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MANUAL PROCESSES FULLY OPTIMISED? YOU’RE PRIMED FOR AUTOMATION

– By Chris Huff, Chief Strategy Officer, Kofax

 

Imagine this: You’re a bank with a very detailed and precisely executed loan origination process. Since it’s fully optimised and running smoothly, should it be on top of your list for automation? Is there room for improvement?

 

Many businesses scan their organisations and wonder which processes among many are the most appealing candidates for automation. The answer may surprise you. While you might believe the big wins are in fixing inefficient processes, the most immediate gains actually come from applying robotic process automation and intelligent automation to prioritised, well-defined and well-executed processes.

 

Chris Huff

50% of Processes Ready for Automation

 

Many executives might be surprised at how prevalent optimised processes are within their organisation. According to the first-ever Intelligent Automation benchmarking survey conducted by Forbes Insight and Kofax, most companies say their processes are prioritised and well-executed. Almost one-third claimed that all of their processes were optimised to achieve their goals, while another half said that most were optimised.

 

The McKinsey Institute has even pegged the amount of menial work ripe for automation at 50%. And yet, Max Cheprasov, Chief Automation Officer at Dentsu Aegis, says he believes 75% of his firm’s rote tasks are candidates.

 

These observations align with findings in our survey. There is a broad opportunity for intelligent automation within the enterprise. More than three-quarters of survey respondents said that 60% or more of process work could be automated, and almost one in five said that 80% or more could be automated.

 

This shouldn’t come as a surprise. After all, there are usually multiple, complex, legacy processes supporting just about every business objective. Some are simple – such as filing new customer orders or setting up invoices – while others are more complex, like loan originations.

 

The Upside of Automation

 Although many organisations have optimised their processes through experience, research and/or trial and error, there may still lie opportunity to realise further improvement via automation. The next wave of productivity lies in leveraging intelligent automation to converge the digital (automation) and physical workforces into a collaboratively run machine to ‘work like tomorrow’. Companies that ‘work like tomorrow’ realise benefits such as enhanced service levels, reduced operational costs and increased productivity as a byproduct of leveraging automation to increase organisational capacity and empower the physical workforce.

 

Organisations stand to gain in numerous ways from applying RPA and intelligent automation to repetitive, manual tasks. These technologies eliminate errors, cut processing times by half, deliver 100% accuracy, and increase capacity by as much as 50%. Perhaps even more importantly, automation relieves employees of tedious tasks and enables them to focus on value-added activities that require a human touch.

 

Further, using automation to improve the quality of products and services has a direct effect on the bottom line. In banks, for instance, the loan application process mentioned above is usually highly defined. When financial institutions deploy robots to handle tasks such as assessing property valuation and consumer data, they reduce processing time.

 

That’s exactly the experience Western Australia’s P&N Bank had when it put bots to work in the home loan process. Two bots extract required lending data and order valuation reports. Another two assess the information, upload it to the bank’s core lending platform and progress the deal. The result? The bank now processes its annual lending volumes with 11% less human effort.

 

When forward-thinking organisations such as P&N Bank harness the power of intelligent automation operationally and strategically, they deliver higher customer and employee satisfaction and competitive differentiation. These outcomes aren’t simply good talking points. They lead to real, tangible benefits, including higher revenue and deeper profit margins.

 

Where to Start?

The first step toward automation is to identify processes that are the strongest candidates for RPA and intelligent automation. According to the benchmark survey, the five most frequently automated processes were quality control (43% of executives), technology enhancement (42%), financial transactions/reporting (35%), customer experience (32%), and delivery of products and services (32%). Thus, it makes sense to start your evaluation in these areas.

 

Further, most executives said their processes were executed in a precise and consistent manner. In fact, 68% indicated that their process execution is either somewhat or very detailed, and 75% remarked that their processes are either consistently or very consistently executed. These findings indicate that – similar to these organisations – you’re likely to discover dozens of processes in the above areas that are excellent candidates for RPA and intelligent automation.

Once business users have strategically identified how and where to apply these technologies, they can take steps to prioritise which to automate first. This is the next wave of productivity, and organisations that move quickly to embrace RPA and intelligent automation across their optimised processes will set themselves up for competitive advantage and success in the digital age. The time to work like tomorrow is here.

