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Intelligent automation: creating differentiated value in financial services

Chris Maiato

Principal, EY Bermuda Ltd.; and Regional Consulting Leader, EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands

8 minute read 17 Aug 2021
Related topics
EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands

As a wave of digital disruption transforms the financial services industry, there is no doubt that intelligent automation can help companies deliver clients a wide range of benefits.

In brief

  • Intelligent automation can deliver a multitude of positive outcomes for companies beyond cost and time efficiencies: it is also a differentiated revenue enabler.
  • We foresee that financial services organizations in IFCs (international financial centers) are ripe for disruption, and first movers who successfully deploy customer-centric intelligent automation will significantly stand out from their competitors and likely gain market share.

With advantages including increased productivity, improved accuracy and reduced turnaround time, intelligent automation is known to help a company’s bottom line. However, as organizations across asset management, banking and insurance are challenged by COVID-19, they are also confronted by a multitude of other challenges, including compressed fees, new market entrants, shifting macroeconomics and regulatory changes. Simply managing costs is no longer enough — this is where intelligent automation can play a role. The full value of automation lies in its ability to create differentiation in a highly competitive environment by being a scalable solution and acting as a lever for enhanced customer experience supported by the entire enterprise.

What is intelligent automation?

Intelligent automation is a multifaceted concept. It involves automating end-to-end processes intelligently using the right blend of task automation and knowledge augmentation technologies. Think of it as a spectrum. On one end of the scale is robotic process automation (RPA), which focuses heavily on rule-based tasks that are manual, repetitive and require simple decisions. This work is meant to mimic human behavior. At the other end of the spectrum is AI, which tackles judgment-based work requiring reasoning, an understanding of human language and the ability to extract learning from patterns.

A race against the clock: disruption across countries in the Atlantic and the Caribbean

In international financial centers (IFCs) such as the Bahamas, Bermuda, British Virgin Islands and the Cayman Islands, we have seen an uptick in interest for RPA and intelligent automation solutions from C-suite executives and senior management. However, whether locally headquartered or branches of large multinationals, most organizations have yet to implement automation across their enterprise as part of their digital journey. But time is working against them.

According to Yahoo Finance, a fifth of tech-lagging Fortune 500 companies that struggle to keep up with a digital-first framework will be disrupted in 2021. Alternatively, customer-focused organizations that invest in technology and adaptive strategies as a result will grow their firms up to 3.5 times faster than the average of their peers.[1]

We foresee that financial services organizations in IFCs are ripe for disruption, and first movers who successfully deploy intelligent automation will likely gain substantial market share. Furthermore, we anticipate that organizations in IFCs that focus on using RPA and intelligent automation as enablers to meet changing customer demands will significantly stand out from their competitors.

Shifting customer expectations

With COVID-19 restrictions changing the dynamics of customer interactions, the rapid advancement of new technologies, and millennials and Gen Z making up increasing numbers of consumers, the experience customers are demanding is rapidly shifting. In fact, our data shows that the number one improvement priority for the IT function at corporates is improving customer experience and engagement (40%).[2] Here are a few of the key trending customer expectations that we are seeing across financial sectors in IFCs.

Omnichannel access with personalization

Whether engaging via a website, social media, phone, email or in person, clients are expecting to be at the center of an organization’s omnichannel presence with highly personalized service. In fact, Salesforce’s most recent State of the Connected Customer report reveals that 78% of consumers expect a consistent experience wherever they engage.[3]

The case for change isn’t just with the retail customer. Corporate clients, particularly international businesses with offices in Atlantic or Caribbean-based IFCs, want high-quality services at speed and the robust digital functionality that they get from large multinational financial service providers in global capital cities. The ability for an island-based bank to address this market segment in a peer-differentiated way would enable banks to gain market share from new clients and gain share of business from corporate clients who are double-banked.

Ease and mobility

According to the EY 2019 Global FinTech Adoption Index, 96% of global consumers are aware of at least one money transfer and payment FinTech service, and three out of four global consumers use a money transfer and payments FinTech service.[4] Customers no longer want to stand in line at the bank to cash a check or go into an office to wet-sign documents, all of which is still commonplace in IFCs across the Atlantic and Caribbean region. Most clients would prefer to access accounts and documentation digitally, either online or on their mobile. This trend has been compounded by COVID-19 with new considerations around touchless contact, social distancing and doing business remotely.

Responsiveness and self-service

A study conducted by Lithium Technologies found that, when asking about a product or service, 66% of consumers expect a response to their query on the same day, and over 40% expect a reply within the hour.[5] This echoes the request for responsiveness we are experiencing in the market. Coupled with responsiveness is the ability for customers to self-serve. A consumer survey commissioned by Nuance Enterprises found that 67% of respondents said they preferred self-service over speaking to a customer representative. Additionally, 91% of respondents would use an online knowledge base if it were available and tailored to their needs.[6] The option to self-serve puts clients in the driver’s seat to get the service they want, when they want it.

So, now that we have outlined customer expectations, how can automation be leveraged to make a difference?

How EY can help

Here are some tangible ways a financial services organization can derive benefits across the enterprise and throughout a customer’s journey.

 

Front office

Chatbots can be an effective solution to meet customer expectations regarding responsiveness while also allowing for self-service. The use of chatbots provides customers with 24x7 customer service connectivity, meaning they can access service when they need it. For example, a potential customer has a question about a product or service after normal business hours. A simple, rules-based chatbot could be implemented whereby the bot asks questions and the user clicks on buttons that have pre-defined options. For instance, you write to a chatbot: “I have a problem with logging into my account.” The bot would understand the words “problem,” “logging” and “account” and would provide a pre-defined answer based on these phrases. More sophisticated bots can use machine learning to recognize patterns in service requests and user language and build intelligence over time.

 

Middle office

 

Onboarding new corporate clients can come with a number of legal, compliance and regulatory processes and paperwork. Intelligent automation can ease the burden of doing business and allow for digital flexibility in several ways. For instance, smart forms can be used for client onboarding documentation. Smart forms can be sent via email, embedded in a website or client portal, or even app-based on a mobile phone, offering clients flexibility. The structured data provided in the forms can then be linked directly to an organization’s enterprise resource planning (ERP) system to populate sales, service and financial software, meaning that the client only needs to provide the information once.

 

Back office

 

Financial services organizations are using automation to create streamlined, personalized services to transform traditionally slow, manual processes such as insurance claims. For example, with intelligent automation and computer vision, a homeowner or car driver can take a photo of property damage; send it in through an automated portal; and have the repairs estimated, the claim approved and the check sent all without human interference. This provides a personalized, tech-forward, responsive service for insurance policyholders.


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Summary

Intelligent automation is about more than automation for the sake of automation, and it can deliver a multitude of positive outcomes for stakeholders beyond cost-cutting measures. In fact, intelligent automation is best viewed as a differentiated revenue enabler. As financial services organizations in IFCs look to future-proof their businesses with intelligent automation, it will become necessary for them to use a customer-centric approach in developing and prioritizing their next market strategy. Customer experience will be the next big arena in the race for top-line growth.

About this article

Chris Maiato
Principal, EY Bermuda Ltd.; and Regional Consulting Leader, EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands
Experienced innovator and transformational leader with a passion for business and technology.
Related topics
EY Region of the Bahamas, Bermuda, British Virgin Islands and Cayman Islands

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