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IS IT TIME FOR FINANCIAL SERVICES TO EMBRACE ROBOTS?

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IS IT TIME FOR FINANCIAL SERVICES TO EMBRACE ROBOTS?

By Iya Datikashvili, Director, Brickendon

The UK is becoming an automated economy, and we believe 2018 will be the year that automation becomes the norm across the financial services sector. Technologies such as artificial intelligence (AI) and robotics are growing up and now performing tasks that were once carried out by teams of individuals, saving companies time and money, and increasing their competitive edge.  One such technology is Robotic Process Automation (RPA), a software robot or ‘bot’ that mimics human activity by carrying out routine processes. Many people believe that RPA has the potential to unlock significant value within a company by performing a range of complex, time-consuming and repetitive functions, thus freeing up employees to focus on value-added work and ultimately, overhauling archaic systems and transforming the way the financial services sector operates.

The key is to embrace these developments now. Financial institutions, including banks that fail to engage and incorporating technological advancements, such as RPA, risk falling behind.

With overwhelming amounts of information on the subject and conflicting opinions saturating the market, now is the time to comprehensively assess whether RPA can improve the financial services sector.

What is RPA?

Defined by the Institute for Robotic Process Automation & Artificial Intelligence (IRPAA) as the application of technology that allows employees to configure computer software or a robot to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems, the advantages of incorporating RPA into your business processes are many. In a bank, RPA has the potential to reduce the number of operational errors; increase efficiency as robots can operate 24*7; reduce costs as all the people involved in the manual processes can be replaced by a single programmed bot; add scalability, as the number of bots can be increased or decreased based on operational volume needs; increase customer satisfaction due to a faster turnaround; and improve accountability as the audit logs of robot operations would be constantly available.

Implications for the future

Does this really mean that in the future all humans will be replaced by machines and that robots will eventually try to take over the world in the style of the Terminator movies?

In reality, the answer is no. The intention behind RPA implementation is to ensure organisations are able to better utilise their employees in areas that add value to a firm’s operations and delegate the repetitive tasks to automated machines. The ‘bots’ need to be programmed to replicate the human actions required in the process, while humans are also required to provide support and supervision to ensure any issues which may impact the process, such as network failure, a ‘bot’ crash due to error, or exceptions in the operations, can be dealt with.

Is RPA for you?

Not all business operations would qualify to be automated using RPA. Firms will need to assess their operations to establish selection criteria for processes which can be automated. Some questions to consider are: does the input have a defined structure; is it a standardised process; is the re-work rate high due to a large amount of manual/human error; does the process have to be replicated in multiple geographical locations and require support teams; is 24*7 support required?

The tools which enable RPA are proprietary and licensed, meaning the process of adoption can be costly. As a result, organisations need to assess their business-as-usual (BAU) processes for the suitability of RPA application and then develop a strategy to determine how to introduce RPA for the candidates identified, as well as performing a Return on investment (ROI) assessment and ensuring the most appropriate tools are selected.

Ultimately, firms should only adopt RPA if it provides substantial benefits in the longer term, but given the aforementioned advantages that can be reaped, there is no doubt that for the right projects, the ROI will outweigh the initial costs and investments.

One thing to note is that thus far, the bots used for RPA can only demonstrate intelligence based on what they are programmed for. However, constantly evolving technology has introduced innovations like Artificial Intelligence (AI) which can empower the bots to adapt to issues and behave accordingly within business processes, i.e. enact remediation actions. So, while there may currently be limitations, the opportunities for future developments are vast.

Functions of businesses such as procurement, supply-chain management, accounting, customer service, HR, purchase-order issuing, and generally any other process area where tasks are manual, repetitive, standardised, and rule-based and involve structured data, could also benefit. In IT, RPA can be embedded within support and management operations like network monitoring, service-desk operations, and automated customer assistance. Typically, these operations are essential to keep organisations operating effectively, though they are often overlooked when it comes to funding because they do not necessarily generate revenue.

So what’s next?

The key is to assess your options. There is no doubt that as RPA becomes an increasingly popular buzzword, its benefits merit further consideration. After all, automating even just a few of the vast number of processes necessary to make a bank function would enable organisations to improve their operational efficiencies and reduce costs – and in the end, cost and efficiency are what matters most to businesses.

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Sunak to use budget to expand apprenticeships in England

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Sunak to use budget to expand apprenticeships in England 1

LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.

Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.

The scheme will extended by six months until the end of September, the finance ministry said.

Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.

Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.

Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.

“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.

(Reporting by Andy Bruce, editing by David Milliken)

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UK seeks G7 consensus on digital competition after Facebook blackout

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UK seeks G7 consensus on digital competition after Facebook blackout 2

LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.

Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.

“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.

“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”

Dowden said recent events had strengthened his view that digital markets did not currently function properly.

He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.

“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.

Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.

“Nick strongly agreed with the Secretary of State’s (Dowden’s) assertion that the government’s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.

Britain will host a meeting of G7 leaders in June.

It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.

The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.

Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.

(Reporting by William James; Editing by Gareth Jones and John Stonestreet)

 

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Britain to offer fast-track visas to bolster fintechs after Brexit

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Britain to offer fast-track visas to bolster fintechs after Brexit 3

By Huw Jones

LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.

Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.

“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.

Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.

Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.

The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.

“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.

Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.

The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.

It also recommends more flexible listing rules for fintechs to catch up with New York.

“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.

“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”

SCALING UP

Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.

“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.

A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.

“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.

The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).

“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.

($1 = 0.7064 pounds)

(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)

 

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