition: Personalized offers, marketing tools integration, multichannel outreach, analysis, and reporting. This improves click-through rates, the number of generated leads, cost per lead, application pull-through rates, conversion rates, cost per sale, and percent of multi-product customers.
- Customer onboarding: Compile customer identity and supporting data to meet credit and KYC / AML requirements. This improves origination cycle times and reduces cost, error rates, and the number of compliance issues.
- Customer support and retention: Chatbots, contact center, self-service, social media monitoring, case management, upsell/cross-sell, and fraud alerts. This improves NPS, first contact resolution rates, and customer interaction costs.
- Default aversion: Default probability monitoring, outbound multichannel communications, counseling, remediation, and write-offs. This improves the percentage of past due accounts, debt to recovery cycle times, and recoveries collected.Â
- Risk and compliance: Risk monitoring, compliance case management, internal audit, and reporting to management and regulatory authorities. This improves the number of issues mitigated and cuts investigation cycle times and the cost per case.
Â Additionally, extraordinary possibilities present themselves for companies that pair Gen2 RPA with machine learning, artificial intelligence, natural language processing, and predictive analytics. For example, companies can put entire core business functions on autopilot using insights gleaned from customer interactions to engage them more meaningfully and uncover new revenue opportunities.Â
The Power of Gen2 RPA to Future-Proof
The next few years will be crucial for financial services organizations to future-proof their business. Banking will continue to be necessary, but banks may not. New financial technology players will continue to capture market share as they reset customer expectations and deliver more meaningful experiences.Â
Â With change comes opportunity, though â€“ and adding Gen2 RPA to your technology mix gives institutions limitless innovation opportunities to help weather competitive storms today and become a leader in the new financial services arena. So the time is now to take a serious look at Gen2 RPA as a way to start future-proofing your business.