How would you describe an industry which is expected to wrestle with 300 million pages of regulatory documentation by 2020? Brave. And that is exactly what the financial services industry is: brave and ready to take on the future. One study has predicted that about £60 billion a year will be spent in the UK alone on meeting regulatory obligations. This is the equivalent of a staggering 2.6% of the nation’s GDP.While the costs are worrisome – because customers will be the ones bearing the brunt – what is even more alarming is the extraordinary burden it will put on people assigned to keep pace with the regulations. Their jobs will become exasperatingly repetitive and mind-numbing. And a tiny error in managing documents and details could get organizations into deep trouble with regulators, investors and customers. But a tiny push from technology can change that. Modern data sciences, machine learning, Artificial Intelligence (AI), Natural Language Processing (NLP) and cognitive computing can completely flip the drudgery and toil involved in executing hundreds of tiresome financial processes.
Finnovation is here and in a few years’ work may not seem like work anymore. Instead, technology will take over these jobs – KYC, trade settlements, cross border payments, etc. – helping employees go back to using their intelligence, intellect and intuition, characteristics that are critical to business and which machines do not possess, to become innovators and explorers. This will have a natural outcome – there will be ample time available to improve customer experience, which is more art than science. People enjoy bringing a smile to the face of their customers and it is certainly more rewarding than an unending geek-style back-office shift. The first step towards this future is to go digital by transforming paper-based and labor-intensive process.
The good news is that we don’t have to wait for that future. Some of it is already unfolding before us. This is because pressure from employees and customers in the industry for an Amazon-like experience for everything has been mounting. Users want processes like opening an account and accessing an account to be fully automated, smart and intuitive. A host of digital banks have begun to show the art of the possible. And, in addition, these initiatives are showing remarkable business outcomes.
DBS is one bank that serves as a good example of how digital can improve services and eliminate tedium from the workplace. The bank has launched exciting new digital partnerships that are reengineering jobs aside from helping launch new services for customers. Last November, DBS launched the largest API platform with 155 APIs, creating all kinds of new payment options, products and service opportunities while automating repetitive and error prone process. Profits at DBS have remained flat but the market cap of the bank is significantly better than traditional banks.
What DBS is achieving is remarkable: it is using technology to transform the workplace while building a more inclusive economy by reaching out to the bottom of the pyramid, delivering services economically and continuing to increase quality. Technology is helping repair what is an already fractured world.
There can be several approaches to achieving this transformation. One tactic is to treat every silo within the organization as a startup. This means thinking of ways to address even functions like recruitment as a startup, bringing onboard the best technology talent and introducing agile ways of working. Fortunately, financial institutions are able to attract top talent – Citi and JP Morgan are attracting GenY and there is no reason others can’t.
In order to improve the velocity of the business transformation, the workplace must undergo even more change to make jobs feel “less like jobs”. In order to do this, the physical workplace must use an ‘Agile’ Working and Ergonomic Philosophy. This translates into work being an activity and not a place; where performance is emphasized over attendance; where team work is valued over individual contributions; where relationships matter and not hierarchies; where sustainability wins over aesthetics.
In instances where we have worked with clients to design and implement technologies for relaxed, open and engaging work settings with an emphasis on environmental sustainability, the results have been notable. Team bonding has improved and hence collaboration, skilled staff has stayed back longer and performs better, and the level of thinking has been elevated. Employees have been inspired and motivated to think differently, device effective solutions and incubate new business ideas. The workplace has begun to reflect the ethos of a cutting edge technology company replacing the musty, steeped-in-tradition feel of a bank or an insurance organization.
Technology is changing the idea of work and the work content itself.People want the freedom to choose where they work from and the tools they use to deliver work; they want to make better use of their intellect instead of investing time in repetitive processes with marginal value generation; they want to drive new thinking within the organization and let it bloom in the form of services that are cost-effective and put their customers in control. Things like predictive spend analysis, fraud detection, credit scoring, risk analysis, regulatory conformance and transactions of every nature will vanish as “jobs”. Technologies like analytics and cognitive computing will become custodians of these processes. Working at a bank, an insurance provider, card company, consumer finance organization, investment bank and even technology providers to the ecosystem will feel different – in fact, not at all like work.