The financial services industry has become a hotspot of digital innovation, driven by changing customer expectations, heightened competition by new entrants and incumbents, stringent regulations and technological advancements. Hong Kong was one of the first movers in the region by launching virtual bank licences, with eight awarded in 2020. In response to the emergence of digital rivals, traditional banks have also upgraded their digital channels since 2019.
Embracing the digital world is a strategic imperative to ride the economic recovery wave and build business resiliency. The pandemic exposed many productivity gaps between companies that adequately invested in digital platforms to continue business operations with a remote workforce and those still reliant on manual processes.
While there have been rising investments and momentum in digitalisation across the region, Hong Kong’s financial industry still has an untapped opportunity in the Intelligent Automation and Robotic Process Automation (RPA) space, highlighting the significant potential for growth. According to the latest Blue Prism “RPA in the APAC Financial Services Sector” research, almost half (47%) of Hong Kong respondents indicated that their organisations are currently using RPA solutions and technologies. Among them, finance departments had the highest adoption rates (79%), ahead of customer service departments (71%) and sales and marketing departments (59%). These findings unveiled that there are still many areas and opportunities to leverage RPA.
So, what is RPA and Intelligent Automation, and how can they be leveraged to transform the workforce and processes in Hong Kong’s financial industry?
Understanding RPA as a form of Intelligent Automation
RPA is a type of software that mimics the activities of a human being in carrying out a task within a process. It takes on repetitive work tasks quickly and accurately, freeing up the human workforce to take on other tasks that require a human touch, such as emotional intelligence. As Leslie Willcocks, Professor at London School of Economics, explains, the digital workers “takes the robot out of the human”.
Traditionally, the route to automation has been primarily driven by cost reduction. Now, companies are using automation to operate more efficiently and productively and as a lever to better manage organisational risk, grow revenue, and transform the customer experience. Regionally, organisations that have adopted RPA reported an overall improvement in business operations. This includes error and cost reduction, empowering the human workforce to focus on higher-value tasks and increasing organisational efficiencies.
Through the lens of FSI’s, a lower price point of operation can be achieved with digital workers. With a digital workforce, innovation can be executed directly by the business and does not require new test environments or the deployment of people. Additionally, these executions are operated within the governance of the IT department and industry-leading security standards of the digital workers.
Key to revitalising legacy systems
Financial services organisations are bounded by ever-changing stringent regulations and the Hong Kong Monetary Authority’s (HKMA) compliance measures, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) scheme. Albeit mandatory and important, manual processes to meet and manage these requirements are resource-intensive and time-consuming. This is coupled with the growing expectations of consumers and businesses for a speedy, high-quality experience when applying for a loan, credit card or bank account. With thinning brand loyalty, many of these customers would simply approach competitors.
The growing amount of task repetition, constant data re-keying and manual checking also mean that human workers could understandably lose focus and make mistakes in KYC and AML checking. Siloed systems, often based on spreadsheets, errors in data and a lack of data storage standardisation can also slow down many business processes.
To breathe life into legacy systems and process infrastructure, banks are using advanced RPA. As an upgrade from their traditional counterparts, these sophisticated digital workers act as scalable counterparts that collaborate with humans daily. Powered with artificial intelligence, cognitive learning and natural language processing, these digital workers can carry out multiple checks simultaneously and complete fields in a loan application automatically. Missing customer information and proactive progress updates are flagged and delivered to human workers, easing their workloads and freeing up precious time to focus on building human relationships. Furthermore, given the fact that RPA can be improved with the help of artificial intelligence, the potential is limitless with Intelligent Automation.
For example, compliance teams within asset management firms in APAC have implemented workflows, including searching through various internal banking and document management systems to collate them into client records. They have reported substantial cost savings associated with extensive internal operational efficiencies.
Unlocking business opportunities with speed and agility
Innovation and organisational transformation that were once cost-prohibitive is now achievable. Today’s intelligent and advanced automation solutions enable organisations to respond to operational challenges with great speed and agility while breathing new life into legacy systems. Automation of processes also boosts organisational resiliency. These digital workers can handle multiple processes simultaneously, alleviating the human workforce from mundane, time-intensive tasks and operating round-the-clock.
While these digital workers streamline checks and processes, employees can better utilise their time to innovate and forge stronger relationships with customers and stakeholders. Optimising processes end-to-end, these organisations are also better poised to innovate, offer a broader portfolio of products, and reimagine the customer experience. According to KPMG, digital transformation remains a key pillar of growth for Hong Kong to retain its position as a leading international finance centre in 2022.
“RPA in the APAC Financial Services Sector” research found that more than 60% of Hong Kong organisations currently implementing RPA are looking to invest a quarter or more of their total automation budget in RPA in the next three years. With the continued investment in digital transformation, organisations in the financial services industry should look towards implementing new and transformative ways of operating and unlocking business opportunities and resiliency.
By Robert Dewar, Vice President, Financial Services, Asia Pacific, Blue Prism