Introduction:
The pandemic has accelerated the adoption and scaling of automation across sectors. With the emergence of new technologies organizations are witnessing rapid disruptions across the operational landscape. In this blog, we are going to discuss about one such booming technology which has not only leveraged bots to mimic the user behavior but has also helped companies to automate repetitive and rule-based processes. Therefore delivering a significant ROI within a short span of time.
RPA/IPA Technology
RPA is a technology that can be applied or leveraged for automating specific workflows. RPA is highly effective and digitizes the mundane and recurring tasks (rules-based jobs) that consume excessive working-hours. By leveraging specific data manipulation and technology solutions, RPA performs task level processes without constant human intervention.
The role of RPA:
As RPA is armed with faster go-to-market capabilities, it not only helps the banks with improved customer experiences but also helps in bridging the sudden gap that has arisen due to the pandemic. Research shows that, with the use of RPA in banking functions, the operational costs can be reduced by 75% while delivering the quality and productivity at the same time. Some functions such as data entry, processing of payments, financial analysis and planning, cash management, validation analytics, payment preparation can be directly supported by RPA technology implemented in banking operations.
Intelligent Process Automation (IPA):
Intelligent process automation is a blend of ML and RPA, which assists human work and tends to progress over a period of time without any regulation. The IPA tools are helping banks increase efficiency and decision-making accuracy by effectively transforming both structured and unstructured data into useful information. It also provides other benefits like human-robot orchestration, automation of repetitive and scheduled tasks, thus ensuring sound governance and risk compliance, process visibility across the entire customer journey. According to a Forbes report published in 2019, 85% of the banks have already adopted IPA to accelerate core functions and business operations.
Benefits of RPA/IPA:
Improved Efficiency: RPA/IPA has the potential to significantly reduce human error. It also results in a 20% reduction in the number of helpdesk queries, by shorting the response, leads to improving customer satisfaction. Another obvious advantage is the faster processing speed, as it works approximately 4x faster than a human.
Seamless Usability: RPA is a versatile enterprise automation technology that can be used in conjunction with any existing technology. Platforms for business process management (BPM) and robotic process automation (RPA) are designed for change and agility, making them extremely adaptable. Furthermore, a robust audit trail for all activities performed by robots can be created, making it simple to monitor the process and take corrective action if necessary.
Cost Effectiveness: In a competitive environment, cost-cutting is pivotal to every industry and banks to emphasize on savings. According to various studies, RPA can result in a 67% reduction in the number of full-time equivalent employees required for the process. RPA automation, which can be developed in a matter of weeks, can save about 20-25 percent in terms of required effort.
The Paradigm Shift: With technologies booming in, the BFSI industry is witnessing a paradigm shift as now banks are looking for quick and low-cost alternatives solutions that can deliver short-term and accurate results within a short span of duration. RPA/IPA is playing a major role in this transformation as it enhances customer satisfaction by automating the entire process and opting agility and scalability in their operations. According to McKinsey, automation will transform economies and workforce, and the activities with the highest automation potential are ‘predictable physical activities’ – a large 81% of them.
Source: McKinsey
How should the industry adapt to emerging technologies such as RPA/IPA?
With advancement in technology and use of RPA/IPA for business operations being implemented in most of the segments of the financial sector, the quality of work of humans is definitely improving. Now employees are becoming free from tedious and monotonous jobs (low skill jobs are now handled by RPA Technology) and can utilize their time for more sophisticated jobs and learning, and training in new technologies. Mainly there are 3 different types of jobs/processes as mentioned below:
As of today, the robots are taking care of rules-based jobs and functions such as payroll, data entry, credit card processing and other data processing tasks.
According to McKinsey Global Institute, using emerging technologies, more than 81 % of predictable physical work, 69 % of data processing, and 64 % of data-collection activities could potentially be automated.
According to Gartner, there are expectations of 90% of large organizations adopting some form of RPA by 2022. Gartner also says worldwide RPA Software revenue will reach nearly $2 Billion in 2021. The RPA Market is forecasted to grow at double-digit rates till 2024 in-spite of the economic pressures of the pandemic (COVID-19).
RPA/IPA tools are being implemented in the BFSI sector as it has multiple benefits - such as reduction in operational costs, increased work efficiency and better response speed. With increasing use of RPA/IPA tools there will be a rise in the demand for skilled RPA/IPA professionals and new jobs will definitely be created.
According to Polaris Market Research, due to the increasing demand for RPA, the market is estimated to reach USD 8.7 Billion by 2026.
A few tips to up-skill and thrive in the market .
Conclusion:
Technology has proven its worth. It has been successful in increasing productivity and reducing the load on humans by automating manual and repetitive tasks. Due to rules-based work being done by robots, employees need to take on higher skilled jobs. The workforce needs to invest time to learn new skills to thrive in the industry. At the same time the demand for RPA/RPI professionals is on the rise. It is important to be aligned with technology rather than ignoring or rejecting it, as technology is here to stay. It is equally important to up-skill in order to stay relevant in the industry and not be left out.