AUTOMATION AS A SERVICE (AaaS) OVERVIEW, INSIGHTS, CASE STUDIES AND HOW IT RELATES TO THE BANKING SECTOR

AUTOMATION AS A SERVICE (AaaS) OVERVIEW, INSIGHTS, CASE STUDIES AND HOW IT RELATES TO THE BANKING SECTOR

Automation as a Service – Overview

Setting up Automation as a Service (AaaS) requires structuring inputs, training, and governance. The steps require a proper assessment before implementation. Benefits involved in creating AaaS include scalability and availability.

Set-Up Requirements for AaaS

  • Robotic Process Automation (RPA) is a special kind of Automation as a Service (AaaS) enabled by the Internet of Things. This is a common form of AaaS in the banking sector. Through enhancing efficiency and cost optimization, the RPA in banking is expected to grow to about $2.9 billion by 2022.
  • RPA is a “comprehensive process that requires structuring inputs, training, and governance.” However, the RPA is said to take over these processes once the setup is complete.
  • According to Deloitte, there is a 6-step process towards the automation adoption journey for banks, including current state assessment, identifying automation targets, and completing a pilot program.
  • It is required that banks understand their pain points, such as the steps that take the most time and cost the most. Once the pain points are identified, the next requirement is to identify the steps to automate first. This is mostly marked by complexity.
  • Selecting the right technology and a pilot program is necessary because it allows the bank to understand the automated process and its feelings. It is also required to start small. After completing a pilot program, implementation can begin in phases, and automation activities can be scaled up with time.
  • Additionally, there are attributes to be considered when implementing the RPA; they include — constraints that might obstruct the process, relevance, and sensitivity of the process.

Ways to successful implementation of RPAs

Benefits of AaaS

  • With Robotic Process Automation, banks are allowed more freedom to focus on innovative ways to improve their business. Furthermore, RPA provides proper management of high volume tasks during peak hours.
  • Time and cost are crucial factors for operation in financial institutions, and the RPA is said to save about 25% to 50% of that. Additionally, the operational efficiency of banks is also positively affected. Banks such as “HDFC and ICICI are using RPA to bring down process execution time by around 60%. RPA is disrupting the way banks are operating, and the adoption will increase with the CAGR of 65%.”
  • With faster implementation and availability, robots work round the clock to complete tasks.

Benefits of RPA in banks Drawbacks of AaaS

  • RPA successes are dependent on people management. The RPA process’s ability to replace mundane tasks is also seen as an increased probability of unemployment. Employees do not need to feel threatened about their jobs being automated.
  • According to “Derek Miers — a senior director analyst overseeing Gartner’s Magic Quadrant for RPA software stated: the RPA software is not magical or intelligent.” Miers claims that RPA tools are just like any other tool, “ultimately, a collection of scripts that will clog the environment if users are not careful.”
  • Miers explained that RPA “bots” are tailored towards a specific interface, and an update or upgrade in systems/applications lead to failed processes and incorrect data. Furthermore, flawed processes must not be automated, “processes that are unstable or prone to change are not good candidates for automation.”
  • The complexity of implementation is evident. Research suggests that about 30% to 50% of RPA projects initially fail. Also, Robotic Process Automation still involves human supervision and IT involvement.
  • Furthermore, parameters for the impact of RPA are not adequately defined, making it difficult to measure the impact of RPA.

Research Strategy

To provide insights into Automation as a Service (AaaS), we scoured through relevant industry databases, reports, publications, and news sites. We were hoping to provide insights on the requirements for setting up AaaS and the benefits vs. drawbacks of AaaS. This search method was successful because we were able to provide the information needed. During our search, the research team discovered that the most common form of AaaS for the banking industry is the Robotics Process Automation, and our search was directed in that line.

CASE STUDIES SHOWCASING BENEFITS OF AUTOMATION AS A SERVICE

Case studies showcasing Automation as a Service involves speeding training, slashing errors, and improving customer service. In the banking industry, the AaaS operational areas include ACH, wires, and large volumes of data.