 

 

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THE EVOLUTION OF THE TECH CFO

CFO

Gavin Fallon,General Manager, UK, Nordics & South Africa Board International

 

Chief Financial Officers (CFOs) have traditionally been seen as behind the technological curve – the luddite of the boardroom, too attached to their Excel spreadsheets to move with the times. But the role of the CFO is now shifting and becoming more strategically significant to the business, putting them in the ideal situation to make much needed changes in the boardroom.

Despite many business functions being transformed by data, the boardroom remains a place where paper presentations are annotated around the table and, when it comes to finance, the focus is placed on the traditional statutory profit and loss structure. This may remain useful for reviewing historical performance but provides no insight into what may happen in the future. As global events – from political upheaval to health crises – have an impact on organisations, the ability to react in real-time becomes more important than ever. It is here that CFOs have the opportunity to make seismic changes in their business.

 

Gavin Fallon

CFOs now sit in a unique position

CFOs now sit in a unique position, where the traditional responsibility of keeping an eye on the bottom line is wrapped with analytical and operational knowledge to create a far more strategic role. It is by sitting at this unique crossroads and holding a huge amount of knowledge about every area of the organisation that CFOs have the potential to change many aspects of how the boardroom operates. However, in order to fully realise the potential, CFOs must be empowered to take a digital lead.

A lot of the CFO’s most important work takes place on Excel and Essbase, systems that remain rife with risk. In fact, 56 percent of finance professionals believe the spreadsheets they use in their reporting processes are well-controlled and error free, which may well be why 40 percent also believe their reporting is based on potentially inaccurate information (FSN 2018). Not only prone to human error, spreadsheets are also static and do not allow for real-time forecasting or modelling. While CFOs are well aware of this challenge, the fact they have for too long been tied to legacy systems has led to an unintentional knowledge gap about the technology available to enable them to move away from making decisions based on what happened last year, quarter or week.

 

Seeing the bigger picture

With a greater understanding of the technology available comes an evolution and expansion of the CFO’s role within a business. It is no longer enough to make decisions based on static reporting, focusing on the traditional statutory profit and loss structure. Instead they need to use the tools available to play a strategic role with a keener eye on the future, seeing the bigger picture, anticipating what is next, and having the correct contingency plans in place to mitigate risk.

Technology can provide CFOs with full visibility of the entire company at a single glance, with data at their fingertips enabling them to take into account everything from KPIs to operations, distilling instant insights. This offers a level of clarify that means the answer to ‘what happened’ is obvious, allowing for more attention to be placed on ‘what will happen?’.

Consider a board meeting that is discussing headcount requirements based on the launch of a new product. Using traditional methods, a business may well make presumptions based on experiences when previous launches took place. But since that time, there is likely to have been a whole host of changes, both within the company itself as well as in the wider market – from market conditions for the product to the salary expectations of potential recruits.

The use of such technology, however, does not solely require the buy-in from the CFO, or even the finance function. To fully realise its potential in fundamentally changing how an organisation operates, the value will need to be seen by the entire board to, in effect, create a digital boardroom. While such technology has an impact on all areas of the business, allowing senior leadership to understand the impact of a factory in the supply chain closing, for example, it is the finance function that is best placed to show the value and drive adoption.

 

Primed to integrate the business like never before

The CFO is becoming more strategically important, combining analytical, operational and strategic value into a single role. They are primed to integrate the business like never before, acting as the central thread that ties all aspects of decision-making together in a single, unified process. To do so, requires a radical transformation of their role, as the pioneers of new technology. Already a trusted advisor, CFOs can now elevate their role with the ability to effectively forecast and help spearhead the organisational culture change that is required for the shift in mindset that comes with such digital transformation. To maximise the potential of this unique position, the CFO must be equipped with the technology that provides them with the full visibility of the company and clarity in decision-making they require.

 

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Banking

ADAPT OR LOSE – THE BANKING OF 2030

BANKING

By Frank Zhou, CEO & Founder of Zeux

 

Fintech, the world over, is rapidly expanding with the global value of fintech deals last year coming in at $53.3 billion. It’s no news that this continued growth can – at least, in part – be attributed to a shift in the financial industry’s mindset to allow and facilitate the integration of digital tools, such as online banking and mobile apps, to help improve the customer experience. But the rate of integration and adoption differs vastly, from continent to continent. So what makes a mindset towards innovation choose ‘caution’ over ‘audacity’ when it comes to the world of fintech, and how are these different approaches shaping the future of the financial landscape? Frank Zhou, CEO and founder of Zeux, shares his insight on the future of banking.

