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AI CAN BE TRANSFORMATIVE ESPECIALLY IF YOU’RE SMART ABOUT IMPLEMENTATION

Luis Huerta, Vice President and Intelligent Automation Practice Head, Europe for Firstsource 

 

Artificial Intelligence (AI) will continue to play an increasingly critical role in financial services as we go into 2021 and beyond, thanks to its potential to streamline operations, reduce costs, improve business outcomes and increase competitive advantage. Recognising these benefits, finance companies are capitalising on the technology as evidenced by the fact that AI-related technologies adoption grew during the pandemic while other tech initiatives stalled or were cancelled.

However, the full benefits of AI will only be realised if businesses effectively manage the human side of the digital transformation process. Which is tough. In fact, 81 percent of senior executives in the financial services rate change initiatives as incredibly stressful. And, more than a third (35%) find transformation projects as or more stressful than the COVID-19 lockdown itself, according to recent Firstsource research. Therefore, to realise the benefits of AI while mitigating stress and keeping teams running effectively implementation needs to be managed very carefully.

 

The power of AI

AI investments can be game-changing in accelerating processes for financial services companies. Loan application for the new, government-backed loans to support companies impacted by COVID-19 provides a prime example of where AI can deliver value. The high volume of applications has put unprecedented demand on financial institutions. Manually processing these, in a time-effective manner is unfeasible. AI driven automation is one way to overcome this challenge by processing and delivering customer service at scale based on data insights.

Luis Huerta

AI solutions can also help avert financial crime. Supervised learning algorithms can identify data patterns and flag suspicious behaviours, enabling proactive investigation. Alongside preventing fraud itself, this decreases the possibility of disruptive investigations and fines if a fraud case occurs. Furthermore, the volume of suspicious transactions that can be identified and investigated is not dependent on the number of staff available anymore, enabling organisations to scale and increase coverage.

Finally, by applying AI to existing data lakes, lenders can design customised contact and collection strategies, tailored to the needs of each borrower. For example, by analysing and identifying the channel and time that is most likely to result in customer engagement. This will not only ensure that issues are resolved effectively but help build positive customer relationships. This is a particularly crucial consideration during the pandemic as both businesses and customers are under greater strain.

 

Managing the human impacts of AI implementation

It is clear that AI can deliver significant operational advantages for financial services businesses. However, the implementation of this technology can be challenging.

Business leaders rate managing the emotional rollercoaster as the most difficult challenge during change projects, such as the roll out of AI initiatives. With 70 percent of financial services leaders saying they found digital transformation difficult or very difficult to navigate. As one Chief Financial Officer explained: “You can become over-focused on a programme. You actually live and breathe the whole thing yourself. When it’s going badly, you’re going badly, and when it’s going well, you’re going well. You take on the personality of the stage of the programme you’re in. And that makes it very, very tough.”

To manage these challenges, business leaders advise that their colleagues look out for micro-management. They should also try to spot whether teams are pushing themselves too hard without setting aside time to celebrate wins. Business leaders also extol the benefits of developing a supportive, collaborative culture; which avoids blame placing when things aren’t going to plan and sees mistakes as learning opportunities. A Chief Digital Officer outlined the importance of this: “It’s about trying to say to people; ‘It’s OK to be wrong. No one is perfect. In fact, everybody is almost completely imperfect, and it’s about how we deal with that.”

Those leading the AI charge should also remember that the outcomes from their transformation project won’t be binary. Therefore, it is necessary to manage stakeholder expectations to prevent disappointment. For example, educating colleagues on the fact that AI models will evolve and mature as time goes on and with increasing amounts of data inputted. Raising awareness of AI performance over time is essential for ensuring projects don’t over promise and under-deliver. To this end, it is key that AI is only implemented in response to specific business needs. Introduction of the technology should not be treated as an outcome itself.

