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.
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.
- AaaS does not need new infrastructure. Part of its unique quality is the ability to integrate with existing infrastructure and function optimally.
- Banks can leverage the ability of RPA to bridge the gaps between processes. The "availability of essential data in one system allows banks to create faster and better reports for business growth."
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.
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 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.
Case Study #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.
Case Study #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.
Case Study #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.