Robotic process automation (RPA) has been around for a few years now. The KPMG report Hong Kong’s Automated Future: An RPA Guide for Finance Functions noted that the city’s banking and finance sector leads in adoption of RPA. But while the adoption rate is promising (from 20% to 38%), overall Hong Kong is behind other markets like Singapore, USA, and the UK.
New data from Juniper Research has found that RPA revenues in banking will reach US$1.2 billion by 2023. With an estimated revenue above US$200 million in 2018, this represents a growth of over 400% over the period.
Juniper’s new research, Banking Automation & Roboadvisors: Vendor Positioning, Strategies & Forecasts 2019-2023, found that when combined with Artificial Intelligence (AI), RPA can considerably lower compliance costs, raise productivity, and improve customer experience.
Size does not matter
Juniper’s survey of 20 leading RPA vendors revealed that size does not determine who has the most advanced solution. It identified Kryon Systems as leading the pack ahead of EdgeVerve, Nice, Pegasystems, and Kofax Kapow, citing the company’s its hybrid automation solution and process discovery; enabling autonomous identification of tasks as its biggest strengths.
RPA remains untapped
Juniper says the use of RPA among financial institutions remain at its stages with many solutions underperforming. This is mostly due to the challenges surrounding unorganized and non-textual data, job processes that are hard to summarize and catalogue, and a lack of pre- and post-implementation strategies.
The Juniper whitepaper, Traditional Banks & Fintech: The Race to Automate, noted that RPA has been portrayed as the solution to many FIs’ problems, from back-office activities to customer experience. However, in practice, it has been much less effective. Companies are struggling to develop appropriate pre- and post-automation strategies resulting in complex and expensive automation process that can only perform very specific tasks.
The analyst recommends that FIs stop considering RPA purely as an IT project. As long as RPA is not treated as the core of FIs’ strategy, it will continue to operate below its full potential.
The analyst recommends FIs to invest in the formalization of processes, look for solutions that are able to understand the large range of unstructured data and consider RPA as a strategic action in order to see benefits.
Juniper predicts that automated investment opportunities via robo-advisors will reach US$4.2 trillion AUM (assets under management) by 2023; growing at over 60% per year. Presently, incumbent banks are seeking to provide low-cost investment options while pure-play robo-advisor companies are being pressured to offer human advice.
Juniper found that hybrid solutions remain the customers’ favored option, and therefore suggests that partnerships between incumbent banks and pure-play robo-advisors should be sought after in order to provide optimal service.
First published in FinTech Innovation