Digital Transformation in the Financial Services Enterprise

Digital Transformation in the Financial Services Enterprise

Innovation Driven by Competition
The future success of BSFI firms will directly reflect their willingness to embrace technology. In a world where customers are habituated to real-time interactions, high levels of proactive business and tech innovation, it is only natural to expect the same from banking and financial firms. BFSI firms must recognize this and have a depth and clarity of vision, backed by cognizant investments in software and technology, to set themselves apart from the competitors.  In doing so, they will be future-ready to combat new threats from online-only institutions and global competitor infiltration of domestic markets.

At Opteamix, we have partnered with our BFSI clients to create disruptive and innovative technologies as part of their digital transformation journey. Digital Transformation is no longer just the adoption of social, digital and mobile channels to expand markets, but a complete transformation in the enterprise to improve efficiency, reduce costs and outperform competitors.

Robotic Process Automation and the Digital Transformation Journey
Robotic Process Automation is no longer an experimental technology; it is rapidly becoming an asset that is generating business value in every industry.  Adopters of RPA are benefitting from cost reductions, error-free processes to improved regulatory compliance. Banking, Financial Services and Insurance (BFSI) firms that have been the vanguard of the digital revolution have demonstrated that RPA has led to lower costs, improved processing time and a reduction in reliance on external BPO providers for repetitive lower-skilled work.

At Opteamix, we have been helping our customers achieve digital transformation with RPA in a variety of applications. However, there are common use cases that have been observed that would be beneficial to any firm looking to undertake their first steps toward RPA.

  1. Accounts Payable and Accounts Receivable automation – Bots are configured to capture and interpret information from invoices, recognize patterns and run business processes across multiple applications to execute activities, including data entry and validation of information.
  2. Underwriting Assessment – Business agility is increased by using bots that collect, assemble and present data for easy assessment of data by underwriters. When coupled with the speed in which these reports are generated, underwriters can review cases within an hour of receiving the information -  offering a 40% – 50% reduction in processing time.
  3. End of Month Accounting – The financial monthly close and reporting process encompasses a number of tedious tasks and processes which includes salary accounting, closing out sub-ledgers, importing and exporting data between software and creating and delivering financial filings to regulatory bodies. The process involves many systems, departments, and individuals and requires posting data from sources such as Excel to these sub-ledgers, a tedious undertaking carried out seamlessly by bots.
  4. Credit Report Automation – By digitalizing credit management, banks reduce the risk of losing creditworthy clients to competitors as a result of slow approval processes. In addition, it complies with constantly evolving changes in regulations and governance, saving time and cutting cost by 50%. Our bots generate reports on command and present them to analysts in specified formats.
  5. Audit and Compliance – Gathering and analyzing financial and operational performance is a business-critical function, however, processing and delivering this information is a tedious task and is often prone to delays and worse, errors. Bots are programmed to carry out the task of checking and recalculating balance sheets for any discrepancies. Once completed, reports are generated and emailed to the users.

Future of Automation in BFSI
Initial RPA users focused on trying RPA out on pilot projects – ones that would help reveal value and process without radically altering business processes. Processes such as reconciliation, account opening, and data remediation were readily turned into automated processes as businesses were keen to cut down costs that were being borne by offshoring.

These early adopters of automation, armed with the knowledge of the value that RPA delivers, are now focused on wider deployment of automation through the integration of RPA into their core systems – automating middle and back-office functions such as Risk Management, HR, and Compliance.

At Opteamix, we believe in using our experience to guide companies on the intricacies of digitalization. Our assessment program is designed to help our clients gather information about the unique characteristics of each process, to help drive the decision to automate. This approach aims to identify processes and sub-process activity steps that can be automated.

RPA 101: Choosing the Right Process to Automate

RPA 101: Choosing the Right Process to Automate

Robotic process automation can help address business process complexity, increase efficiencies and dramatically reduce costs. But, to be successful, organizations need full transparency into which business processes can benefit from automation.

