3 Benefits of Robotic Process Automation
Robotic Process Automation (RPA) has generated a wealth of opinions in recent months, ranging from being described as the “golden goose” for operational savings, to another instance of the “emperor’s new clothes” in the financial services world.
This blog post looks at RPA’s business benefits.
What is RPA?
In its most basic form, Robotic Process Automation is the simple automation of existing processes. But the term can be extended to include much more, from sophisticated rules and decision management, through to artificial intelligence and self-learning software.
For the purposes of this blog post, I am defining RPA as the automation of the existing business operational model, turning tasks that are currently manual into fully automated processes.
RPA’s Strong Business Benefits
There is solid support for the statement that all financial services organizations can benefit from an RPA program. A KPMG report makes the startling claim that labor automation through RPA can reduce an organization’s operational costs by 75 percent! It’s a bold statement, but one that is certainly believable.
Historically, labor arbitrage has been the easiest and quickest route to substantial operational cost savings. This is true from the days of the Industrial Revolution, during Henry Ford’s production line, through to the race for Business Process Outsourcing (BPO) solutions. RPA is the next logical evolution of labor arbitrage ‒ instead of using low-cost offshore resources, an organization can now use even cheaper robotic resources.
The economic case for RPA is substantial, both in terms of operational and infrastructure costs. Frank Casale of the Institute for Robotic Process Automation (IRPA) suggests that “most IT infrastructure support jobs will be eliminated over the next three years.” Replacing a call center operative from New York with one from Mumbai will save money, but replacing the call center operative in Mumbai with a robot will save even more.
There are three other main RPA benefits:
Reduces Reliance on IT
In addition to the obvious savings in terms of operational overheads, IT reliance can and should be reduced by an RPA program. One of the key tenets for RPA is that it empowers the business in managing their operation and removes what at times are viewed as the dependency on, and constraints imposed by, IT. RPA, according to Cathey Tornbohm, vice president of BPO and services research, “doesn’t need much, if any, IT support.”
Scalability
Another major benefit of RPA over labor arbitrage is the ability to scale quickly, both in terms of expansion and contraction. The onboarding of new staff members is both costly and time-consuming. If this cost is considered in light of some of the high turnover within BPO markets, then it becomes a real drag on an organization’s ability to get to its optimal operation cost. There are no onboarding costs for a robot. To be fair, though, there are project costs for implementing the robotic processes. The volume of business throughput is no longer dependent on human resource constraints with RPA.
Consistency of Process
RPA also offers the benefit of consistency of process. Even the best scripted, highest educated call center staff can still interpret a process in different ways. Depending on which staff member the customer speaks with on a given day, that customer can have a fundamentally different experience. RPA homogenizes the experience. This is particularly true in areas of high impact, such as risk assessment.
RPA introduces repeatable processes that are subject to rules and preciseness that even the smartest individuals cannot maintain. The renewal process of an income protection claim requires several steps that should be identical for each customer (identification of the customer, confirmation of disability, validation of product rules, etc.). These steps can all be automated to ensure that the customer, instead of having multiple points of contact with the insurer, has only to initiate the renewal request. RPA takes care of the rest.
To learn more, please check out my white paper: Maximizing RPA for Financial Services Transformations.
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Jeff Denham Jeff Denham is an experienced insurance professional with over 25 years of experience in the pensions industry, working with a range of UK and Canadian retirement specialists in advisory and operational roles. Most recently, he has worked on major retirement legislative changes in the UK.