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Why robotics is reshaping the world of RPA and IA

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By Adriaan Kom, CCO at Visma | Onguard

 

New and exciting technologies such as robotic process automation (RPA) and intelligent automation (IA) are making a significant impact on the financial sector, performing tasks that were once carried out by teams of people, saving time and money. Indeed, financial institutions such as banks, that don’t engage and incorporate this technology into their systems run the very serious risk of falling behind their competitors.

When it comes to RPA, there has been a recent rush in its uptake. In essence it is a software robot that mimics human activity by carrying out routine processes with the potential to reduce the number of operational errors and increase efficiency as robots or ‘bots’ operate 24/7. There is also a cost-saving element to this as the employees who would have once been in involved in a manual process can be replaced by a single programmed robot. Furthermore, there should invariably be an increase in customer satisfaction because of the speed of work, resulting in a faster turnaround and improved accountability as the audit logs of robot operations are readily available.

 

Research confirms the rush towards RPA

Recent research data from Visma | Onguard confirms there has been a significant uptake of RPA, which illustrates the point that data is playing a prominent role in reshaping the strategy for more financial businesses and creating a range of opportunities by improving the efficiency of processes, cutting expenditure and maximising daily repetitive routines.

Adriaan Kom, CCO at Visma

Adriaan Kom

The 2021 Fintech Barometer survey showed 61% of organisations now either use RPA or are developing ideas on how to incorporate the technology into their businesses and represents a 15% increase compared to figures from 2020 (46%).

There has also been an increase in the use of IA tools, which expands on the functionality of RPA through supporting technology solutions such Artificial Intelligence (AI) and Machine Learning (ML).

However, it is worth remembering that this technology does not mean that in the future people will be completely replaced by machines and robots – far from it. It simply means that RPA will ensure financial sector institutions are better able to utilise their employees and add value to their business operations while delegating repetitive tasks to automated machines.

Significantly, close to half (47%) of those who took part in the survey said AI was the largest trend to make an impact across the financial sector, increasing from 36% in 2020 and 29% in 2019. In addition, AI also came out on top in terms of its perceived impact on order-to-cash processes – jumping from 36% in 2020 to 40% in 2021.

 

Increased IA take-up

However, IA technology has seen an even greater take-up in the sector, with 53% of those surveyed reporting the use of tools in their businesses. A great deal of this is likely to have been driven by the need for financial organisations to harness data-driven insights and use them to inform decision-making and define business strategy. This is reflected in the fact that almost two-thirds (65%) of financial businesses say they were either fully data-driven organisations or that data supports their processes.

Big data was also identified by 44% of those surveyed as one of the top three trends to have positive effects on the financial sector, representing an increase from 36% in 2020.

As the importance of data becomes more widely known to the financial sector, it will play a more prominent role in shaping strategy for more businesses. Just 8% of businesses reported that they were not planning on becoming fully data-driven at some point in the future, which was down by 5% compared to 2020 (13%).

 

Technology will support the data-driven dream in 2022

The 2021 Fintech Barometer shows that many financial organisations are beginning to embrace the concepts of RPA and IA, even if they have yet to fully utilise it in their operations. A great deal of this uptake is because data is now driving processes and technology solutions, with big data among the biggest trends across the sector.

As financial professionals work to further understand how they can apply and utilise data within their organisations, it is inevitable that we will continue to see an increase in the use of emerging solutions, such as RPA and IA, during 2022.  It’s clear that robotics and IA are playing a key role in helping financial businesses to improve their overall efficiency, and in an industry of constant change and innovation, embracing technology that can support modern day finance professionals to achieve their data-driven dreams will be crucial for providing them with that all important competitive edge.

