Advancing automation in Australia and New Zealand Banking and Insurance

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By Mark Fioretto, Area Vice President and Managing Director ANZ at UiPath.

End-to-end automation is now driving the digital transformation journey of Australian and New Zealand financial organisations in a hyper-competitive business environment. A recent IDC APJ Automation Survey 2022 commissioned by UiPath confirmed that, globally, 43% of banking and insurance industry organisations will use automation on an enterprise-wide scale by 2025. In Australia and New Zealand, spending on enterprise-level automation in key areas such as big data and analytics is expected to reach $US8.9 billion by 2026.

Banks, insurers and fintechs are investing more in automation because it offers remarkable scale, business resilience and agility.

This lets finance organisations become more real-time, personalised, and super-efficient in a dynamic market. It also helps financial firms keep pace with the rapidly changing regulatory environment. Especially as Australia moves to become a global leader in digital economy regulation.

Outlook for the banking and insurance industry 

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By the end of 2022, the average banking and insurance company is expected to generate around 65% of their revenue from digital products, services, or digitised experiences. The Australian Banking Association has found that more than 80% of Australians prefer to check account balances, pay bills and transfer money online. Meanwhile, Adrian Orr, Governor of the Reserve Bank of New Zealand – Te Putea Matua recently advised that New Zealand’s money and cash system was at a crossroad, and innovation supported by digital technology was necessary to build a sustainable future.

Customers are fast adopting all things digital. With Australian and New Zealand banks, insurers and fintechs looking to compete against the digital engagement metrics of the world’s leading digital and virtual banks.  

Although the sector is diverse and organisations have varied levels of digital maturity, there has been an overall shift in customer interactions that has required an increased focus on real-time, customised, and predictive analytics to improve customer experiences.   

The exponential growth in digital transactions, new customer demands, rising security and governance considerations, and the need to deliver scalable services has driven banking and insurance enterprises of all sizes to invest heavily in automation across the enterprise. It is anticipated that twice as many finance organisations will move to an enterprise-wide deployment of robotic process automation (RPA) by 2025 to make customer engagements more personalised. IDC anticipates that, within the next two years, 75% of all consumer and small business loans across Asia Pacific will originate through AI-enabled and automated processes. This is being evidenced with Australia’s first AI-powered loan marketplace funding $28.5 million in small business and personal loans in the past year alone.

Automation advantages for finance firms 

The banking and insurance sector is one of the earliest adopters of automation and because of sustained investment, it has stayed ahead in the maturity curve of digital transformation compared to other industries.  

For example, Heritage Bank has automated more than 80 processes since 2017. That is as it transformed to become a digital bank with a physical presence. The bank has focused on building scalability into its back and middle office processes to provide better efficiencies for customer service staff so they could focus on managing the increasing scale of the bank’s membership base. Automation has helped improve both the customer experience and employee experience to attract and retain customers and employees. Investing in automation has also achieved 98% accuracy in machine learning across multiple banking and wealth management applications, and provided up to 90% process automation when compiling living expense reports. This is freeing up employees so they can spend more time providing personalised services to customers. 

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MyState Bank is also using enterprise automation to improve employee and customer experiences, customer satisfaction and reduce operational costs and errors, which is saving around 435 hours a month on internal processes. 

Through automation, the Royal Automobile Club of Queensland (RACQ) has gained around 50,000 hours of additional capacity to deliver high quality insurance, banking, and roadside assistance services to approximately 1.8 million members in Australia. 

Role of CIO/CTOs in scaling automation 

The shortage of experienced technology workers is also driving change as 38% of organisations are building their future workforce by providing comprehensive training that focuses on reskilling and upskilling. This is where the role of the Chief Technology Officer (CTO) and Chief Information Officer (CIO) is redefined in financial services. Traditionally, the functions of CTOs and CIOs were to identify and track emerging IT trends that could improve their company’s products and services and to manage repetitive tasks. However, since the shift to hybrid and ‘work from anywhere’ workplaces,  32% of CTOs and CIOs have emerged as key drivers of enterprise automation. Due to increased service requests, cyberattacks, and the demand for new digital solutions, IT operation activities have increased significantly.

In 34% of organisations in Australia , there is a coherent strategy in place with leadership-driven initiatives. In addition, about 63% of firms state that their automation staff is no longer solely in IT but distributed among IT, line of business (LOB), and/or a centre of excellence (COE).

CIOs and CTOs are key to the implementation of intelligent automation solutions that transform a finance company’s operational processes, such as infrastructure automation and service management integration, and ensure security compliance to create zero-touch service management capabilities. A recent Morgan Stanley Research report highlighted that IT spending and demand for digital growth and operational efficiencies will continue, so finance CIOs and CTOs must find the right balance between growth and efficiency.  

The road ahead 

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Finance has been an industry that has led the adoption of automation to improve efficiencies, enhance customer experience and accelerate growth. Through automation, banks and insurers now provide more self-service capabilities for customers and employees, and gain a holistic view of the customer journey.  

However, to date the finance industry in Australia has only scratched the surface on the true capabilities that end-to-end automation provides. By reducing the life cycle of product development, integrating with legacy systems, and creating new value propositions through artificial intelligence and machine learning, automation translates business growth strategies into substantial solutions that can be delivered remotely and at a hyper-personalised level to each and every customer. 

As wages growth remains stagnant and inflationary pressures remain, customers will increasingly look to wealth management partners to provide proactive solutions. This is where automation will truly empower banking employees to develop and deliver innovative solutions that will support and retain customers, and drive sustainable growth for the business over the long term.