 

The best of both worlds

When aligned with business goals, AI’s transformative capabilities will help ensure financial services companies thrive in 2021. However, the people-focused challenges of any digital transformation projects cannot be ignored. This can be managed by recognising that projects will have highs and lows, and proactively planning for how the team will pull through them together. In doing so, financial services will reap the benefits of AI while managing the pressure on colleagues.

 

Business

BOUNCING BACK IN 2021: DIGITAL TRANSFORMATION IS NO LONGER A CHOICE AS DEPENDENCE ON 5G, IOT AND DATA INCREASES IN SOCIETY AND BUSINESS

Ivan Ericsson, Head of Quality Management, Expleo Group Limited

 

The global pandemic has put enormous strain on businesses and brought into sharp focus the importance of being agile, adaptable and able to increase the pace of innovation and change at short notice – catapulting technology right to the top of the agenda for many organisations.

As the economy works to get back on its feet, technology is only going to play a bigger role in our lives. At Expleo, as experts in digital transformation and the reliable implementation of technological innovations, we’ve outlined the biggest tech-driven trends that we expect to see in 2021 and beyond.

 

1)     “Digital transformation” no longer a choice

If the COVID-19 pandemic has taught businesses anything, it’s that they need to be poised to respond to abrupt market disruption at any moment, making digital transformation mandatory overnight.

With no room for delay, hugely complex corporations – that have historically been slow to adopt technology – have had to accelerate their reliance on technology just to keep afloat in recent months. Digital change, at speed, has become the norm.

Even last year, the idea of an unscheduled video conference call might put people on edge – now most of us wouldn’t think twice about calling a colleague over Teams or Zoom even for a 2-minute conversation. At the same time, social infrastructure has moved with the needs of its users, with telecoms giants strengthening and opening up networks so we can keep communicating despite social distancing.

There are now very few excuses left for operating in a non-digital way. All businesses need to be intelligent businesses that can change direction nimbly, with speed, confidence and composure. As we see more businesses putting this into practice, it’ll likely result in an increased number embracing and normalising some of the behaviours of tech-savvy giants like Apple and Amazon, who have no doubt thrived during this period.

Their success can largely be attributed to normalising an agile approach. By ensuring all applications have testing facilities built in – a “quality shadow” if you will – it allows for continuous improvements, and the ability to change direction quickly and confidently, when needed. This is particularly valuable today as the world becomes more fast-paced and increasingly unpredictable.

 

2)     Big data/AI/predictive analytics 

We’re moving into a space where big data can be extracted from the most seemingly innocuous places. In a hyper-connected world, a move as simple as a dog walk could offer huge swathes of data to the right companies. Many businesses already realise the benefits of capturing and utilising big data, but not all have taken advantage of it. The businesses that move quickest are most likely to reap the rewards in a more impactful way than their ‘data shy’ competitors. Where data used to be a side effect of business operation, it is now the driving force.

As businesses begin to rely more heavily on data to make critical decisions, independent assurance becomes increasingly important to get those decisions right. Forward-thinking, data-driven organisations must therefore assure that the data is correct in the first place, to avoid giving businesses false confidence and risk them moving in the wrong direction – something that is rarely affordable in today’s competitive and fast-paced environment. If businesses are not 100% confident in assuring the quality and accuracy of their own data, they should look to a third party for support.

A key data trend we expect to see moving further into 2021 is the increased use of predictive analytics. At the moment, businesses will often use data analytics to give us insights into our past activities, or to tell us where we are right now. However, the real value lies in knowing where we are going and how we are going to get there. Data analytics will help to identify the optional levels that can be pulled to drive change and realise business benefit.

Secondly, as intuitive technology advances and becomes more accessible, we expect over the next 12 months to see companies of all sizes begin to adopt artificial intelligence (AI) to drive intelligent analytics. In this context, AI refers to various technologies that allow machines to learn, sifting through ‘messy’ big data in order to find and unlock valuable predictive insights into future events. This allows businesses to better adapt their strategy to likely future outcomes and get a head start in the market.

