Rise of the Machines: How Robotic Process Automation Is Changing Outsourcing and Financial Services

Rise of the Machines: How Robotic Process Automation Is Changing Outsourcing and Financial Services

Automation has already changed the world. The manufacturing sector overhauls have been the most visible for the business sector, but many other areas are being shaped by innovation.

Today, the robots and “smart machines” are not just lifting heavy machinery and conducting mundane, repeatable tasks. Technologies with intelligence — led by the world-famous Watson from IBM — are showing the world that the future of automation includes thinking. If computer programs can win at Jeopardy! and chess, what is next?

In the United States, especially during an election cycle, the focus has naturally turned to the loss of jobs. Anything that sounds like a potential job killer is seen as the enemy. But as automation continues to revolutionize finance, customer service, and the offshore services world, more people are coming to believe that the future won’t necessarily be worse for employment — it will simply be different.

Here and elsewhere, the new advancements are coming. Some are here already. There is a new world of jobs being created by the Internet of Things,, for example. And the world’s leading companies are preparing for this new reality now rather than bemoaning the loss of the past.

The Robotic Process Automation Revolution

Stamford, Connecticut-based research and advisory firm Gartner made waves earlier this year when it asked “Could Your Next Boss Be a Robot?” While the commentary was forward-looking, its message should be heeded now.

“It’s still early innings,” Frances Karamouzis, vice president and distinguished analyst at Gartner, told Finance TnT. “However, we’re in a situation where, maybe two or three years ago, people thought that this was a future fantasy. And the reality is that tons of tons of commercial products — and services for that matter — are available.”


Melissa O’Brien, research director for contact centers, omnichannel operations, and BPO at HfS Research

Karamouzis says that only about 20% of the enterprises she talks with have mainstream adoption of what can be called robotic process automation (RPA). But about 70% have dabbled or experimented with proof-of-concept technologies towards this goal.

“The biggest hurdle is people looking at a technology and trying to re-imagine or re-calibrate how this would be incorporated into their business process or their IT process,” she said.

More and more companies are figuring that out everyday. So the adoption rates and ability to turn machine learning and artificial intelligence will only continue to shake up the outsourcing world in the years — and even months — to come.

One inevitable outcome is that services being provided today from India or the Caribbean are going to become cheaper due to technology no matter the location. The question will be whether the current and emerging outsourcing locations are nimble enough to react and start proving their worth not on price alone but also on quality.

“For a long time, the whole premise of offshore is that it was cheaper,” said Karamouzis. “Now people — for the first time in the last 25 years — they’re saying my primary motivation is not buying because something is cheaper. My primary motivation is buying because something is better.”

Advancing Operations Alongside Automation

On the other hand, we are not there yet. Moreover, tech advancements are nothing new in the outsourcing world. Melissa O’Brien of HfS Research notes that today’s changes, while substantial, center around taking previous iterations of automation and making them more intelligent.

The industry is now experimenting in the realm of virtual assistants that can communicate with customers, according to O’Brien, the company’s research director for contact centers, omnichannel operations, and BPO.

“Simple automation has been around forever in the contact center, especially for back-end tasks and basic customer routing and interactions with IVRs and the like,” O’Brien told Finance TnT. “Now what we’re seeing is a greater desire to make that automation more intelligent and be able to learn from interactions and better augment the agent-level talent.”

The best of these technologies are generally not replacing the agent. They are enhancing the work of humans. RPA will completely take over some of the lower-level tasks — like IVRs did in terms of having a caller key in their phone number or say their name. But at their best, they improve customer experience by using pattern recognition that can understand — and learn — when the current issue is similar to something the agent resolved successfully in the past.

However, firms in the so-called nearshore provider locations, namely Latin America in the Caribbean, do need to invest more in the actual tech. According to Alicia Covaleda, principal at A.T. Kearney, this is one thing that still has not been on the radar as much as it should be.