 

Asia is wearing the fintech crown

Financial innovation and the adoption of fintech in Europe has been slow compared to Asia who has been more open to moving away from traditional banking methods. China is the largest alternative lending market holding around 90% of market share, with the US coming in second place.  Together, they dominate 95% of the market. Although the UK is ranked third, the market share is only expected to peak at a value of $4.8bn this year compared to China’s $265.7bn.

BANKING

Frank Zhou

At the head of the pack, Chinese investors are similarly quick to put their weight behind fintech start-ups as they seek to improve the operations of their banks and financial institutions. This forward-thinking approach has brought about the adoption of new-gen technology such as AI and Machine Learning to solve serious finance-relevant issues such as assessing risk and identifying fraud.

The US has demonstrated strong commitment towards adopting new digital technology as well. According to Ryan Battles, EY’s Banking and Capital Markets Lead for the Americas, “banking is finally starting to catch the wave that began with Apple and Amazon raising consumer expectations”.

 

Europe is only catching up with the Silicon Valley mentality

Europe’s fragmented nature – shaped so by its multi-languages, laws and cultures – pushes boundaries in the way of large scale business decisions. And rather than tackle the international markets, an often go-to European approach is to concentrate on developing business within Europe itself.

The Silicon Valley approach of ‘blitzscaling’, a phrase coined by LinkedIn Co-Founder Reid Hoffman, involves scaling at all costs including “doing things that don’t scale” and making deliberate choices without having all of the information—sacrificing efficiency for speed. There are clear risks involved by adopting this method of favouring quick growth on a global scale, but the results can be ground-breaking: think PayPal.

Europe may not have the tech titans that the US or Asia boast, despite having a strong industrial base, but in a ‘hare and tortoise’ style setting, has the potential to become the global fintech frontrunner, because where Europe can truy flex its muscle is in its regulatory prowess when it comes to AI. As with the rollout of GDPR in 2018, Europe wants to be identified as not just a true regulatory superpower but also as a tech superpower. The latest European initiative is to regulate AI through an ‘ecosystem of excellence’ and an ‘ecosystem of trust’. This new legislation will focus on AI applications that are deemed as high risk. Because as we know, Europe is, on the whole, risk averse.

At the same time, the UK itself continues to attract by far the largest share of fintech investment in Europe, with 83% of all European 2019  fintech investment, states Augmentum Fintech.

 

Bright future for the UK: Embracing the power of crypto

With the latest figures predicting traditional British banks could lose a further £8bn of revenue in the next five years, it’s no wonder there’s been an – albeit slow – shift to adopt tech-powered solutions in order to compete against trailblazer challengers such as Monzo and Revolut. Among the line-up of traditional banks that are rolling out new products are Santander and RBS, both of which are evolving the way they facilitate payments and transfers of funds.

Aside from these relatively ‘standard’ innovation developments around payment technology – that are more evolutionary than revolutionary – what else could help the financial sector catch up to its industry counterparts and drive real change? Does crypto really have a place? And how safe is it?

The US is embracing cryptocurrency as a safe digital currency because it trusts the technology behind it. Blockchain technology is an advanced way of logging and protecting data, which is difficult to manipulate or hack. It has the potential to improve security, productivity and customer experience when adopted by businesses in the financial sector. In spite of the bad press it receives, blockchain technology has been recognised as an emerging technology that could transform the banking sector due to the ability to improve trust, provide transparency and potentially lower costs, reduce transaction times and improve cash flow.

At the beginning of the year, even the Bank of England announced that it would consider adopting a bitcoin style digital currency as part of a global group of central banks. And that’s a big step.

Major financial markets around the world are still ahead of European and British banks when it comes to fintech innovation. AI and blockchain technologies are still in their relative infancies, and the pace of change and innovation is only going to gather even more momentum. Those who have made the smart decision to adopt, will reap the benefits that are to come. So, it’s more important than ever for the cautious approach that the British banking industry has demonstrated for so long to be replaced with a new, fresh hunger to harness digital technologies. Not only to guarantee growth, but also to remain competitive in a global market.

Innovation breeds innovation, it breaks through traditional models, and brings new opportunities to the table. The UK’s banks need to be smart with their next move and pull up a chair.

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