 

Banking

Wealth Managers and the Future of Trust: Insights from CFA Institute’s 2022 Investor Trust Study

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Author: Rhodri Preece, CFA, Senior Head of Research, CFA Institute

 

Corporate responsibility is more important than ever. Today, many investors expect more than just profit from their financial decisions; they want easy access to financial products and to be able to express personal values through their investments. Crucial to meeting these new investor expectations is trust in the financial services providers that enable investors to build wealth and realise personal goals. Trust is the bedrock of client relationships and investor confidence.

The 2022 CFA Institute Investor Trust Study – the fifth in a biennial series – found that trust levels in financial services among retail and institutional investors have reached an all-time high. Reflecting the views of 3,588 retail investors and 976 institutional investors across 15 markets globally, the report is a barometer of sentiment and an encouraging indicator of the trust gains in financial services.

Wealth managers may want to know how this trust can be cultivated, and how they can enhance it within their own organisations. I outline three key trends that will shape the future of client trust.

 

THE RISE OF ESG

ESG metrics have risen to prominence in recent years, as investors increasingly look at environmental, social and governance factors when assessing risks and opportunities. These metrics have an impact on investor confidence and their propensity to invest; we find that among retail investors, 31% expect ESG investing to result in higher risk-adjusted returns, while 44% are primarily motivated to invest in ESG strategies because they want to express personal values or invest in companies that have a positive impact on society or the environment.

The Trust Study shows us that ESG is stimulating confidence more broadly. Of those surveyed, 78% of institutional investors said the growth of ESG strategies had improved their trust in financial services. 100% of this group expressed an interest in ESG investing strategies, as did 77% of retail investors.

There are also different priorities within ESG strategies, and our study found a clear divide between which issues were top of mind for retail investors compared to institutional investors. Retail investors were more focused on investments that tackled climate change and clean energy use, while institutional investors placed a greater focus on data protection and privacy, and sustainable supply chain management.

What is clear is that the rise of ESG investing is building trust and creating opportunities for new products.

TECHNOLOGY MULTIPLIES TRUST

Technology has the power to democratise finance. In financial services, technological developments have lowered costs and increased access to markets, thereby levelling the playing field. Allowing easy monitoring of investments, digital platforms and apps are empowering more people than ever to engage in investing. For wealth managers, these digital advancements mean an opportunity for improved connection and communication with investors, a strategy that also enhances trust.

The study shows us that the benefits of technology are being felt, with 50% of retail investors and 87% of institutional investors expressing that increased use of technology increases trust in their financial advisers and asset managers, respectively. Technology is also leading to enhanced transparency, with the majority of retail and institutional investors believing that their adviser or investment firms are very transparent.

It’s worth acknowledging here that a taste for technology-based investing varies across age groups. More than 70% of millennials expressed a preference for technology tools to help navigate their investment strategy over a human advisor. Of the over-65s surveyed, however, just 30% expressed the same choice.

 

THE PULL OF PERSONALISATION

How does an investor’s personal connection to their investments manifest? There are two primary ways. The first is to have an adviser who understands you personally, the second is to have investments that achieve your personal objectives and resonate with what you value.

Among retail investors surveyed for the study, 78% expressed a desire for personalised products or services to help them meet their investing needs. Of these, 68% said they’d pay higher fees for this service.

So, what does personalisation actually look like? The study identifies the top three products of interest among retail investors. They are: direct indexing (investment indexes that are tailored to specific needs); impact funds (those that allow investors to pursue strategies designed to achieve specific real-world outcomes); and personalised research (customised for each investor).

When it comes to this last product, it’s worth noting that choosing advisors with shared values is also becoming more significant. Three-quarters of respondents to the survey said having an adviser that shares one’s values is at least somewhat important to them. Another way a personal connection with clients can be established is through a strong brand, and the proportion of retail investors favouring a brand they can trust over individuals they can count on continues to grow; it reached 55% in the 2022 survey, up from 51% in 2020 and 33% in 2016.