1. Speeding Training and Slashing Errors

  • The RPA was implemented by the SunTrust Bank in “payment-operation areas such as consumer bank cards, wires, and ACH.” The primary aim of this implementation was to slash errors and speed up activities.
  • To successfully deploy the RPA technology, SunTrust formed a group within its IT department, and this development led to the improved average transaction speed by 3.8 times. Additionally, the bank’s “average training time improved 4 times, and an impressive 65% reduced in the average error rate.”
  • Some other areas in which the bank is planning on expanding its RPA integration include wholesale lending, mortgages, and treasury implementations.
  • According to the company’s annual report, the bank is taking significant steps towards investing in “various automation forms, including robotics.” The goal is to improve effectiveness and direct its employees’ focus to “higher value-added work.”
  • SunTrust Bank has about 21 professionals with RPA experience and $205.96 billion in total assets. The bank has its headquarters in Atlanta.

2. Management of Newly Acquired Branches

  • CB&S Bank leveraged AaaS from the Foxtrot robotic process company, EnableSoft. It was used to move “large volumes of data to its core banking system.”
  • The bank was challenged to find an efficient solution to moving an additional 20,000 accounts and 2,500 loans to its core system. The bank then leveraged EnableSoft’s RPA software; this allowed for an automation process daily, weekly, and monthly.
  • Results include the “loading and funding of 25 to 40 lines of credit, close and addendums to 40 to 50 accounts per week.”
  • Using the RPA, CB&S Bank reduced the time involved in processing credit and addenda lines from 3 hours to 1 hour. Additionally, the software company claims to have saved the bank about “900 employee hours over 1 year.”
  • CB&S Bank reports over $1.6 billion in assets and operates over 50 branches in Alabama, Mississippi, and Tennessee.

3. How Robots Help Serve and Protect the Bank

  • Bank of America leverages the AaaS from PegaSystems and deployed 22 robots to protect the bank, increasing efficiency, and improving customer service.
  • The core areas prioritized were — customer servicing operations, regulatory compliance, and foreign money transactions.
  • Ideation to implementation took about 18 months, and the results showed improved consistency, accuracy, and the speed of automated processes. The Automation operational process produced a cost savings of $100,000 per code request and $350,000 per code change.
  • Furthermore, RPA deployment by the bank “has reduced manually worked exceptions by 95% and aged exceptions of more than 15 days by 70%.” Customer service time was also reduced by 10% to 15%.
  • In 2018, the Bank of America recorded about 2.4 trillion in assets and operated in all states across the US.
  • Other organizations using RPA to improve customer operations include Walgreens and Key bank.

Case study of Bank of America

4. Great Growth in Banking Sector

  • The banking, financial services, and insurance (BFSI) category have witnessed the greatest implementation of automation as a service. This technology has played a critical role in processes such as “customer service, compliance, invoice digitization, credit card approval, mortgage processing, detection of fraud, know your customer (KYC) processing, updating ledger, report build-up, and account closing process.”
  • The APAC region is forecast to have the highest amounts of AaaS implementations generating a forecast revenue of $2,444.9 million by 2023.
  • Key players in the AaaS market include “NICE Ltd., Kofax Inc., Automation Anywhere Inc., Micro Focus International plc, and Blue Prism Ltd.
  • In 2017, North America had a 40% share of this market in the BFSI category.

5. AaaS Infrastructure

  • IoT devices will play a great role in AaaS because of the massive flow of data. The more data is available, the greater the extent of automation, providing greater value for both the customer and the company. This also ensures that managing AaaS is easier and more practical.
  • Although the previous research focused on RPA (Robotic Process Automation), this research has revealed that AaaS is sometimes combined with RPA to improve the management of business processes.
  • As automation is widely implemented, a constantly increasing number of companies are implementing it. However, many are still wondering how to do so successfully. A critical component of here is focusing on the client. A customer-centric platform will be of higher value to the company and the process. Companies should also educate/train their employees as would be required. According to a survey, only 44% are planning to do so.