However, with this ever-increasing emphasis on data and data protection, ethical AI will have a more prominent role to play in 2021 and beyond. Protected, usable Data is a by-product of good data security and privacy measures; however, the public remain wary of how their data is being used, particularly after the fallout from Cambridge Analytica’s use of data to influence an election[1]. Businesses, therefore, must give their customers confidence that their data is secure and protected.

 

3)     Moral relevance/corporate altruism

Research shows that young people are increasingly researching and considering the ethics of brands they’re purchasing from. And it won’t be long before this attitude starts seeping into every other aspect of their lives, with more and more people wanting to work for what they consider to be “purpose-driven” businesses.

Talent is the lifeblood of any company, so for big corporations, many of whom were born to create profit, this could put them in a tricky position. They might already be influencing society in a positive way – but this is unlikely to have ever been their main goal.

Moving forward, however, all organisations will have to start thinking about the “Triple Bottom Line”. That means considering the environmental and social impact of your business, alongside your commercial imperative.

We’ll soon see a mindset switch across businesses, from ‘competing’ to ‘advancing’. Instead of wanting to be the “best,” the question will be, how can I better serve the world around me?

In line with this, businesses will have to start thinking more about how to use tech for good, as we’ve seen with the likes of Microsoft Teams connecting tens of millions of people every day, during this very dark time[2].

2021 is likely to bring even more inroads when it comes to using technology to improve society, whether it’s developing bespoke problem-solving technologies or using IT to ‘eco-proof’ existing sectors, the goal for businesses is to rise to this challenge and build a better future for people and the planet through the use of technology. But all organisations will continue to need to be able to justify technology use and prove that they’re using it ethically, and in a secure manner.

 

4)     5G new networks – just about all big trends are driven by/reliant upon faster networks – particularly relevant for a more distributed workforce 

Greater access and utilisation of 5G networks across the country will underpin and accelerate all of the key trends discussed. Everything we do on our smart devices we can expect to do at higher speed, greater capacity and with lower lag times.

As our digital footprints extend beyond simple web browsing and into our daily lives through smart technology, we are creating huge amounts of data every minute. This vast flow of data is increasingly dependent on new high bandwidth networks to facilitate it. Therefore, the merging of technology and engineering will become critical in ensuring big data is carried successfully to drive analytics and drive business.

The fact we have managed to successfully work from home during COVID is a glowing recommendation for the quality of the networks as they exist today, and they will only get better.

The telecoms industry is already working overtime to ensure that people all over the country get reliable access to the internet – and the fact that there is still inequality in this area proves just how challenging this is. But, in line with this trend toward hyper automation, which will make data extraction and analysis a part of everyday life for businesses, the consolidation of tech and engineering will be ever more important.

Forward-thinking companies will look to incorporate 5G networks into their business strategy. This could be from an internal perspective to enhance the abilities of their remote workforce. Alternatively, this could relate to their own products or offerings – developing an internet of things (IoT) strategy, improve user experience, or bring products to market faster by analysing big data and adapting quicker. Either way, with increasingly improved networks, businesses are expected to take advantage of the huge increase in accessible and usable data.

 

Concluding comments:

For businesses to truly reap the benefits of these new technologies, they must be developed and adopted in the right way.

Quality assurance, trust and security are three key requirements that the technology of the future depends on to succeed. Having these requirements at the heart of any digital transformation will ensure that systems perform reliably, having been tested and assured.

By prioritising a seamless customer experience combined with an ability to create, test, and scale digital solutions and operationalise at pace, businesses will be in the best possible position to take advantage of the potential being unlocked by these new technologies.

 

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Technology

DRIVING DIGITAL TRANSFORMATION IN 2020

by Andrew Foster, VP Consulting EMEA, AppZen

 

As organisations adapt to dramatic changes in working practices, the need for digital transformation has increased dramatically. Many organisations have been forced to move quickly to virtualise and digitise, as 2020 has seen huge changes in how (and which) businesses operate in an increasingly uncertain economic landscape.