The Indian giants — Tata Consultancy Services, Infosys, and Wipro — are leading the way. They have seen the writing on the wall for years and invested heavily in creating what will be the infrastructure of the future. Companies all over the world that hope to compete need to keep up.

“Adoption in Latin American countries is very low,” Covaleda told Finance TnT. “Some call centers use tools like Pegasystems/Openspan — robotic desktop automation — to increase the productivity of agents. Some others might use robotic process automation for repetitive tasks, like virtual agents – especially in back office operations.”

Financial Services and RPA

The banking industry has been dipping its toes into the automation arena for awhile now, albeit conservatively. But although financial services firms aren’t intrepidly creating the new market for RPA, there are several areas where it is being implemented already.

A Gartner report this year, “Where Banks Can Use Smart Machines,” listed security-related processes, virtual assistants, “smart” advisors, and natural-language processing as some of the expected uses in the industry. It cites the example of Diebold, a U.S. institution that tested an interactive teller “avatar” on a full-size video screen in 2014.

robotic process automation

Frances Karamouzis, vice president and distinguished analyst at Gartner.

As is often the case, regulatory issues — real or perceived — are limiting the evolution to some degree. “There are behavioral bounds placed on media that provide financial advice,” states the report. “We do not know how the emergence of virtual personal financial assistants impact or are impacted by those regulatory behavioral boundaries.”

Regardless, the industry is looking for better service and better efficiency. And there is no shortage of applications for RPA in banking. “It’s everything from devices for actually counting money to things like the ‘Know Your Customer’ process,” said Karamouzis.

She has spoken to one bank where some 20,000 employees are involved to some degree in that KYC process. Using automation to limit that number — instead having robots verify information and create the audit trail you need — is low-hanging fruit. It’s just a matter of time before the right technology is created to simplify this type of work. Firms related to the sector would be wise to start exploring the potential now.

Training to Blend Technology and the Human Touch

Even if robo-bosses and other automation becomes more pronounced, Karamouzis agrees that there will always be need for humans in the customer service realm. “There are pieces of it that you can automate and things that you will never be able to automate,” she said.

Our best science still cannot understand fundamental aspects of the human brain. So there is no current way to mimic its complexity with a machine. “You can never replicate certain decision making,” said Karamouzis.

Companies and locations that want to remain competitive will thus need to adjust to a working environment that is a hybrid of the best technology and the best employees. And rather than solely thinking about an offshore service provider as offering a cheap-labor advantage, there must be a push towards better training, better education, better quality, and better value adds.

The most innovative tech is useless in the hands of humans who cannot use it. So this bodes well for any location that has a highly educated labor force.

In time, the population-scale advantages of a place like India will decrease when Caribbean island nations can provide just as many well-trained, top-caliber personnel. The robots will handle the tasks that don’t require human decision making, but the complexity is still in the hands of the key agents.

“The most critical element traditional contact centers need to focus on is having the right talent to balance out digital interactions and automated processes,” said O’Brien. “A lot of this is about investing in training and retention, re-assessing talent profiles, and analyzing employee performance and satisfaction.”

This training will, for some providers, require looking into new areas. Better service will require knowing the customer better and understanding their preferences. This means acquiring data — and a lot of it. So agents will need to have more focused education on information management as well as interpersonal skills like empathy and problem resolution. “Automating easy tasks makes the average agent-assisted interaction more complex, so there’s an element of capability and empathy training that needs to be addressed,” said O’Brien.

One great example of where the human touch remains critical in in social media customer support. Nothing proved this quite like the high-profile disaster of Microsoft’s Twitter chat bot Tay, which starting spewing racist responses it “learned” from other users.

“Social customer support, while not quite living up to the hype it promised years ago, is still a must-have capability for service providers,” said O’Brien. “The talent element there is so important.”

The future isn’t here yet — but it isn’t far off. To prepare, companies and locations need to figure out how to blend the new technology with skilled, educated employees.


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