Intelligent Automation Could Add $512 Billion to the Global Revenues of Financial Services Firms by 2020

A new report from Capgemini’s
Transformation Institute reveals that the financial services
industry could expect to add up to $512bn to global revenues by 2020
through ‘intelligent automation1’, the right
combination of robotics process automation (RPA), artificial
intelligence (AI), and business process optimization applied cohesively
to achieve business objectives. The report, “Growth
in the machine: How financial services can move intelligent automation
from cost play to growth strategy,” demonstrates
the breadth of opportunity for the financial services sector in
embracing these technologies.

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Capgemini Automation in FS Infographic (Photo: Business Wire)

To date, automation technologies, such as RPA, have been implemented by
the financial services industry to drive down costs and create
efficiencies. If RPA is deployed, a business can realize a 10-25 percent
increase in cost savings, potentially scaling to 30-50 percent with
AI-enhanced RPA.2

“A lot of things will happen in automation in the next couple of
years. RPA is just one tool in the toolbox. We will also use AI-based
tools and process optimization techniques for automation in the
financial market,” said Jenny Dahlström, Deputy Head of
Business Support and Development and Head of Robotic Implementation for
Handelsbanken Capital Markets.

Automation can generate revenue

Leaders within the financial services industry have begun taking
automation directly to their customers, using it as a revenue generator
rather than just a cost saver. The Capgemini report found that, on
average, over one-third (35 percent) of financial services firms have
seen a 2-5 percent increase in topline growth from automation, with
faster time-to-market and improved cross-selling efforts as the key
factors that influence gains. Meanwhile, 64 percent of organizations
from across different segments have seen improvement in customer
satisfaction by more than 60 percent through intelligent automation,
according to the report.

With such substantial gains made possible by intelligent automation, it
is not surprising that an increasing number of financial services firms
are considering deploying the technology on the front line. The report
finds that more than half of firms (55 percent) are focused on
increasing customer satisfaction through automation, while close to half
(45 percent) see growing revenue as a key objective.

Adoption of intelligent automation remains low

In addition to the tangible benefits offered by intelligent automation,
the report suggests another reason why financial services organizations
are exploring the technology is the growing threat from non-traditional
players. The study says that nearly half (45 percent) of organizations
believe that BigTech3 players, such as Amazon and Alphabet,
will be their competitors in the next five years.

Despite the clear opportunities and advancing threats posed by BigTech
entrants, adoption of intelligent automation has been slow. Only 10
percent of companies have implemented the technology to scale, with the
majority of firms struggling with business, technology, and people
challenges. The report reveals that only around one in four
organizations has the technological maturity to implement cognitive
automation technologies comprising machine learning, computer vision,
and biometrics. Most organizations still have RPA, or – at best –
Natural Language Processing (NLP), forming the backbone of their
automation initiatives.

Anirban Bose, member of the Group Executive Board and Head of
Capgemini’s Financial Services Global Business Unit said, “The most
visionary financial services firms have leaders with a sophisticated
view of the potential impact automation can have throughout their
business. And they are already reaping the rewards. Hundreds of billions
of dollars in automation-generated revenue is up for grabs in the coming
years. Only those companies that deploy this technology in a way that
looks beyond cost cutting and focuses on creating value for customers
and shareholders will be able to win in the marketplace.”

Making the case for automation

The study finds several factors that are preventing organizations from
moving beyond proof-of-concept to actually deploying intelligent
automation. These challenges span the business organization, technology
infrastructure, and talent. Around four in 10 organizations (43 percent)
are struggling to establish a clear business case for automation. Many
organizations are also struggling to persuade leadership to commit to a
cohesive intelligent automation strategy (41 percent.) Additionally,
successful automation deployment and scaling-up requires talent with a
deep understanding of RPA and AI technologies. Almost half of businesses
(48 percent) say they struggle to find the right resources to implement
intelligent automation effectively. Also, 46 percent said that the lack
of an adequate data management strategy hampers progress as AI-based
automation algorithms require the right data at sufficient volumes.

“In my opinion, the evolution of automation in financial services
will be very similar to the automotive industry revolution in the 70s
and 80s. The role of humans in processes will dramatically change and
focus on things that humans are much better at – in terms of design and
problem solving – and leaving the repetitive rules-based stuff to the
robots. Though it won’t happen in two years, I also know it’s not going
to take 20 years,” said Jose Ordinas Lewis, Head, Robotic
Automation Center for Swiss Re.

A copy of the report can be downloaded here.

Capgemini’s Automation in Financial Services Report Methodology

Capgemini surveyed 1,500 senior executives from 750 global organizations
over the period of February – March 2018. The sectors Capgemini focused
on were retail and commercial banks, capital markets – and life and
non-life insurance. Of the organizations, 42 percent had global revenues
greater than $10 billion. The survey covered organizations from nine
countries – France, Germany, Italy, Netherlands, Spain, Sweden, India,
United Kingdom, and United States.

About Capgemini

A global leader in consulting, technology services and digital
transformation, Capgemini is at the forefront of innovation to address
the entire breadth of clients’ opportunities in the evolving world of
cloud, digital and platforms. Building on its strong 50-year heritage
and deep industry-specific expertise, Capgemini enables organizations to
realize their business ambitions through an array of services from
strategy to operations. Capgemini is driven by the conviction that the
business value of technology comes from and through people. It is a
multicultural company of 200,000 team members in over 40 countries. The
Group reported 2017 global revenues of EUR 12.8 billion.

Visit us at
People matter, results count.

About the Digital Transformation Institute

The Digital Transformation Institute is Capgemini’s in-house think-tank
on all things digital. The Institute publishes research on the impact of
digital technologies on large traditional businesses. The team draws on
the worldwide network of Capgemini experts and works closely with
academic and technology partners. The Institute has dedicated research
centers in India, the United Kingdom, and the United States.

Intelligent automation is defined as the right combination of RPA,
artificial intelligence, and business process optimization applied
cohesively to achieve strategic business objectives. Automation is
defined as using software to handle high volume, repeatable, rule based
tasks which use structured data that previously required a human to
perform.2 Morgan Stanley, “The Rise of the Machines:
Automating the Future, September 24, 2017,
BigTech refers to large multinational technology firms such as Google,
Amazon, Facebook, Apple, and Alibaba.

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