Advancing the automation agenda in the banking and insurance sector

Attributed to Scott Hunter

Vice President, Strategic Engagements and Transformation Lead for APJ at UiPath

Over the past few years, automation has been driving the digital transformation journey of many organizations in an ever-dynamic business environment. The IDC APJ Automation Survey 2022, commissioned by UiPath, confirmed that 43% of organizations in the banking and insurance industry will execute automation on an enterprise-wide scale by 2025. Automation offers remarkable scale, business resiliency, and agility, and most organizations in the Asia Pacific and Japan (APJ) region have also been leveraging this technology to become more real-time, personalized, and super-efficient.

In 2022, the average organization from the banking and insurance industry in the APJ region is expected to generate 65% of their revenue from digital products, services, or digitized experiences. As a larger number of organizations embrace the digital-first state, enterprises in the region must elevate their automation mindset and scale to maximize value from such investments.

Outlook of the banking and insurance industry

Customers in the APJ region are fast adopting all things digital, with banks in the region looking to compete against the digital engagement metrics of the world’s best digital and virtual banks. About 54% of the regional banking and insurance firms state that experience and management is a key metric to evaluate the success of automation projects for most organizations.

Although the region is diverse and various markets have varied maturity points, there has been a change in customer interactions as well. We can note an increased focus on real-time, customized, and predictive analytics to improve customer experiences.  Despite the increased digital adoption that puts some of the transaction systems of organizations under duress, the inherent scale of operation that automation brings can accommodate this rise in customer-facing inquiries and related transactions.

The exponential growth in digital transactions, new customer demands, rising security and governance considerations, and the need to deliver scalable services has driven banking and insurance enterprises of all sizes to invest heavily in digital transformation and automation. It is anticipated that twice as many organizations will move to an enterprise-wide deployment of robotic process automation (RPA) by 2025, thus allowing organizations to optimize customer journeys by making them more real-time and personalized. The same IDC report anticipates that 75% of all consumer and small business loans in APJ will originate through AI-enabled and automated processes in the next two years.

The banking and insurance sector is one of the earliest adopters of automation in the APJ region and because of this sustained investment, it has stayed ahead in the maturity curve. Automation improves accuracy in 76% of organizations and an example of this is what South Korea’s National Agricultural Cooperative Federation (NACF) was able to achieve with automation. NACF is a provider of a wide range of business and financial services to 1,400 farmer-owned agricultural cooperative members. Total deposits of the NACF’s member cooperatives exceed US$113 billion, making it the largest financial institution in the country. Leveraging on UiPath and UiPath’s partner TimeGate’s capabilities, NACF’s automation portal develops tasks and distributes automation processes while encouraging their 100,000 employees to suggest automation cases, share results and download software robots. UiPath’s automation solutions support the entire NACF automation lifecycle and the collaborative relationship between robots and people.

ICICI Bank, on the other hand, has automated over 250 processes in 2021 and plans to automate over 500 re-engineered processes by the end of 2022. These automation projects have allowed the bank to achieve improved customer experience, cost savings, agility and scalability to handle volume surges amongst many other benefits.

Role of CIO/CTOs in scaling automation

The shortage of experienced tech workers is also driving change as 38% of organizations in the region are building their future workforce by providing comprehensive training that focuses on reskilling and upskilling. This is where the role of a Chief Technology Officer (CTO) and Chief Information Officer (CIO) is redefined. Traditionally, the functions of CTOs and CIOs were to identify and track emerging IT trends that could improve their company’s products and services and to manage repetitive tasks. However, the pandemic-induced accelerated digital transformation has necessitated that CTOs and CIOs emerge as key drivers of enterprise automation. Due to increased service requests, cyberattacks, and the demand for new digital solutions, IT operation activities have increased significantly. In 33% of organizations in the region, there is a coherent strategy in place with leadership-driven initiatives. In addition, about 63% of firms state that their automation staff is distributed among IT, line of business (LOB), and/or center of excellence (COE).

CIOs and CTOs are key to the implementation of intelligent automation solutions that transform a company’s operational processes, such as infrastructure automation and service management integration, and ensure security compliance to create zero-touch service management capabilities. A recent Morgan Stanley Research report highlighted that IT spending and demand for digital growth and operational efficiencies will continue for the rest of the year. Therefore, CIOs and CTOs must find the balance between growth and efficiency.

The road ahead

Today, automation plays an important role not only in achieving operational efficiency, but also accelerating the digital growth journey of organizations. It allows self-service capabilities for customers and employees and provides a holistic view of the customer journey. By reducing the life cycle of product development, integrating with legacy systems, and creating new value propositions through artificial intelligence and machine learning, automation translates business growth strategies into substantial solutions that can be delivered remotely – all of which are significant benefits that can be reaped in the banking and insurance industry.