No longer just the objects of fascination in science fiction, robots are beginning their invasion of banking. Robots and artificial intelligence in banking have the potential to reduce costs, expand skills, and improve the customer experience working alongside (or replacing) humans.
The exponential growth in the power of technology, digital sensors and information processing has improved the potential of robots at the same time as the innovation and investment in these devices is taking off. Both businesses and consumers can benefit from the rise of the robots. While much focus is placed on making smart people smarter, the leading benefit of robots and artificial intelligence (AI) processes today is to standardize delivery followed by improved domain expertise and skills as subject matter experts, including language capabilities.
The primary opportunity for robots and AI tools in the banking industry at this time is that they can extend the creative problem-solving capabilities and productivity of human beings and deliver superior business results, states Cognizant in a report on the use of this new digital technology. Their research shows that through these technologies, humans have the potential of attaining new levels of process efficiency, such as improved operational cost, speed, accuracy and throughput volume. The opportunity for cost savings is the first place where AI and process automation will impact banking.
In the Cognizant study, 26% of banking respondents stated they have enjoyed 15%-plus cost savings from automation in their front office and customer-facing functions compared with one year ago, and 55% expect those same levels of savings (15% or more savings) within the next three to five years. According to Cognizant, the top drivers for automation beyond cost savings include:
* Reduced error rates (21%)
* Better management of repeatable tasks (21%)
* Improved standardization of process workflow (19%)
* Reduce reliance on multiple systems/screens to complete a process (14%)
* Reducing friction (11%)
Cognizant found that nearly half of the banks surveyed (45%) have also seen at least 10% revenue growth from analytics aligned with their front office and customer-facing functions, a number that is anticipated to rise to nearly three out of every four banks during the next three to five years.
The result is that banking is more inclined than other industry surveyed to automate their processes, often due to their need to better focus on customers. While process automation and the processing insight from transactions can impact all areas of the banking organization, including human resources, finance and accounting, customer service and even new product development, the impact of FTEs is projected to be significant.
In fact, 19% of banks surveyed by Cognizant believe there can be a 25% FTE reduction today, with 28% believing a 25% reduction in FTEs will be possible in the next 3-5 years. When asked about the biggest challenges associated with efforts to digitize processes, executives across industries say that data security is the biggest issue they confront, now and in the future.
Fifty-two percent of respondents to the Cognizant survey indicated that data security is the chief challenge today. It is believed that as digital processes proliferate, and as leaders see the value they create, an entirely new ecosystem of value-added services will develop to ensure the security, risk, privacy and compliance of the value chain of information these processes generate.