Across the asset servicing industry, software robots are already improving efficiency and de-risking manual processes. In fact, we've reached a point where every type of enterprise, from the largest asset servicers to the smaller boutique administrators, are adopting these technologies.
Other financial services firms such as insurers and banks were some of the first robotics process automation (RPA) adopters, first using the capabilities a few short years ago. Their successes supporting front-office client facing functions caught asset servicers' attention and charged their resolve to get similar benefits.
Asset servicers have made their intentions known. For the past 18 months, they've been touting their plans for RPA application to the professional investor community as a way to save costs and eliminate manual processing and associated error rates. Many of the largest asset services have been proving the truth of those claims, and have installed hundreds of robot processes in that time.
Why Is This Capability so Compelling?
Relative to other data processing businesses, asset servicers have traditionally hired higher cost, high-value individuals to perform complicated activities such as accounting for derivatives or processing payments around the world. Yet, this talent has too often been relegated to manipulating spreadsheets, typing data from one system to another, or undertaking other activities that don't leverage their skill sets to the full value of their compensation.
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Now, the asset servicers have shown how these manual tasks can be performed with robotics software and are accelerating the technology's deployment. And it's not just about reducing cost and error rates.
Perhaps more importantly is what it frees up. By moving routine work to a virtual workforce, financial services firms are able to deploy human beings more carefully and strategically. Notably, when robotics and RPA start to take on more significant tasks, skilled employees can help facilitate even more advances by shifting into roles that only human cognition can handle, such as direct client service and relationship management, strategic technology and process improvements, and other top line growth initiatives that would have required incremental hiring.
All the while, the dollar savings created by the strategic use of robotics is hard to ignore. A simple transition from 80% onshore/20% offshore to 60% onshore/10% offshore with a 30% virtual workforce can cut costs by nearly 25%. Apply these savings across hundreds of staff and this equates to tens of millions of dollars in annual savings.
