RPA in Action: Innovative Ways Five Financial Services Companies Are Using Automation

RPA in Action: Innovative Ways Five Financial Services Companies Are Using Automation

While automation promises cost savings and efficiency gains, it isn’t always easy to realize those benefits. For companies in the financial services sector, all the stated advantages of robotic process automation (RPA) seem to be right there for the taking — but theory doesn’t necessarily equate to reality.

A report from PricewaterhouseCoopers (PwC) highlights the issue at hand. “Many financial institutions don’t see the results they expect,” wrote the authors of Improving ROI from Digital labor in Financial Services. “Without knowing their true pain points or support requirements, companies will miss out on ways to scale the benefits, and they’ll leave money on the table.”

Fortunately, some companies in the financial industry are showing that this doesn’t have to be the case. The insurance industry, on everything from claims processing to policy issuance, has also found a host of applications for RPA. And banks are finding success with everything from chatbots, roboadvisors, and accounts receivable automation.

And, really, the industry is just getting started. To illustrate just how wide the use cases can be, we are taking a look at how the following banks, insurance companies, and others in the financial services industry have begun applying automation to their own operations. Any company hoping to achieve RPA success would be wise to learn the lessons from their digital journey.

Zurich’s Award-Winning RPA Implementation

Global insurer Zurich, along with its RPA provider partner Capgemini, won the “Paragon Award” for collaboration this summer. Handed out by the Information Services Group (ISG), the honor aims to recognize organizations in Europe that have made “innovative contributions to the continuing evolution of the outsourcing industry.”

Among the biggest benefits the Swiss carrier has seen is the ability to free up its commercial underwriters to devote their time to more complex policies while boilerplate policies get handled by smart software. The company says that its local policy issuance processes, for example, have been automated by RPA.

This technology was developed by Paris-based Capgemini in a partnership that dates back some two years and included process selection, optimization, robot maintenance, and — critically — ongoing improvement. The initial rollout covered the complexities of issuing policies in five separate countries, highlighting the versatility of the automated delivery.

While the benefits are paying off now, it wasn’t always a given that the everything would work out so well. “There were many times we looked at each other and thought ‘will this really work?’ said Helene Westerlind, Zurich’s head of international programs. But through “determination, passion, and patience” the work of the two companies “proves that hard work and collaboration pays off,” she said.

Earlier in its RPA journey, Zurich also partnered with big four auditor and professional services Ernst & Young under a center of excellence model. Right out of gate, their efforts began showing unmistakable results that were enough to inspire the carrier to dive in even further.

It’s easy to see why. In a pilot program within its life insurance and pensions division in the United Kingdom, it was realizing 50% cost reductions in various processes. Less than two months later, the company was hooked and started expanding the rollout.

Kryon Systems Shortens Claims Payment Process from Days to Hours

It is no accident that insurers like Zurich are finding immediate uses for automation. Francine Haliva, senior vice president at Kryon Systems, a Tel Aviv-based provider of RPA solutions, says that insurers are among those that can benefit the most from this emerging technology.

For contractual reasons, she was unable to identify the client by name, but her company has been helping to bring the benefits of RPA to a large global player with operations across the world and business in virtually all lines of coverage.

Claims is one of the areas ripe for RPA help and the one that showed the most obvious, tangible results for this carrier. To make its claims payments, the global insurer needs to go through 26 different bank websites and use “smart searches” to verify that payments are being made against claims. And it has to make these verifications on four different dates each month.

This was taking workers four days to complete every month. “Once they automated the process with the RPA platform, this process is being done in under two hours automatically by the robots,” Haliva told Finance TnT.

And the improvement wasn’t just in terms of time. Before the changeover, employees would make many mistakes. At times, the searches were done incorrectly, the information wasn’t collected, or a customer claim was missed. But that changed once the robots took over.

“Not only did they improve the efficiency of it — they saved thousands of full-time-employee hours per year — but they eliminated the human error,” said Haliva.

Automating Accounts Receivable at KeyBank

While insurers have some low-hanging fruit in the automation world, more and more banks are also jumping into the waters. Several Canadian banks, for example, have been eagerly adopting RPA-centric technology with success.

Royal Bank of Canada (RBC), the largest financial institution in the country, has been using smart chatbots for more than a year to improve customer service, while Scotiabank is incorporating the innovation into its larger digital transformation.

In the United States, Cleveland-based KeyBank is also looking for efficiency gains, and it recently partnered with Billtrust to automate invoice delivery and accounts receivable services.

Through electronic invoicing on a cloud-based platform, building on Billtrust’s Quantum Payment Cycle Management, the bank can now incorporate RPA principles into its KeyTotal AR to offer an “end-to-end solution to optimize” accounts receivable, according to KeyBank.

Specifically, the RPA technology at play eliminates the need for employees to carry out “repetitive manual tasks.” And with its machine-learning capabilities, the entire process will continue to expand and improve over time. That part is critical, for KeyBank and many others looking to the future: the cognitive benefits implemented at the outset will only get better over time.

According to KeyBank, it is now the first commercial bank in the United States to collaborate with Billtrust and bring this type of automation to the market.

“Banks have traditionally focused on payment execution,”said Matt Miller, head of KeyBank product and innovation for enterprise commercial payments. “We think that’s important. But in consulting with our clients, we hear a lot of pain upstream and downstream of payment processing. Partnering with innovators like Billtrust enables us to optimize clients’ processes from beginning to end.”