Robotic process automation (RPA) is evolving at a rapid pace, promising to deliver significant cost, performance and scalability benefits by automating redundant business processes. As with any new technology, adopting RPA requires investment of time and resources, as well as a commitment to change. Moving forward, the next stage of the journey is to carefully choose which processes are best suited for automation and have the potential to produce the most value.

Perhaps the hardest aspect of RPA is choosing which process to start with.  Perhaps the easiest choice would be to tackle simple processes first. Doing this would mean faster results with minimum initial effort. However, the results will most likely have minimal impact to your company’s operations in terms of solving time or cost constraints. But if you choose to automate a complex process first, which would translate to higher rewards and a bigger ROI, the time and effort to streamline would be much greater. Therefore, choosing the right process is key to implementing RPA. A general rule of thumb to follow is to choose a process that is rule-based and definable. Data-driven processes such as HR Services, Finance and Accounting, IT Services and Supply Chain operations owing to their  repetitive nature makes them the perfect processes to automate.

­­In order to gain a clearer picture of what business activities are ideal for automation, let’s investigate some of the most relevant factors that can help organizations determine if a business process is well-suited for automation and how it will benefit from RPA.

Workforce & volume of work

A survey carried out by Redwood software stated that over 99% of organizations still spend considerable personnel time doing repetitive manual tasks, with almost 74% spending over a quarter of their time doing so. Therefore, activities that are time-consuming; impacted by changes in transactional demand: and, most importantly, highly dependent on employee attention and involvement, prove to be the most suitable processes to be automated. In doing so, employees will now be able to focus on more meaningful and innovative tasks while data driven work is executed faster and error-free.

In addition, when a business is entirely reliant on human employees, work can be done only during workhours. In comparison, RPA can address these high volume tasks efficiently as they are able to work 24/7. RPA software robots are able to tackle activities quickly and accurately even when employees are out of the office.

Definable roles

As mentioned earlier in this post, RPA is best suited for tasks that are rule-based, stable, consistent and data-driven. Tasks that are constantly evolving and non-standardized cannot be undertaken and are not meant to be automated. Another aspect to be considered is the area in which the task takes place – front office or back office. Front office tasks tend to revolve around complex thinking, judgement, and decision-making skills, whereas back office tasks are more repetitive and transactional in nature. Thus, making back office tasks an ideal cause for automation.

Complexity of the process

The complexity of a process refers to number of applications or systems, the frequency of human intervention, or the number of steps required in order to execute the task. Even though RPA is highly capable of traversing both simple and complex processes, it makes sense to test it out on simpler processes initially. This way, businesses will be able to learn the workings of their RPA software. After initial small automation successes are achieved, transitioning to automate higher-level tasks will allow companies to maximize the impact their RPA software can have on streamlining and optimizing operations.

Alternative to outsourcing

RPA allows companies to take control of executing their own transactions internally and develop more robust compliance strategies. Take financial service companies, for instance – their processes are often managed by offshore BPOs. In doing so, they tend to have a lesser degree of oversight and direct control over these processes, not to mention security threats. Switching to RPA ensures a high level of compliance with virtually zero security breaches. RPA software can save their actions into an activity log which can later be monitored and reviewed. This log file can aid in producing detailed analytics, information for auditing and can adapt easily to a change in industry regulations.

Differences in utilization

Even though RPA can be implemented in a number of different scenarios, the technology applied in each varies greatly. Businesses that are new to RPA are bound to have different automation and operational goals than RPA veterans looking to expand the scope and complexity of their already existing automation. Similarly, regional companies who might be using RPA for scaling purposes will implement the technology differently than global enterprises looking to enhance their regulatory compliance.

Once the initial considerations for selecting a RPA process are in place, it is easy to determine which process requires automation. Use the above factors as a baseline to achieve operational improvements and automation success with RPA. You will soon find that RPA forms a critical part in your enterprise planning. Implement it correctly, and RPA may be the single most important investment you make this year, or this decade.