One of the most topical issues right now is the accelerated adoption of technology in most banking functions. COVID-19 has simply quickened the adoption of new technologies and pushed them to the fore withal. Therein is an incontrovertible pull away from traditional customer touch points such as physical branches and ATMs and a push towards on-line banking platforms and banking apps. There is more: Behind the scenes, other forms of automation in support of clients’ end systems or other activities are in full motion. Even our local banks are fully embracing the use of Artificial Intelligence (AI), robotic process automation (RPA), desktop assistants and cognitive automation in their day-to-day operations.
For most employees of the banks, introduction of these new technologies is simply a shot in the head as they view technology as a substitute for human capital and the real nemesis of their jobs.
A colleague of mine shared a video clip via Facebook where it is reported that since the start of the pandemic, local banks have laid off about 390 employees due to a variety of reasons. Some may actually argue that this is due to the banks’ changing operating models and that technology is now the main driver. On the increase is the fact that grunt work and repetitive tasks are being replaced by robots or other automated tools and no longer done by humans. While the Brookings Institute estimated that 36 million workers will lose their jobs because of AI, according to the World Economic Forum, AI will create 58 million new jobs. Furthermore, just in the decade between 2006 and 2016, according to analysis presented by Reinhart and Edwards, over 51 million jobs were destroyed while 179 million jobs were created.
Perhaps it is only befitting to call the latest developments a necessary evil. Automation can present numerous advantages and disadvantages (although minimal). Automating previously manual and paper-intensive processes can save time and money. As discussed in my previous articles, in Wealth Management, international banks are fully embracing Robo-advisory and it has proven to be a cheaper alternative as it drives down costs for Wealth Management Services. The cost of financial advice is usually lower in contrast to that of human advisory firms. Aspects such as fixed costs can be easily avoided and this will not be the case with human advisors who generally need to be housed in an office. The reduction of these costs can make investing affordable for clients as a minimum investment requirement to get an investment fund going can be lower and management fees as well. In Private Banking and Relationship Management, the Customer Relationship Management tool provides insights into private bankers and executives about what they need to know about their customers and how that information is used to develop a complete customer relationship management perspective.
Growing up in my hometown of Selibe-Phikwe, my initial sighting of a computer was on television. During that time, computers brought terror to a lot of people and were seen as taking jobs away from people. Perhaps before my generation, people probably resented such things as automobiles, trains and aeroplanes. Nowadays, you cannot do anything without these in terms of travel and we have assimilated them into our everyday life to make things much easier.
As a matter of fact, these advancements have proven to us that they can assist us in doing our jobs faster and with better precision. The transition and introduction of the new way of doing things ought to be managed accordingly. Organisations that seriously care about the wellbeing of their employees will certainly have relevant and robust change management programmes to help employees cope with changes and accept new realities. If change management is done well, there will certainly be more benefits than woes and no employees acting as frustrators. First, use of these technological advancements has proven beyond doubt that an accurate analysis of customer trends and behaviours can be easily achieved. Due to this, there can be an improved customer satisfaction and loyalty. Similarly, the bank staff can spend more time using the analytics to their advantage and have more meaningful conversations with customers as they are well equipped with facts on customer trends.
Other benefits include more responsive and efficient operations. This is due to a shift from doing things manually to a more structured and automated process, thus executing tasks at a much better pace. The other benefit is tighter Compliance. Artificial Intelligence ability to process large volumes of data with speed and accuracy can potentially transform regulatory compliance. In the short term, the technology can be used to assist banks and the executives to understand compliance requirements easily and take required action. Praven Mishra writes in his blog in an article titled “How AI helps in Fraud Detection” that leveraging AI for fraud prevention has helped companies to enhance internal security and streamline business processes. Thus, by driving improved efficiency, Artificial Intelligence has emerged as a major technology for preventing financial frauds.
The biggest bonus is the adoption of these technologies to free up the bank staff from mundane and repetitive tasks and allowing them to focus on Strategic Initiatives and tactics to support it. Operational and repetitive tasks never move organisations to the next level. It is the interrogation of the status quo and determining what ought to be done to leapfrog your peers that give you a strategic advantage. If team members, supervisors, managers and executives are on the operational gear most of the time, the organisation is likely to get stuck in the mud and will never explore opportunities for growth. Freeing up the strategic heads from operational duties will most certainly give an organisation room for people to be more creative, innovative and challenge themselves with learning and acquiring more information in pursuit of changing their current business models.
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