Gavin Mee, Managing Director of Northern Europe at UiPath, introduces readers to software robots and explains how the technology can bolster environmental, social and governance initiatives within banking and finance.
This year has only highlighted the growing need for corporate social responsibility. As concerns grow over COVID-19, social inequality, climate change and so forth, regulatory bodies and stakeholder activists alike are ramping up the pressure on financial institutions to implement environmental, social and governance (ESG) initiatives.
On the whole, the sector is realising that true commitment and compliance is a key element to success, with 80 per cent of banks having already made ESG commitments.[i] Several commercial banks, for example, have started to offer sustainability-linked credit facilities to customers. In one case, Brivtic, the soft drinks producer was offered up to £400 million dependent on whether the company can meet various ESG targets.[ii]
However, these initiatives are complex and require huge swathes of data to be regularly processed in order to be successful. For example, if a bank was committed to green financing, it would need to track the clients’ field operations, carbon emissions, supply chain activities, and a score of other variables. Searching for, collecting, processing and reporting back on this data is a huge undertaking which is extremely prone to error. It’s here where software robots can help.
What is a software robot?
Think of a software robot as a colleague who can lend a hand with completing rule-based, repetitive admin. They can control a computer as an employee would, only virtually, reading, extracting and processing data that you’ve taught them to look for.
Using a combination of technologies such as Robotic Process Automation (RPA) and Artificial Intelligence (AI), these software robot can complete data-intensive tasks with ease, more quickly and accurately than an employee could.
This technology is already being used around the world to lighten administrative loads and hand employees back time in their day to focus on value-added work that requires human ingenuity and skill.
How can software robots help with ESG?
As mentioned, ESG initiatives require huge volumes of data to be collected, processed and reported. These are the exact tasks that software robots are best at. The technology can comb through numerous sources of data, extracting the necessary information and reporting it back to colleagues to action as required.
Reporting is one area where software robots are most commonly used in ESG initiatives. Let’s take a bank keen on offering lower rates of interest for green properties, otherwise known as green mortgages. To ensure a property meets the lender’s specifications, additional documentation must be processed. Software robots can sort through this information and report back as to whether the property meets the green standards, providing employees with the information they need, when they need it.
An organisation looking to shape their investment strategies in line with ESG policies is another good example. Software robots can scan through various sources of information such as prospectuses, annual reports and media reports, and consolidate the required information into the necessary format. Portfolio managers can then consult this information to make responsible, purpose driven investment decisions.
Software robots can also be used to relieve the stress on auditing functions. In order for ESG initiatives to be successful, auditing is crucial. However, auditing teams already have enough on their plates without ESG being added to the mix. Therefore software robots can be deployed into the function to assist in sampling, monitoring and assessment.
Alongside assisting with reporting and auditing, the technology can also enact change itself. A business process management firm that provides solutions to the banking and finance sector, for example, is using software robots to digitalise loan documents and to manage customer processes. This has reduced the business’ reliance on paper, thus assisting in their objective to cut waste. Elsewhere, software robots are assisting a Turkish bank in processing requests to postpone loan repayments for customers impacted by COVID-19 in line with the banks new social responsibility initiatives.
As ESG initiatives vary from business to business, so too will be the application of software robots. However, despite the specifics, the running themes throughout these programmes require huge volumes of data to be processed quickly and accurately. Employees can’t pick up all this work alone, nor would it be the best use of skills, software robots on the other hand are designed to handle this exact work with ease.
It’s no surprise, therefore that the technology is proving itself to be an extremely useful tool when transforming ESG objectives into impactful realities. As the importance of corporate social responsibility is only set to grow in the coming years, those organisations that deploy software robots into their processes now will be more prepared for new ESG regulations as they emerge.
