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HOW COVID-19 HAS PROVIDED THE IMPETUS FOR INTELLIGENT AUTOMATION IN THE FINANCE SECTOR

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Chris Porter, CEO, NexBotix

 

There is perhaps no better example of the way in which digital technology has transformed an industry than in the financial services sector. The rise of technology-led challenger brands has forced the well-established financial powerhouses to invest heavily to ensure their products and services meet the demands of a world in which the cheque book and bank branch are fast becoming historical relics.

While the speed of digital transformation has been steadily increasing in pace over the last decade, events of the past year have only served to accelerate the process. Financial services firms have, in parallel with many other sectors, quickly adjusted to the realities of the pandemic – lockdown-dominated populations whose only connections to external services have been electronically driven. As companies have adjusted to the ‘new normal’, they have hurriedly explored ways in which to streamline processes, harness data or shape entirely new ways of doing business.

2020 saw an acceleration in the pace of adoption of digital transformation technologies, particularly in response to the growing consumer use of on-line channels. A survey by McKinsey found that globally, about 55% of products and/or services were fully or partially digitised as of July 2020, compared to 35% in December 2019 and 28% in May 2018.

The findings are supported by those of the latest World Retail Banking Report, which emphasised the extent to which the global pandemic has generated more consumer demand for digital. Over half (57%) of consumers now prefer internet banking, up from 49% pre-COVID-19, and 55% preferring banking mobile apps, compared with 47% previously. Investment in digital transformation to enhance customer experience and drive revenue growth has never been more important.

Chris Porter

A major asset in the transformation process has been automation. According to a survey by Deloitte, 68% of execs have used automation to directly address COVID-19 related problems. The finding is supported by McKinsey, which found that nearly half of 800 executives surveyed have accelerated the adoption of automation “moderately” during the pandemic, and roughly 20% reported “significantly increasing” automation.

Robotic-process automation (RPA) has enjoyed glowing headlines in recent years. The software is capable of handling high volume requests and repetitive tasks, enabling organisations to improve processes and reduce costs while freeing up employees for high value tasks. RPA’s ability to enhance the workflow for time-consuming, high-volume & repeatable tasks means it has been of particular benefit to sectors such as financial services and healthcare.

One of the most commonly reported problems with RPA is scaling, primarily because RPA can only handle structured, rule-based digital processes. Most modern businesses – especially within the finance sector – are full of unstructured data and judgement-based work. As a result, customers exploring how automation can aid transformation are hitting a wall – RPA is failing to deliver on its promised benefits.

Step forward Intelligent Automation (IA) – a combination of artificial intelligence and automation, which is changing the way organisations function in almost every sector.

 

What is ‘Intelligent Automation’?

Intelligent Automation is a term used to describe a group of technologies – including RPA, Artificial Intelligence, machine learning and analytics – that are integrated with each other to automate more complex business processes. On their own, these technologies deliver limited value. When combined, they can unlock significant value and transform the way businesses operate.

Once a process is automated, employees are free to work on more valuable tasks such as revenue generating activities or focusing on work where human judgement is required. Using extra capacity to review a larger sample of cases that have been prepared by the robots can drive increased compliance, reduced risk, reduced error rates, faster resolution times and increased CSAT scores as well as a healthier bottom line.

Intelligent Automation can be used to underpin broader transformation in business by extending the value of legacy IT systems and providing an orchestration layer between human operations and IT centric business processes. Once a business is no longer held hostage by legacy systems, true transformation can take place by focusing on business outcomes rather than operating around the constraints of existing systems.

 

How financial services firms can harness the benefits of Intelligent Automation

Demand for Intelligent Automation within financial services has increased significantly. Understanding which business processes to automate and the type of automation to deploy, or even the extent to which automation can help the organisation, can be challenging without the right expertise. Financial services firms would be wise to consider choosing an external Intelligent Automation specialist which is able to identify the best candidates for automation and provide ongoing Managed Services to make sure the automation solution is efficiently implemented and scaled to meet the demands of the organisation.

