BUILDING A SUSTAINABLE COMPETITIVE ADVANTAGE WITH ROBOTIC PROCESS AUTOMATION IN SWISS BANKING

By Rahul Singh, President – Financial Services, HCL Technologies

Is the Swiss banking industry still the most attractive financial destination in the world? Probably, but it is becoming increasingly clearer that the sector will need to fight to maintain status quo in the face of disruptive innovations, stringent regulations and their impact on the banking landscape.

The past decade has brought in multiple new reforms and regulations to an industry that is already struggling with low interest rates and compromised margins. A recent example is the agreement on the new tax transparency standard, the Automatic Exchange of Information (AEOI) Act, which requires Swiss banks to annually disclose customer details to 38 member states. This number is only expected to increase as agreements with more countries get ratified.

These developments, along with other regulatory reforms that are underway, place a considerable operational burden on the already stressed banking community. The situation is likely to get tougher amid a sea change being brought about by digitisation and the rising pressure from cross-sector competitors. To add to this, the industry’s operational costs are growing at an average 2.2% per annum, owing to massive administration overheads, according to global management consultancy, Oliver Wyman.

But not all is as grim as it seems. While it is true that the compliance operations and mounting costs are taking a heavy toll on the industry, technology promises new opportunities in the form of innovative offerings and efficient banking workflows.

Advancements in artificial intelligence (AI), robotic process automation (RPA), and machine learning are particularly of importance to banks, as they have the potential to significantly improve operating margins. While these technologies themselves are not new, the Swiss banking industry, with its legacy systems and complex operational models, has been sluggish in embracing them.

While Swiss banks have been fairly successful in rolling out several digital offerings recently, they have not been very nimble in upgrading back office operations. But as digitisation grows and regulatory requirements change, banks will need faster, more efficient processes, which legacy systems will be unable to provision. By turning to technologies such as RPA, Swiss banks can pre-empt such a situation and ensure they are more future-ready.

RPA, the use of software to handle high-volume, repeatable tasks to automate almost any activity, can boost the efficiency of a wide variety of back office operations; including regulatory reporting, client statements, and loan processing.

RPA, in addition to automating routine tasks, can also help enterprises reduce their costs by up to 65%, while simultaneously improving the time to complete these tasks. Unlike other technologies, RPA can work right alongside legacy systems, making it highly suitable for the typical legacy environments of Swiss banks’ back offices.

So how can Swiss banks take advantage of RPA to streamline operations? What are some of the best practices? How do you successfully implement RPA? Here are 8 steps to effortless RPA implementation:

1. Understand RPA thoroughly: RPA is not a one-off initiative. Although the technology can be implemented within weeks, its actual benefits start accruing only when you widen its scope and achieve economies of scale.

3. Take stock: Remember that RPA is suitable for automating manual, logically-designed processes that are highly repetitive and time-consuming. Make a list of all such back-office processes.
4. Start with a proof of concept (PoC): Identify one process that is likely to benefit the most with RPA, and build a PoC for it.

4. Partner with a technology specialist: Enlist a competent technology partner who knows the Swiss banking industry well. This will ensure you do not waste any time understanding the complexities involved and prevent you from going back and forth between design and implementation.

6. Roll out the pilot: Narrow down to the right RPA tool for your organisation and roll out a pilot. Ensure you have sufficient data points to measure the performance.
7. Train experts: Train technology consultants internally so they are fully on top of what your business is and needs, so they can help you scale up the RPA implementation once it is proven successful.

7. Consider intelligent automation: Move beyond just RPA and use AI to bring in more benefits. Look at how you can manage the change effected by automation and consider further improvements.

8. Implement end-to-end automation: Together, AI and RPA (along with BPM) can help you automate over 90% of core back office processes.

RPA can completely transform Swiss banking operations to become quicker, efficient, and more reliable; while still enabling a lower total cost of ownership. In today’s consumer-driven market where more and more banking services are getting commoditised, automation has become essential for the banking industry to flourish.

Automation will enable Swiss banks to channel their expertise towards core banking operations and customer services instead of non-core activities. And contrary to popular belief, automation will only create more employment, through more demand for higher-skilled jobs, ultimately proving to be far more beneficial to the whole economy than is evident at first sight.

