We live in interesting times. From political turmoil and election surprises to rising nationalism and protectionism, any outsider may well be sceptical about where markets are going. Yet the UAE CEO Outlook KPMG released in September 2017 shows positivity throughout industries, including the banking sector: 88 per cent of the CEOs interviewed expect their own industries to grow over the next three years. Perhaps even more surprising, constant change actually drives optimism - where some people see risk and focus on damage control, leaders see opportunities to improve, to create new markets and to encourage growth.
Innovation - such an important factor in economic growth - happens faster in the banking sector. Until relatively recently, the sector was closely guarded by protectionist rules and a lack of truly differentiated options. Advancements in technology have made data storage and processing power faster and cheaper. Browsing the Internet has become many people's preferred weekend activity.
Fintech is paving the way for radical disruption of both the financial services industry and capital markets. Banks recognise that technology is a major driver of opportunities as well as cost, so key decision makers - and the regulators - are cautiously navigating through some more radical concepts like blockchain, cloud computing and artificial intelligence (AI). Still though, millions of staff hours are devoted to trivial or manual activities, particularly in customer service, business support and operations.
While big data or deep learning may grab headlines, the figures speak for themselves: automate trivial tasks and banks will reap huge benefits, not just in terms of significantly reduced costs and improved speed and accuracy, but also improved leadership, with staff freed up to focus on higher value activities.
This is where robotic process automation (RPA) helps. RPA is automation software that executes tasks and activities in the same way a human operator would interact with applications and systems. At KPMG, we call it digital labour - replicating the specific actions and decisions an operator would take while working on the computer and interacting with an IT application.
In the next 15 years, some analysts suggest that at least half - and possibly as many as three-quarters - of back and middle office jobs in the banking sector will be performed by RPA. And it is not just administrative roles. Today's complex global financial markets require unprecedented levels of speed, accuracy and cost efficiency - beyond what a human can provide. That's why banks are increasingly turning to RPA and AI-driven cognitive automation to transform their businesses.
Although capital markets have been expanding, competition from traditional competitors as well as from disruptive new entrants is increasing. Some of these new entrants are far more nimble and tech savvy than established firms with legacy infrastructure to support. This increased competition, together with the ever-mounting pressure to reduce costs means firms have to work smarter, not just harder.
RPA is the use of machine intelligence and software tools to perform human tasks. Cognitive automation is a confluence of many technologies including natural language processing, machine learning, data analytics and probabilistic reasoning - which combine to interact, learn and simulate decision making the way a human does.
One important aspect of RPA that should be considered early in the process is how to get employee buy-in. This will be particularly important in the GCC, where the finance sector has been one of the most significant sources of coveted private sector jobs. Banking isn't the only industry that will be affected - some industry observers predict that more than 100 million knowledge workers could be replaced by robots by 2026.
Without building employee support - by focusing on operational effectiveness and efficiency, demonstrating the value of being involved with these high-tech tools, building quick wins and ensuring that systems work before rolling them out - the process is likely to be slow, difficult and disruptive.
RPA solutions assist organisations to improve service delivery, reduce costs and derive specific business outcomes to achieve sustainable, continuous improvements and competitive advantage. However, it is important to assess where RPA offers the most benefits by identifying how and where RPA can be used to optimise processes, as well as selecting the right automation vendor. Once a bot has been selected, appropriate programming is critical so it replicates the actions of a human operator, logs all activities and identifies exceptions where further investigation is required.
RPA already has a place in the banking sector. It is generating significant labor cost savings and offers significant benefits in terms of speed, accuracy and productivity - and the ability to gather, input, and analyse vast amounts of data. For banks, both here in the UAE and more broadly, the questions key decision makers should be thinking about are "How quickly do I want to get on board?" and "How deeply do I want to dive in?" Your long-term survival may depend on your answers.
The writer is a partner with KPMG Lower Gulf leads the firm's digital transformation practice. Views expressed are his own and do not reflect the newspaper's policy.
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