 

The most popular use cases for Intelligent Automation in the financial services sector include:

  • Customer Engagement: Consumer demand for efficient and real-time services are driving the need to take an automation-first approach. With increasing volumes of data and emerging channels for accessing such data, market and customer analysis are becoming increasingly important to ensure that the industry is better at driving exceptional customer service. Intelligent Automation and data analytics combined are a powerful way in which organisations can access, analyse and leverage extensive resources (customer databases, social media, etc.) to design financial product tailored to needs and individual requirements.
  • Compliance management and productivity: a critical business function within financial services. However, current business processes often result in large compliance backlogs due to the manual effort and archaic approaches for managing organisational compliance requirements. Intelligent Automation provides a smarter way of working by automating these repetitive and mundane processes (such as data entry between spreadsheets and systems, analysis and reporting), and empowers the human workforce to spend their time and effort on more value-added tasks.
  • Accounting: a paramount requirement within financial services is for strictly accurate and efficient management of those carrying out critical tasks such as accounts reconciliation or preparation of financial statements and reports. Intelligent Automation is being adopted to support the recognised need for process improvement and optimisation, and to eliminate the time-consuming, repetitive and rule-based tasks from the human workforce.

 

There is no doubt that financial services firms which have already begun their Intelligent Automation journeys have a clear competitive advantage over their peers. The ability to pivot faster and allocate resources where they are needed the most has been crucial in the current commercial environment, and will be increasingly important as we move into what we all hope is the post-pandemic world.

 

Finance

Crypto’s tipping point

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Chris George, Senior VP of Product at Somo argues that Crypto needs to improve its scalability to be taken seriously

Cryptocurrencies are no longer the exclusive domain of high risk financiers or tech Bitcoin jockeys, willing to ride a niche and volatile asset for good or ill. Today, neobank and mainstream banking apps alike offer crypto banking, helping them trade in Bitcoin or Ethereum from as little as one dollar(https://www.revolut.com/crypto/).

Indeed, in September 2022, Finbold reported that British citizens had invested nearly £32bn in cryptocurrencies, and additional research from HMRC would have it that one in 10 UK adults has bought crypto, double the number from the previous year. 

But even given the legitimacy lent to crypto by the fact that now 50% of UK banks allow customers to interact with these currencies as well as other digital assets, how can the asset management industry turn it into a significant – and mainstream – asset, particularly in today’s turbulent economic climate? With the collapse of FTX, this must be taken into serious consideration. FTX was sold as being a safe and stable way to trade digital currency, alas this has not been the case. It turns out Sam Bankman-Fried seriously over-promised and dramatically under-delivered, gambling away customer assets and ultimately prioritising fraud and malpractice.

First, we need to acknowledge that not all crypto is created equal. Some, such as Bitcoin or Ethereum, do function as a currency, are limited in volume and therefore can increase and (as 2022 amply showed) decrease in value. But other blockchain-based crypto doesn’t behave like what most people commonly accept as currency at all. 

For there to be significant uptake in crypto as an asset, there is going to have to be a far broader and deeper understanding of what it is and what it can do. As Christophe Diserens, chief compliance officer at SwissBorg has suggested: “Value and useability are going to be key. Metcalfe’s Law has been used to value tech and internet stocks so why not crypto?”. That value took a bit of a beating during the recent sell-off and crypto’s perceived volatility will need to be addressed if it is to achieve scale. Because that’s what it’s going to need if it’s ever going to be considered as a legitimate global payment alternative in the future.

 

The role of The Merge

Not the latest B-movie, sci-fi flick, The Merge in September 2022 saw the world’s second-biggest cryptocurrency, Ethereum, move from a ‘proof of work’ to a ‘proof of stake’ protocol. This was nothing short of seismic. 