Bancolombia Brings Bots to the Investment Portfolio

Europe and North America aren’t the only ones implementing bots and automation. Medellín-based Bancolombia, the largest bank in Colombia, introduced its new “Invesbot” product in June to help clients better manage their investment portfolios.

Though not solely intended for rich investors, Invesbot is a higher-end play that is reserved for a certain segment of clients who have at least around $7,000 USD invested. For users, it provides real-time intelligence about portfolio performance and can offer advice about whether current market conditions suggest any changes should be made.

The launch was made possible by building a robot that can talk to, and receive feedback from, the larger Bancolombia network. It also has the ability to interface in real time with the Bolsa de Valores, Colombia’s stock exchange.

One crucial element for the bank is the potential this has to expand its client base for consulting. While the pool of Colombians who seek out professional advisory services remains limited, this “roboadviser — the first of its kind from a company in the country — will allow more people to experiment and learn how to invest in the stock market. And more people looking for financial advice, whether in digital or face-to-face terms, can only spell good news for a company like Bancolombia.

“The idea is that the client does not have a higher cost for advisory services,” said Juan Felipe Giraldo, president of Valores Bancolombia. He added that, “we see this more as a highway for growth more than something that allows us to cut back on financial advisors.”

As with Zurich, such innovation is paying off in accolades for Bancolombia. Last month, the financial institution was given the “Digital Transformation Award,” in the best large company in Colombia category, by big four auditor PricewaterhouseCooper and CINTEL, a Bogotá based ITC association.

Earlier this summer, the financial institution was also the only Latin American bank to receive a “Digital Bank of Distinction Award” from Global Finance magazine. “This recognition challenges us to continue offering superior experiences that will give added value to our digital customers,” said Cristina Arrastía, corporate vice president at Bancolombia.

Guardian Group Sees Early Returns on Its RPA Journey

Further proving that innovation knows no borders, others in the region are also getting on the automation bandwagon. Leading Caribbean insurer Guardian Group has also embraced RPA and its journey offers a look at how adoption can help financial services companies overcome the burden of their legacy systems.

Guardian Group has partnered with Sutherland Global Services on a larger digital transformation effort that has positioned automation as a large element of the strategy. The initiative has led to the development of RPA software that, according to a case study account from Sutherland, can “access, calculate, copy, paste, or use embedded business rules to interpret, use, and enter data into the core enterprise application.” In short, the robots do the grunt work and can work between systems new and old to do just about all the data processing duty.

Ravi Tewari, group chief executive officer of Guardian Holdings Limited, told Finance TnT that automation is also helping the company’s legacy systems speak to each other in a way that doesn’t require sophisticated interfaces.

“It is consolidating as well as modernizing our infrastructure at the same time,” said Tewari, “while allowing us to start to resemble what a best-of-breed insurance company should look like to the customer — and should behave like financially for the shareholder.”

The legacy systems are no longer a weight around the neck of any advancement efforts for the company — and this is just the start for Guardian Group. “We are going to deploy automation in every single aspect of our business,” said Tewari earlier this year. The chief executive added that, “in two years’ time, we expect this to look like a completely different company.”

Ending Resistance: RPA as the Wave of the Future

A hurdle still facing companies — in the financial services world and beyond — is one of perception. While the efficiency gains, improved accuracy, and speed of processing are advantages that all companies want, the public at large sees headlines about automation as a threat.

But, almost across the board, the financial services companies embracing RPA agree: As much as anything, automation is freeing up still-employed workers to do higher-level work.

“The underlying philosophy is that we will let humans do the meaningful stuff — like customer interaction and the judgmental tasks — and, in effect, let automation and software robots do the repetitive work,” said Tewari.

From the provider end, Harel Tayeb, CEO of Kryon Systems, is seeing the same thing. “We should focus on what we are doing best while the robot is taking care of anything else,” Tayeb told Finance TnT.

He says that helping companies free their employees from the constraints of low-level, mind-numbing work to focus on higher-level taks is his firm’s core vision.

“Today, people are doing those processes and there are so many mistake, it takes so much time,” said Tayeb. “From my perspective, I say let the robots do those processes for you — let them verify, let them work 24/7, do anything for your needs … while your employee will do something much more important for the company: invent things, communicate, and focus their time on our core capabilities as a human being.”

Tayeb’s view is supported by a recent survey of chief financial officers in Australia. Nearly half (46%) of the 160 CFOs surveyed said they plan to expand their workforce in order to implement automation initiatives, and an overwhelming 86% say that workplace automation will lead to a change in the skills required by workers — but not elimination jobs entirely.

“Increased automation within Australian workplaces is not about destroying jobs, but rather, adapting to change — which in turn leads to new opportunities,” said David Jones, senior managing director at Robert Half Asia Pacific, in a statement.

From the perspective of Jones and Tayeb, the coming RPA revolution will not be the job killer that some fear. On the contrary, it will just push human workers into doing what they do best — problem solving — while the robots handle the mundane.

“While automation may diminish some routine manual roles, it will lead to faster decision-making, reduce the risk of errors, and eliminate stresses associated with laborious task-management responsibilities,” said Jones. “These benefits are available to those companies who embrace workplace automation rather than resist it.”

 

Photo credit: Richard Greenhill and Hugo Elias of the Shadow Robot Company

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