Robotic Process Automation Is Only Part of the Answer…
Given the clear and evident advantages offered to organizations, RPA will become an important way of driving operational efficiency and costs even lower. The days of simple labor arbitrage (or “lift and shift”) are done. To quote Bill Cline of KPMG, “Trying to cut costs in middle and back office operations by labor arbitrage, that is, offshoring work to lower cost countries, will no longer cut it.”
However, in the insurance space, we are still faced with major pressures on cost. Interest rates are, and look to remain, historically low, meaning that organizations can no longer grow their way out of trouble. Markets are still demographically challenging, with an aging population increasingly looking to withdraw investment, rather than make it. In short, insurance companies must still be looking to reduce their cost base.
RPA is part of the answer. High-volume, low-risk processes can and should be automated where possible, and the savings to large organizations will be quickly realized. RPA can be used to expose buried rules and processes to the end user, reducing the burden of IT reliance. RPA should be seen as an important tool in the risk manager’s ongoing challenge to mitigate the cost of human error.
But RPA is NOT a panacea for all of an organization’s legacy ills. True legacy transformation (data migrations, legacy system retirements, product and calculation rationalization, process improvement, etc.) must still be viewed as the only way to genuinely reduce technical debt, reduce operational risk and ultimately create a long-term, sustainable cost reduction. RPA is just one of the many tools that all legacy transformation programs should be using.
An RPA program will be much more efficient and deliver greater benefits if it is laid over a transformed and clean IT environment.
To learn more, please check out my white paper: Maximizing RPA for Financial Services Transformations.