Proof of work is how the vast majority of crypto has been mined to date. People solving complex equations to validate transactions (the ‘work’) uses masses of computer processing energy, accounting for a significant slice of the world’s electricity consumption. In today’s climate (in both senses of the word), that’s just not on. 

Proof of stake, on the other hand, relies on far fewer ‘miners’, fewer computers and less energy as a result. This so-called ‘Merge’ is not only expected to reduce worldwide energy consumption by 0.2%, but also boost the crypto economy as a whole, creating more opportunities for investors and allow developers to build more products and applications on Ethereum. Ultimately, it could be what drives the decentralised internet of blockchain, crypto and NFT – Web3 – mainstream. 

What does this mean in the ‘real’ world? This could present a real opportunity for the financial services sector as a whole. It will change the way it operates, speeding up transactions, creating new business models and generally just making the whole thing a more efficient way of working. Fully cashless payments for business would be a real boon, given the costs and potential losses involved in transacting in cash. Digitisation also makes transacting an altogether more intuitive experience. 

One thing crypto and its associated technologies and solutions needs to be wary of is becoming a solution in search of a problem. For a truly mainstream breakthrough, the industry needs to make sure it’s bringing the consumer along on the journey. For end users to be truly confident in crypto, it has to benefit from the same levels of governance and regulation that cover the rest of the financial services industry, building and maintaining consumer confidence will be extremely important as trust levels have been shaken by the recent lack of solid administration and “irresponsible lending practices” leading to the FTX implosion . It has to be simple to transact, but with all the protections that investors have come to expect. It can’t afford to take them on another rollercoaster ride like 2022’s. 

While 50% of the UK’s banks may be getting on board with crypto to some degree, there is still a wide open ocean of opportunity for asset management players to realise value for themselves and their clients. It will involve some reshaping and more investment in digitisation to manage the assets of the future, whatever they may be. 

Somo, part of the CI&T family, will be publishing a report titled ‘Assessing the Crypto Conundrum: Will cryptocurrency ever be a significant trading asset and how can digitalisation shape its future?’ in 2023. 

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Skedadle to change the game for advertising with Currencycloud partnership

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Currencycloud, the experts simplifying business in a multi-currency world, has partnered with Scottish start-up app Skedadle to provide its users an easy, secure and seamless way to transfer money earned in-app while playing games on public transport.

Skedadle rewards travellers for the time they spend playing on-the-go. They can earn £2 per day simply for playing games on the move. That’s an extra £60 in their pocket each month. This can be done thanks to a disruption in the advertising market, by using algorithms to verify and track the users’ engagement with ads, proven to be higher while playing than in traditional online advertising, which increases product and brand recall for advertisers. Thanks to the partnership with Currencycloud, Skedadle users can use the app on public transport and be reassured that all financial transactions and financial data comply with the highest standards of security and validations.

By connecting to Currencycloud’s API technology, Skedadle has been able to integrate in their app a state-of-the-art payments ecosystem that seamlessly bulk settles the money earned from advertisers into a secure account and then processes withdrawals from users fast. At the same time, Currencycloud also sets the infrastructure that will enable them to grow both geographically in the UK and globally, by providing access to 38 currencies and low cost, fast FX rates.

Says Nick Macandrew, CEO and Founder at Skedadle: “Trust and security are crucial, especially when it comes to people’s money. As we rapidly grow our platform, we need a solution that can keep up with our pace and Currencycloud do just that. Our cutting-edge technology requires a secure, stable, and simple way of managing payments, whilst guaranteeing the best user experience possible.”

Nick Cheetham, Chief Revenue Officer at Currencycloud commented: “Backing bold start-ups from day one has always been part of our DNA. Skedadle’s creation of new revenue streams for travellers and advertisers alike is an exciting business endeavour. We are eager to see how the  platform can grow and disrupt the market by integrating our seamless payment capabilities.”

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