6. Accelerated Service Delivery

  • Implementing AaaS means that services can be delivered much faster to clients/customers. It eliminates the burden of manual processing and requests. Although automation has already begun across industries and in big and small companies, AaaS comes in as a package. One has the option of scaling up and will only need to pay for what they use. This consumption-oriented model presents options such as monthly payments and level of complexity, based on the company processes and requirements.
  • AaaS plays a critical in enhancing “innovation, increasing agility, and reducing operational complexity.” As ML and AI are increasingly implemented, AaaS plays a great role in optimizing these technologies in order to enhance growth. Just as in automation, AaaS optimizes the company’s performance, it enhances relationships with customers, and it reduces risk by enhancing accuracy.
  • The following chart/table provides an overview of the analysis before implementing AaaS.

This table provides an overview of how a company decides to implement AaaS.

The table below provides an overview of how ti implement AaaS.

Automation as a Service: Case Studies

Research into Automation-as-a-Service (AaaS) reveals that it is currently being combined with Robotic Process Automation (RPA) and Business Process Automation (BPA) redefining how company processes are managed, solved, and delivered. This is why the previous report focused on these aspects as a proxy. To provide a more comprehensive approach, this research has identified key players in AaaS and identified their customers that are in the banking sector. The following report provides an overview of a case study and additional insights that would be beneficial to this research.

Case Study: Kofax and TD Bank

  • Kofax and TD Bank came together to create a mobile mortgage loan on-boarding process.
  • According to Mark Hakime, the Senior Enterprise Architect at TD bank, Kofax has offered them a unique solution that has reduced their time to market. By reading through electronic streams from vendors and partners and taking it through Kofax, the company has been able to establish a centralized service. It also provides an opportunity to correct and deliver to business processes. This means that the processes can be refined over time.
  • By moving to a decentralized approach, the system has now become a remote capture effort whereby the mobile mortgage sales force will go around to people’s homes and scan in the documents. This enhances customer engagement/connection by offering convenience.

AaaS: What It Is and How It Is Set Up

  • Over the years, companies have been automating some of their processes. However, this is different from Automation-as-a-Service software and solutions. AaaS is a plug-and-play model whereby companies such as Blue Prism Ltd can offer these solutions. As the requirements would vary, it is critical that the customer clearly defines the process that needs automation.
  • In the case of Blue Prism Ltd, the company has a partner ecosystem that provides solutions that would be the right fit for different sectors. The partners that serve the banking sector include Virtusa Corporation, WonderBotz, and Advansys ESC.

Various industries are adopting automation-as-a-service to streamline their workflows and automate the repetitive tasks, significantly increasing the productivity of the businesses.

  • According to the same report referenced above, AaaS is key in controlling and monitoring interfaces so that there is a seamless flow of information. The banking, financial services, and insurance sector has several processes that need to work in harmony. These solutions have the capacity to fix bottlenecks, ensure seamless execution, and ensure a smooth workflow. It also ensures accuracy and efficiency and also support regulatory and compliance reporting.
  • If one would require an AaaS solution, companies/organizations can get in touch with any of the players in this industry: “Automation Anywhere, Inc. (US), Blue Prism Group plc (UK), International Business Machines Corporation (US), Microsoft Corporation (US), UiPath (US), HCL Technologies Limited (India), Hewlett Packard Enterprise Development LP (US), Kofax Inc. (US), NICE Ltd. (Israel), and Pegasystems Inc.(US).

Research Strategy

After thorough research through industry reports, publications, company blogs, and media sites, our research team was able to provide this report. Our analysis was conducted across the websites/blogs/news releases of some key players, their customers in the banking sectors, and reports on the overall AaaS industry. The findings in this research are the highlights from some of these sources. We have also provided a brief summary as to why the previous research focused on RPAs instead of AaaS. It is evident that companies that offer AaaS solutions also provide RPA solutions. As a result, an analysis of the customers would only build case studies that would have RPA implementation. For this reason, we have provided one case study that we feel fits the criteria best.

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