With 41% of respondents to an EY survey published this March saying their organisation is increasing investment in automation and Experian research showing that 2 in 5 businesses plan to automate their processes by the middle of 2020, it is clear that technologies such as machine learning, robotic process automation (RPA) and AI will play a large part in the future of work.
Financial services, with its rapid growth in online transaction volumes and increase in regulatory complexity in recent years, , is undoubtedly one of the industries that stands to benefit most from such a shift.
As transactional tasks like accounts reconciliation or journal entries are increasingly consigned to automation, specialist skills will still be required to understand novel situations.
While its efficiency gains are not in doubt, RPA has been labelled a mere “gateway drug” to digital transformation, with its application confined to menial tasks. If businesses are truly committed to becoming dynamic, adaptable organisations, they must take the next step on the ladder and go beyond narrow task-based automation tools towards technology based on human logic and subject matter experts. This means effectively capturing the expertise of fraud investigators to insurance underwriters, database analysts to financial advisers, and making it available at scale.
Human expertise is indispensable
Today’s automation technology will soon surpass human computational ability completely in terms of objectivity and accuracy – according to Finextra, in finance, machine-created credit decisions are expected to surpass human ones by 2024, demonstrating that this sector is no exception to the rule. However, AI still simply cannot compete with human intelligence when it comes to nuanced, contextual thinking and adapting to new circumstances.
These kinds of key differences can be applied to almost all industries, with finance leading the pack. Specifically, the industry is faced with enormous compliance challenges, in the wake of major political and regulatory changes (such as Brexit, the implementation of MiFID II or upcoming IR35 legislation). With more specialists needed to address these regulatory changes and their resulting technological demands, it is simply not realistic to expect humans alone to tackle challenges of this scale.
To efficiently utilise their resources, financial services firms must invest in intelligent automation solutions that can handle key aspects of nuanced compliance decision-making alongside employees, in turn easing the pressure on hiring and leaving relationship-based responsibilities to the most-qualified human experts. In other words, the firms that benefit most from the rise in automation will be those that free up specialists’ resources and allow them to focus on high-level, long-term and profit-building activities.
Specialist knowledge is gaining momentum
This kind of automation strategy maximises the value of human workers’ expertise and is likely to create remote, non-hierarchical workforces, composed of small, specialist teams working independently. These teams will have so-called ‘knowledge authors’ who create models of an expert’s knowledge within machines, which can make expert judgements on typical auditing scenarios, while human specialists are reserved for complex ‘edge cases’.
The unprecedented demands placed on work—due to the technological revolution of recent decades, new regulations and the ongoing coronavirus pandemic — mean that firms must undergo a fundamental change in approach in order to adapt and thrive. By embracing and investing in intelligent automation, the financial services industry can lead the way in transforming the role of human expertise by increasing the speed, accuracy and scalability of effective decision-making across organisations.
James Loft, COO at Rainbird