Invasion of Robots and AI into Banking Industry

Robots are no longer just an object of fascination in sci-fi movies. Their invasion in the banking sector is now eminent. Robots and AI in the banking sector have the potential to expand skills, reduce costs, and improve the customer experience working alongside (or completely replacing) humans.

Robots have now taken over the financial services industry, and believe me the statement is not just an arbitrary one. Have a look around, from robo-advisors in capital management to simulated tellers and even the ubiquitous ATM; Robots could very well be the future of banking.

From Rosie the Maid, a popular humanoid robot cartoon character from the 1960’s TV series The Jetsons, to Isaac Asimov’s ‘I, Robot’ and Fritz Lang’s Metropolis and even WALL-E, C-3PO, R2-D2 and Optimus Prime, robots have always fascinated and amused consumers. But, in real life, they have been far less entertaining (or particularly functional).

Sure, the mechanical muscles have become a part of every factory room floor in the manufacturing sector and have taken on dangerous and difficult tasks, but until lately, robots had not proven themselves to be nearly as intelligently evolved (or financially viable) as they are usually projected.

This scenario is all changing unremittingly. The gradual growth in the power of digital sensors, technology and information processing has enhanced the potential of robots at the same time as the investment and innovation in these devices are progressing. Both consumers and businesses can benefit from the rise of the robots.

Though much focus is placed on making smart people even smarter, the principal benefit of robots and Artificial Intelligence (AI) developments today is to standardize the delivery followed by an improved domain expertise and talents as subject matter experts, including the language capabilities.

Intervention of Robots and AI in Banking

Robots and AI are starting to extend the processes and problem solving in the global banking industry. The decision support and automation capabilities will eventually have inferences to headcount, advisory services, customer service, and traditionally labor intensive or error-prone procedures.

The most important use of Robots and AI tools in the banking business is that they can enhance the productivity and creative problem-solving capabilities of human beings and help them deliver superior business results. A research shows that through these technologies, humans have the potential of attaining new levels of process efficiency, such as improved accuracy, speed, operational cost and throughput capacity.

The opportunity for cost savings is the first and foremost stand where AI and process automation will impact the banking industry. According to a study carried out by Cognizant, 26% of banking respondents specified that they have enjoyed 15%-plus surged savings from automation in their front office and customer-facing functions in a span of one year, and 55% expect those similar figures of savings (15% or more savings) within the next three to five years.

Also the top drivers for automation beyond cost savings include: Reduced error rates, Reduced reliance on multiple systems/screens to complete a process, Better management of repeatable tasks, Reducing friction and an improved standardization of process workflow. All the statistics grounds to a point that banking industry is more inclined than other industries to automate their processes due to their need to focus better on customers.

While process automation and the processing insight from transactions can impact all areas of the banking organization, including finance and accounting, human resources, customer service and also new product development, the impact of FTEs is projected to be significant.

So the question arises: Which jobs may be at risk due to this robotic revolution? A study released by Oxford Martin School’s Programme on the Impacts of Future Technology appraised how jobs are susceptible to digitization. In its evaluation of over 700 jobs, and after classifying them based on how likely they are to be computerized, the financial services industry jobs that fit the studies criteria include: Bank Teller, Mortgage Broker, Loan Officer, Insurance Underwriters, Insurance Claims and Policy Processing Clerk, Claims Adjusters, Bookkeeping, Accounting and Auditing Clerks, Examiners and Investigators and also Tax Preparers.

According to executives across industries, the biggest issue they confront is that of data security. It is believed that as digital processes flourish, and as leaders witness the value they create, an entirely new ecosystem of value-added services will develop to ensure the security, privacy, risk, and compliance of the value chain of information these processes create.

Effectiveness of Automation to What Extent?

Consumers are now welcoming the use of robot-advisors instead of in-person advisors for conducting complex tasks, such as managing their investments. They prefer autonomy.

The expediency of “anytime, anywhere” banking for customers has fortified the need for self-service offerings. ATMs, self-service kiosks, IVRs, and online and mobile banking apps have played a chief role in promoting this self-service culture. Along with the advancements in these technologies, businesses need to ensure that they are frequently assessing how robotics technology could be leveraged to augment their offerings and improve customer experiences.

Robotics can benefit banks to automate monotonous and repetitive processes ― currently performed by back office teams, mostly outsourced― that don’t essentially need a physical human intervention. It can also allow banks to complete these tasks sooner and without any human error. This will lead to a better orientation of customers who do require more complex issues to be resolved successfully with manual intervention. This saves time for the customer as well as the customer service agent and is all completed at a fraction of the cost that would be required to upgrade legacy systems and tightly integrate them with the new digital interfaces.

Low cost process automation technologies can form the adhesive between the digital front-end and the legacy systems, empowering a more seamless and digitized customer experience. Implementation timeframes can be planned in weeks, not years, and robots can be quickly scaled up or down in response to the fluctuating demand.

 Gear Up for the Robot Revolution

Unequivocally, the prominences of robotics, AI and a digitized banking landscape have many people worried about the influences these trends make on banking. Moreover, the trends do back up some concerns, too. Many bank branches small and large are closing their doors, instead of opting for online and mobile banking and embracing technological advancement.

A study emphasizes that, since the best consumer branch experience is totally based on a deep understanding of the customer, their situation along with a good degree of empathy, artificial intelligence could certainly help in complementing current, somewhat misguided and frustrating branch experiences.

There could be a wide range of applications of robots and AI in the branching system. Maximum numbers of banks have used humans as robots in their branches for years, (asking tellers to process transactions precisely the first time, each time). These are the functions we’ve been replacing for ages. After all, an ATM is an ‘Automated Teller Machine’ which means it’s a robotic teller.

We should now consider the fact that how we can make digital functions useful to augment human processes. As an alternative to the current ‘product push’ using a flag system that offers the teller (or ATM) with a standard cross-sell message, systems must detect intelligently that the customer had looked at an explicit bank service on their mobile device recently and alert the rational customer service concierge – a role that has absolutely nothing to do with telling and transactions – permitting a personalized greeting.

Robotic process automation with urbane technologies is here to stay. Human interaction will remain indispensable to keep pace with how knowledge work is composed and managed, but still, technologies are now able to create more effective knowledge workers while concurrently generating and capturing data that can advance processes and eradicate wasteful steps.

A Win-Win Prototypical Deal

The benefits brought by automation and robotics go far beyond just helping banks to save costs. Robotics will eliminate errors, reduce human dependence, and speed up processing times, leading to better reliability, accuracy and improved customer experience.

While there are certain things that robots can’t do, there is a clear opportunity for banks to use emerging technologies to drive more effective, personal, and cost-efficient customer service. By allocating repetitive and low-value tasks to robots, banks can then allocate more important activities and roles to their staff, and assist the organization to focus on innovation, growth and ways to optimize the use of emerging new technologies.

If organizations could focus more on migrating manual transactional activities to the self-service networks supported by robotics process automation, only then they will stand a chance to attain cost-efficiency and improved customer allegiance. The use of robotics and automation technologies will help banks to transform into a new digital operating model, and stay competitive against emerging digital competitors and all those new Fintech services.

So start today, visualize how the future of work will look when digital machines, information and processes help humans do their jobs faster, better and with greater impact. By such automation in systems and interpretation of data and an insight for a better digital era, robots have the potential to work shoulder-to-shoulder with humans, allowing them to serve clienteles more effectively.

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