The current crisis presents many challenges but it also presents unique opportunities for business transformation. As Nobel prize winning economist Paul Romer once stated, “A crisis is a terrible thing to waste.”

 

Desire to adapt to new ways of working

As companies respond to new challenges, the way teams approach problems and the way they work together to provide business value can change for the better. Formerly disparate teams are now coming together to work on collaborative solutions to resolve current problems.

Today’s business climate presents an opportune time for finance teams to use digitisation to reduce the amount of time and effort they expend on manual processes, so that they can increase their focus on managing core business issues and making more strategic decisions.

In a time of such dramatic, forced change, many of the usual constraints to business evolution have been removed. Concerns about breaking out of comfort zones or making changes too quickly are gone as companies look to solve the clear and immediate challenges they are facing. Similarly, structural inhibitors – like teams working in silos, general inertia and inflexible processes – are being replaced with a renewed energy and a common desire to adapt quickly to new ways of working.

This year is proving to be a catalyst for important organisational changes. As savings become more crucial to company survival, the misalignment of resources across the financial function can no longer be ignored. Most businesses can benefit from digital transformation to help finance teams modernise and become more efficient, effective and resilient.

Finance is a business function that can be dramatically improved through automation and the use of intelligent software in decision making. It’s arguable that the finance function of the future is being born out of the current necessity.

 

Focus on fundamental shifts

As they adapt to new ways of working, finance teams should focus their transformation efforts in areas where they can make fundamental, long-term changes. This means accelerating existing digitisation programmes and picking up on existing industry trends that go beyond short-term firefighting efforts merely designed to get through the current challenges.

Within the financial function there is an increased need for agile forecasting and reporting processes that rely on live data, rather than extracts, spreadsheets and manual reports. Finance teams were already making this shift, but this year has seen a more urgent need for real-time metrics that reflect the evolution of a rapidly changing business environment. This shift in approach is likely to be permanent with no reversion after the crisis is over.

Another important trend has seen many offices shift to remote working, and finance teams have been driven away from the standard practice of gathering paper-based documents and receipts. The ability to apply AI to paper trail-based processes has simplified a once tedious operation, making room for lasting change.

 

Why finance processes are ideal for transformation

Many finance processes have three characteristics in common that AI is well suited to transform: they are based on paper trails, require contextual information and operate at high volume.

In finance departments there is traditionally a paper-based, unstructured information flow. Many companies are still dealing with largely manual processes that are very time consuming and error prone. AI can understand unstructured finance documents, like receipts, POs and contracts. Unlike general purpose OCR systems that make basic mistakes, like confusing a ‘$’ and an ‘S’ or a ‘£’ and a ‘6,’ finance focused AI is much more accurate.

There is also the need for contextual information from outside and inside the organisation. AI can enrich the paper trail with a lot more context. It can look at the entire history of expenses for duplicates, for example. It can compare prices, suppliers and individuals against publicly available information, like Google searches and proprietary company information.

Large volumes of paperwork make comprehensive manual work cost-prohibitive and prone to error. Unlike a team of people, AI never rests, and can scale infinitely. It can apply the same level of rigour to every document, meaning a much more thorough and accurate analysis is undertaken in a fraction of the time.

 

Fix the misalignment of resources and value

The misalignment of resources and value across financial functions makes transformation absolutely critical for success. Most of finance’s resources and time are traditionally spent performing transacting, record keeping, reporting, and compliance duties. While these activities are crucial to the business function, they do not drive enormous added value. By allocating so many resources to these activities, finance teams don’t have the bandwidth to spend on financial planning or strategic activities that would increase the value they provide to their organisations and contribute significantly to success.

By implementing AI driven systems, finance teams are rebalanced. They can focus more of their time on strategic finance initiatives rather than on manual and tedious tasks. As digital transformation programmes are accelerated, finance teams can look at making a more permanent change and realigning their focus to areas of the business where they can add the most value.

 

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