Appian Automation Maturity Index.
Research Report Part 2.
Written in collaboration with Longitude,
A Financial Times company.
The People In The Process
How top financial services firms use automation to boost employee morale and customer retention.
What kind of benefits should financial services firms get from their automation investments? Cost savings? Improved efficiency? These are what first come to mind for many people. But companies with more mature automation capabilities also secure a much wider range of gains.
A key goal of the Appian Automation Maturity Index research program is to shine a spotlight on the enterprise-wide impact of modern automation capabilities. In this, the second in a three-part series, we find out how the best-performing firms are using automation to improve their agility and create better experiences for customers and employees.
Pretend, for a moment, that you are the head of client services at a large bank. Your vision for your career involves building teams that quickly resolve issues, delight customers, and improve retention.
But your team cannot solve problems quickly, because they do not have a complete view of client histories, accounts, and activity. Calls are frequently passed back and forth between different areas, forcing clients to repeat their requests. Every call includes multiple apologies. Client retention is low and falling, as rival banks improve their services.
What would you do? If you are talented and ambitious, you would probably be looking for an opportunity to join one of those rival banks. Perhaps a bank that has integrated more than 60 core banking systems to provide all of its call center agents with a live, 360-degree view of client information and accounts, while developing automated, self-service options for many common activities.
That bank — based on a real example — would empower you to achieve your career goals; your current bank obstructs them.
Transformation Through Automation
In this example, the rival bank has used a unifying workflow platform to maximize the strengths of robotic process automation (RPA), artificial intelligence (AI), and human talents. The repetitive and mundane parts of customer journeys are fully automated, and call center agents are devoted to solving complex issues, innovating, and building stronger client relationships.
This type of model is an example of what automation now represents for modern financial services organizations: it has moved beyond simple cost savings. This remains a key benefit, but it is one of many, including the ability to deliver significant improvements for customers and employees while enhancing the management of risk, compliance, data, change, and business strategy.
Banks and asset managers around the world are at various stages of development towards automation maturity. This report is part of a research program designed to better understand these stages and the future direction of automation in financial services.
In our survey of senior executives from all corners of the banking and asset management industries we can see several important trends evolving, with urgent implications for industry leaders. (See “Research Methodology” for full details of the survey sample.)
To highlight these trends, we have analyzed the survey results for three distinct groups:
Leaders: Respondents who say their organization is an industry leader in automation, including innovative and/or sophisticated automation solutions (20% of the sample).
Laggards: Respondents who say that most of their organization’s automation efforts/investments have failed to add value (15% of the sample).
Mainstream: Respondents who did not fall into either the Leader or Laggard groups (65% of the sample).
The Fast and the Flexible
There are large, important differences between these three groups — differences that extend across a broad range of organizational attributes and capabilities.
For example, the Leaders have significantly faster and more agile operational processes. More than eight in 10 are ahead (either “far ahead,” or “a bit ahead”) of their strongest rivals in terms of their speed of response to errors or faults, compared with just 20% of the Mainstream respondents and 3% of the Laggards. A similar pattern emerged when we asked about seamless responses to regulatory changes that necessitate new processes, with a major gulf between the automation Leaders and the other two groups.
Speed and agility have been crucial in the global pandemic, as banks in many countries were tasked with administering huge government-backed emergency loans and refinancing schemes, while simultaneously adapting to remote operations and heavier reliance on digital systems and services.
Speed of response to errors or faults, relative to strongest rivals.
Seamless responses to regulatory changes that necessitate new processes, relative to strongest rivals.
Outcome First, Technology Second
As our opening example highlights, the benefits of automation go far beyond cost savings. Mature organizations in particular are realizing significant gains for customers and employees.
Taking customers first, our survey shows that the Leaders are almost universally responsive to customer demand, and offer industry-leading customer experience and highly customized services. They have a significant edge over the Mainstream on these measures, while the Laggards are a long way behind.
The automation of customer journeys can help deliver the benefits customers are looking for, such as mobile services, instant credit decisions, and quicker delivery of services.
Stuart Duncan Partner at NextWave Consulting
Leaders provide both responsive and customized customer experiences.
