Finance firms leading the way in automation software adoption

Financial services firms are leading the way in the adoption of software robots to complete repetitive tasks

Financial services firms are leading the way in the adoption of software robots to complete repetitive tasks previously carried out manually, with banks and health insurers reaping the benefits.

Health insurers are pioneering the use of software robots, with a quarter of them reducing their costs by more than 15% through the automation of middle office activities, such as claims coding and processing, according to research. 

Meanwhile, half of banks have reported increased revenue as a result of the adoption of automation technology, with three quarters expecting the same growth in 2016.

Banks are currently cutting their costs and improving efficiencies through automating back-office processes. This comes at the cost of thousands of jobs in middle and back offices. 

An example of this comes from Dutch bank ING, which will cut thousands of staff in its back offices, callcentres and IT department over the next three years, as it reduces its number of IT systems through automation. 

In October 2014, Lloyds Banking Group confirmed it will cut 9,000 jobs and close around 150 branches to focus on its digital strategy and increase automated processes.

The research from Cognizant questioned more than 500 business and IT executives across sectors and revealed that businesses were automating between 25 and 40% of routine manual workflows.

Most businesses surveyed said their take-up of automation tools is high but that they are still in the early stages. Half of them said automation will significantly improve their business processes, while 44% said it will better their business analytics activity.

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According to Cognizant business process services vice-president Gajen Kandiah, the shift to automation is "playing out in just about every industry”. 

But analysis of early projects, carried out by sourcing advisory Alsbridge, showed that IT services firms are expecting too much in terms of savings in the short term. 

The company said service providers predict 45% savings on IT services and up to 60% for managed services in the long term, mainly from cutting staff. But Alsbridge said accurate figures are rarely available and data that has emerged show savings are much lower than predicted.

Alsbridge director Homan Haghighi said there is an expectation gap emerging between what autonomics is delivering in the short term and the savings predicted in the long term.

“There is no doubt that autonomics has the potential to be a game-changer for IT service delivery but any implementation carries significant deployment and execution risks,” he said.

“It is too early in the technology adoption cycle to be certain on short term savings and the investment required in training and transition to adopt autonomics. When we have looked at live autonomics deployments, these factors combine to depress short-term savings significantly below the 45-60% range claimed.”

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