Banks still need to better understand robotics application.
Over the last 12 months, KPMG said we have seen many banks in Hong Kong explore the use of robotics to automate processes, streamline their operations and increase efficiency, primarily throughout their back and middle office functions. While 2018 may not be the year where robots take over banking, KPMG does expect rapid progress in this area during the next 12 months.
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However, while these banks have actively experimented with proof of concepts and prototypes, some have done so without carefully thinking about how to most effectively apply advanced robotics technologies to their business. In many cases, robotics is just being used as a stop-gap measure to overcome flaws in the banks’ system architecture.
Furthermore, many banks have not comprehensively considered and implemented strategies to deal with the potential data and security issues around robotics; digital data is a key component that allows robots to perform their functions effectively.
As a result, going into 2018, banks need to delve deeper into understanding the overall application of robotics throughout the organisation, and prioritise the specific processes they want to target. One example would be to examine business processes where structured (e.g. supplier databases) or unstructured data (e.g. emails, contracts) are used to make judgements and business decisions. If these user processes are labour intensive and time consuming, robotics would lend itself well to the task. Another potential area to target is stable, repeatable processes such as Balance Sheet Substantiation or Reconciliations. Increasingly, machine learning can be applied to bring more automated intelligence into these processes.
Hong Kong banks will therefore need to use the next 12 months to assess how the adoption of robotics and the subsequent process changes will affect their organisational and people strategies. One common misconception about advanced robotics technologies is that they will eliminate most of the jobs currently performed by the human workforce. On the contrary, robotics in banking helps take away some of the most undesirable jobs, which enables the bank to strategically deploy human resources to the areas where they add the most value, and allows the existing workforce to do their jobs more effectively.
As robotics continues to take root among financial institutions in Hong Kong, a key focus for banks in 2018 will be on developing their people and talent programmes to attract and retain the right skills. We are starting to see banks set up digital communities and help their teams understand the intricacies and benefits of working alongside a bot. This trend is undoubtedly going to continue, as banks adopt a more holistic approach to robotics, evaluate the potential impact of these technologies on controls and governance, and carefully consider which specific processes to target in order to minimise costs and maximise the value and effectiveness of their employees.
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