In other words, RPA is an opportunity Swiss banks cannot afford to miss if they want to sustain their long-envied market position.

By Rahul Singh, President – Financial Services, HCL Technologies

Is the Swiss banking industry still the most attractive financial destination in the world? Probably, but it is becoming increasingly clearer that the sector will need to fight to maintain status quo in the face of disruptive innovations, stringent regulations and their impact on the banking landscape.

The past decade has brought in multiple new reforms and regulations to an industry that is already struggling with low interest rates and compromised margins. A recent example is the agreement on the new tax transparency standard, the Automatic Exchange of Information (AEOI) Act, which requires Swiss banks to annually disclose customer details to 38 member states. This number is only expected to increase as agreements with more countries get ratified.

These developments, along with other regulatory reforms that are underway, place a considerable operational burden on the already stressed banking community. The situation is likely to get tougher amid a sea change being brought about by digitisation and the rising pressure from cross-sector competitors. To add to this, the industry’s operational costs are growing at an average 2.2% per annum, owing to massive administration overheads, according to global management consultancy, Oliver Wyman.

But not all is as grim as it seems. While it is true that the compliance operations and mounting costs are taking a heavy toll on the industry, technology promises new opportunities in the form of innovative offerings and efficient banking workflows.

Advancements in artificial intelligence (AI), robotic process automation (RPA), and machine learning are particularly of importance to banks, as they have the potential to significantly improve operating margins. While these technologies themselves are not new, the Swiss banking industry, with its legacy systems and complex operational models, has been sluggish in embracing them.

While Swiss banks have been fairly successful in rolling out several digital offerings recently, they have not been very nimble in upgrading back office operations. But as digitisation grows and regulatory requirements change, banks will need faster, more efficient processes, which legacy systems will be unable to provision. By turning to technologies such as RPA, Swiss banks can pre-empt such a situation and ensure they are more future-ready.

RPA, the use of software to handle high-volume, repeatable tasks to automate almost any activity, can boost the efficiency of a wide variety of back office operations; including regulatory reporting, client statements, and loan processing.

RPA, in addition to automating routine tasks, can also help enterprises reduce their costs by up to 65%, while simultaneously improving the time to complete these tasks. Unlike other technologies, RPA can work right alongside legacy systems, making it highly suitable for the typical legacy environments of Swiss banks’ back offices.

So how can Swiss banks take advantage of RPA to streamline operations? What are some of the best practices? How do you successfully implement RPA? Here are 8 steps to effortless RPA implementation:

1. Understand RPA thoroughly: RPA is not a one-off initiative. Although the technology can be implemented within weeks, its actual benefits start accruing only when you widen its scope and achieve economies of scale.

3. Take stock: Remember that RPA is suitable for automating manual, logically-designed processes that are highly repetitive and time-consuming. Make a list of all such back-office processes.
4. Start with a proof of concept (PoC): Identify one process that is likely to benefit the most with RPA, and build a PoC for it.

4. Partner with a technology specialist: Enlist a competent technology partner who knows the Swiss banking industry well. This will ensure you do not waste any time understanding the complexities involved and prevent you from going back and forth between design and implementation.

6. Roll out the pilot: Narrow down to the right RPA tool for your organisation and roll out a pilot. Ensure you have sufficient data points to measure the performance.
7. Train experts: Train technology consultants internally so they are fully on top of what your business is and needs, so they can help you scale up the RPA implementation once it is proven successful.

7. Consider intelligent automation: Move beyond just RPA and use AI to bring in more benefits. Look at how you can manage the change effected by automation and consider further improvements.

8. Implement end-to-end automation: Together, AI and RPA (along with BPM) can help you automate over 90% of core back office processes.

RPA can completely transform Swiss banking operations to become quicker, efficient, and more reliable; while still enabling a lower total cost of ownership. In today’s consumer-driven market where more and more banking services are getting commoditised, automation has become essential for the banking industry to flourish.

Automation will enable Swiss banks to channel their expertise towards core banking operations and customer services instead of non-core activities. And contrary to popular belief, automation will only create more employment, through more demand for higher-skilled jobs, ultimately proving to be far more beneficial to the whole economy than is evident at first sight.

In other words, RPA is an opportunity Swiss banks cannot afford to miss if they want to sustain their long-envied market position.