Automation is a hot topic among banks and financial institutions today. Faced with agile competitors snapping at their heels and a rising trajectory to their cost-to-income ratios, Financial Services institutions are looking at automation to improve their productivity and efficiency. These organizations are showing particular interest in robotic process automation (RPA) and rightly so, as RPA can be scaled effectively within a short period of time and provide rapid return on investment.
What is automation and how does RPA fit in?
Automation and using technology to automate processes has been around for the last 70-odd years, with varying degrees of impact. Starting with hot keys and macros (remember mainframe programming and early Windows programming?), automation evolved through the 1990s with the emergence of messaging (MQ series), BPM (business process management) software and shared services (co-located or otherwise). Operations managers soon started promising the business 15-20 percent reduction in costs and efficiencies associated with straight through processing and shared-services model.
The Financial Services industry was the torch bearer and soon adopted these technologies and adapted their operations to shared services. However, one of the biggest challenges was legacy systems and the huge amount of time it took to make these new technologies (BPM, shared services) work with the decades-old legacy systems that were pervasive in Financial Services. This had a definite impact on time-to-market as well as the cost-to-time-to-market. In many cases, the cost associated with automation was a fraction of the cost associated with changing the legacy systems to ensure that automation software could work. In the late 2000s, a new adaptation of old technology came in to provide a balance between legacy systems and automation. This is the genre of software known as robotic process automation (RPA).
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