“I think customer experience is a massive driver of automation investment,” says Stuart Duncan, Partner at NextWave Consulting, which is an advisor to some of the world’s largest banks, asset managers, and fintechs. “This is particularly the case for retail banks, where the automation of customer journeys can help deliver the benefits customers are looking for, such as mobile services, instant credit decisions, and quicker delivery of services.”
Firms with a mature automation capability are continuously adding these new benefits for their customers. At Ally, a digital financial-services company with a major US automotive finance business, for example, customers can redefine the terms of a loan online. “You can just log in, accept terms and have your loan rewritten without talking to anyone, which removes the hesitancy people can feel when calling in and explaining their circumstances around a loan modification,” says Sathish Muthukrishnan, Ally’s Chief Information, Data, and Digital Officer. “That is adding real value for people, and it is something that supports our customer-first approach; driving our retention rate north of 90%.”
Meaningful Work Over Mindless Work
For employees, the benefits of automation are equally significant. Financial services companies have historically included a plethora of mundane, repetitive tasks that need completion with high speed and accuracy.
Automation has long been seen as a way to free employees from these tasks, so they can pursue more stimulating and rewarding work. Over the past few years, that promise has finally become a reality for many in the industry.
One example of this is in compliance, where most financial services firms need to comply with anti-money laundering (AML) regulations. “Over 90% of AML cases are false negatives, because there are a tremendous number of triggers,” says Muthukrishnan. “But they all need to be checked, and typically that means accessing multiple systems to collect the data needed to make a decision. As a first step in this space, we are automating the process of pulling that data together onto one screen. This makes our case analysts much more efficient.”
Not only are these case analysts more efficient, they also spend more time doing the part of their job that suits human minds — making nuanced judgments — and less time on the robotic task of querying several databases. In one move, this improves both job satisfaction and productivity.
The Laggard organizations in our survey still rely on humans to complete dozens of tasks that are far better suited to mindless bots and other automated approaches. Six in 10 say that many of their people have jobs that involve spending large amounts of time completing dull, repetitive, manual processing tasks. Only 2% of the Leaders, and a quarter (24%) of the Mainstream, say the same.
The automation of mundane processes has freed employees to innovate and work on more complex problems.
Before really engaging in automation, we have to carefully explain why we are doing things and what our project means for individuals.
Jean-Philippe Gerbi Managing Director, Chief Information Officer, Americas, Crédit Agricole
The Value of Transparent Strategy
At some organizations, employees still see automation more as of a threat than as something that can improve their working lives. This means firms have to have an open and transparent automation strategy.
“Before really engaging in automation, we have to carefully explain why we are doing things and what our project means for individuals,” says Jean-Philippe Gerbi, Managing Director, Chief Information Officer, Americas at Crédit Agricole. “But in general, people can see the benefits to them — with RPA, for example — in terms of being able to process more volume, which releases pressure and allows them to acquire skills, evolve their contribution to the wider business, and do more qualitative and analytical activities. We need to explain that this automation is not aimed to replace them but will allow them to do more meaningful work.”
In Part 1 of this series, we explore the recent surge of automation maturity in the financial services, the strategies that define leading firms, and how automation excellence supports significant competitive advantages.
In Part 3, we explore some of the hallmarks of firms with mature automation capabilities, including the future foundations of automation excellence, and the impact of unifying workflow platforms, low code, and AI.
Go to our interactive benchmarking tool to see how your own organization compares against leading organizations on the Appian Automation Maturity Index.
This research program has been produced by Appian in collaboration with Longitude, a Financial Times company.
We surveyed 500 senior banking and asset management executives from around the world about the drivers, challenges, and opportunities on the path to automation maturity.
The results underpin the Appian Automation Maturity Index, which is designed to help financial services firms assess their progress towards automation excellence.
You can use our interactive tool to benchmark your own organisation.
The 500 respondents were from nine countries, four sub-industries, three levels of seniority, and a wide range of company sizes. They spanned both technology- and business-focused professionals, including those involved in management, strategy, operations, BPM, finance, IT, data science, sales, risk, legal, regulatory, and specialist automation roles. To qualify for the survey, respondents must have made some specific investments in automation.