 

TRUST IN THE FUTURE

As the pressure on corporations to demonstrate their trustworthiness increases, investors will also look to financial services to bolster trust. Wealth managers that embrace ESG issues and preferences, enhanced technology tools, and personalisation, can demonstrate their value and build durable client relationships over market cycles.

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UK Organisations turn to artificial intelligence to fight sophisticated cyberattacks

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New research by cybersecurity expert Mimecast finds that email attacks are becoming more frequent and sophisticated

More and more companies in the UK are using artificial intelligence (AI) and machine learning (ML) to fend off increasingly sophisticated cyber-attacks, according to new research from cybersecurity specialist Mimecast. The research finds that 40% of UK organisations are already using AI or ML in their organisations’ cybersecurity programme, with 30% planning to do so within the next 12 months.

The use of advanced technologies such as AI and ML is in direct response to the growing sophistication of cyberattacks that UK businesses are experiencing. 53% believe that increasingly sophisticated attacks will be their biggest email security challenge in 2022, leading to 80% believing it is at least likely their organisation will suffer a negative business impact from an email-borne attack this year.

 

Growing threat landscape

The research shows that email remains the largest threat vector for UK businesses, with 71% of respondents reporting an increase in the volume of email threats their organisation has faced in the last 12 months. This includes phishing with malicious links or attachments (56%), impersonation fraud or Business Email Compromise (53%), and malicious insiders (43%). However, it isn’t just email attacks that are on the rise, as 90% of UK businesses experienced at least one spoofing attack that uses a lookalike web domain or a clone of their organisation’s website in the last 12 months. The average UK company has experienced 11 of these attacks.

On top of this, employees are also presenting organisations with a very real threat to their cybersecurity. The survey identifies that IT decision makers have relatively low confidence in their colleagues’ cyber awareness , believing that there is a risk of an employee making a serious security risk due to oversharing company information on social media (84%), poor password hygeine (80%), using personal email (80%), or using cloud storage and other shadow IT functionality (81%). When an employee does full victim to an attack, it frequently results in more widespread consequences. 85% of respondents say threats have spread from one infected user to other members of the organisation.

 

AI to the rescue

To overcome this growing threat landscape, more and more UK organisations are turning to advanced technologies to strengthen their cybersecurity position. The 40% of UK organisations that are already using AI as part of their cybersecurity strategy are already seeing a number of benefits, including increased accuracy in terms of threat detection (54%), reduced human error within cybersecurity team (51%), and reduced workload/working hours for cybersecurity team (45%).

Despite these very real benefits, there is the very real danger that many UK organisations will miss out due to a lack of budget dedicated to cybersecurity. The research highlights a clear discrepancy between the amount IT decision makers believe should be spent on cyber resilience and how much budget is actually allocated by business leaders. IT decision makers in the UK believe that 16% of their IT budget should be allocated to cyber, but at the moment they see less than 12% allocated. Missing out on new technology innovations such as AI is identified as the most likely consequence (49%) for organisations where the cybersecurity budget is not as high as respondents believe it should be.

Elaine Lee, AI expert at Mimecast, said: “There is no doubt that cyberattacks are becoming more frequent, as UK businesses adjust to the world of hybrid work. On top of this increase in frequency, we are also seeing a rise in the sophistication of attacks. This is creating a perfect storm and making it more difficult than ever for organisations to keep their businesses secure. With this in mind, it is no surprise to see so many organisations turn to advanced technologies such as AI to bolster their cybersecurity defences. AI solutions can help businesses to automate security processes, ensuring they are better able to fend off attacks, as well as providing their security experts with more time to focus on high-level analyses that require human interaction.”

Lee continued: “Organisations that have yet to invest in AI technologies as part of their cybersecurity strategy should do so. Cyberattacks are going to continue to be a major threat to UK businesses and these businesses need to respond accordingly with sufficient budget. A successful cyberattack has the potential to cause serious ramifications for a business, including both financial and reputational damage. Now is the time to take this threat seriously and get prepared.”

 

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