Automating the Financial Services Industry: Opportunities Abound, and APAC Firms Are Leading the Way

Automating the Financial Services Industry

Automating the Financial Services Industry: Opportunities Abound, and APAC Firms Are Leading the Way


Across major industries, robotic process automation, or RPA, is being used as part of an organisation’s digital transformation strategy to automate burdensome, high-volume and time-consuming business processes. Best suited for rule-based transactional and repetitive tasks involving structured and/or semi-structured data, logic-driven robots, or “bots,” are used to capture and interpret information from existing user interfaces to process data, communicate with other systems, and execute tasks without affecting the organisation’s existing IT infrastructure.


For the financial services industry, the need to enhance the customer experience, achieve greater operating efficiencies to remain competitive, and comply with more stringent regulatory and compliance requirements have been key drivers of the increased interest in digital transformation in recent years. In Singapore, and the Asia-Pacific (APAC) region as a whole, leading local and international financial institutions have been quick adopters of RPA initiatives and have seen early success with the technology. A study by IDC of 10 financial services companies in Asia (including ANZ Bank, DBS Bank, OCBC Bank, UOB and Prudential Life Assurance) revealed that these organisations have realised cost savings and improved turnaround time.[1]

With regulators across APAC encouraging innovation, including the use of regulatory sandboxes for piloting emerging technology, the trend toward digital transformation is expected to continue. Research firms predict that revenue from banking RPA software and services will grow more than four-fold, from an estimated US$214 million in 2018 to almost US$900 million by 2022,[2] and that 40 percent of banking and insurance companies in the APAC region will be using RPA by 2020.[3] Globally, the RPA market is expected to grow to nearly US$6.9 billion by 2025 at a compounded annual growth rate of 55.5 percent between 2018 and 2025.[4]

Why Automate?

In addition to delivering faster processing speeds and reducing incidences of human error, automated processes produce a complete audit trail aligned with compliance, enhanced data-processing accuracy, cost savings and an increase in employee productivity. Another significant benefit is the ability to monitor and test a larger amount of data than traditionally possible, i.e., the entire population as opposed to a sample.

Benefits of RPA

Common Applications of RPA

Below are some of the more common functions suitable for automation within different business areas of financial services institutions.[5]

Implementing RPA in Financial Institutions

The best way to begin an RPA programme is to select a process that is manually intensive, structured, repetitive, requires minimal judgment, involves fewer systems and is located in a single geography end-to-end. The selected processes should be ranked in descending order of priority, based on the benefits and returns on investment that are expected to be gained by the business, and not just because they can be automated.

There are three main phases of implementation, illustrated below.


RPA SOFTWARE SELECTION

Selecting RPA software is part of the implementation process. Selection should take into account the objectives of the RPA strategy (e.g., effort saved, accuracy improved) and whether the software can accomplish these goals. It is also important to understand and compare features in the different software options to determine suitability for the selected process (e.g., the software’s ability to read documents of different formats and cater to variability of a process, such as invoices received in multiple layouts). Another consideration is the ability of the software to deliver on strategy objectives in the long term, such as the ability to scale up quickly to meet the demands of the business, as well as capabilities involving cognitive technology and AI.


Measuring Success

To assess the effectiveness of the RPA implementation, qualitative and quantitative measurements (key performance indicators, or KPIs) should be established by the implementation team and agreed upon by senior management. KPIs can include the length of time between submission and output, output accuracy, and number of cases closed within a predetermined time frame when compared to a human full-time employee. Processes that are switched to RPA should be measured against these KPIs to gauge success and reveal any shortcomings of the automation. Finally, as with any change programme, the essential elements for success include effective and robust project management, contingency planning, risk and change management, and communication.

How Protiviti Can Help

Most business leaders would agree that digital transformations, which often include an RPA component, are important in helping organisations stay ahead of competitors and keep pace with ever-growing customer demands. Like any transformation, it is important to view RPA as an evolving and expanding process that is integrated with the long-term goals and growth strategy of the business, not as a one-time event serving a single, limited purpose.

Protiviti helps organisations implement effective RPA programmes that meet their long-term strategic goals. Our services include:


[1]Robotic Process Automation: Ten Early Adopters in Asia Pacific Realize Hefty Cost Savings, According to Study, CFO Innovation, April 18, 2018. 
[2]Robotic Process Automation in Banking to Generate $900M Revenues [press release], Juniper Research, February 6, 2018.
[3]Robotic Process Automation in Asia/Pacific Financial Services: Key Learnings from 10 Early Adopters, by Michael Araneta and Sneha Kapoor, IDC, February 2018.
[4]Robotic Process Automation Market to 2025 - Global Analysis and Forecasts, The Insight Partners, June 2018.
[5]For examples of how internal audit departments in other industries are using digital technologies, including RPA, see Protiviti’s publication Internal Auditing Around the World, Volume XIV.

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Ewen Ferguson
Ewen Ferguson
Managing Director
+61.478.491.056
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Ghislaine Entwisle
Ghislaine Entwisle
Director
+61.431.285.494
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