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Blog | Mar 19, 2021

The Power of Three: A New Way of Working for Financial Services

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The digital workforce will prove to be the next step in productivity beyond robotic process automation."

In a fascinating infographic called 'The Future of Work After COVID-19', McKinsey Global Institute makes some bold predictions about how life will change between now and 2030 - asserting that the areas of work with the most physical proximity saw the most disruption. These will also be those that will experience the greatest long-lasting change.

Trends that were accelerated by the pandemic included remote working, with 20%-25% of people continuing to do so at least three days a week long-term, says McKinsey. We will also see a surge of digitization of between 2x and 5x, plus an uptick in the use of robotics, AI and automation software.

As a result of all this activity, the type of jobs people do will also go through a significant transition, with 28% of workers in the US and 14% of workers in the UK having to change the work they do. “Business leaders and policymakers can build out digital infrastructure, enable faster reskilling and innovate new worker benefits and support mechanisms”, advises the firm.

Removing Barriers to Innovation

It is this combination of accelerating technology trends and the need for re-skilling workforces that will usher in a new era of change for the financial services industry. The sector has traditionally deployed large volumes of people to undertake repetitive and mundane tasks, often using old and non-interoperable technologies.

This has tended to impede innovation, while creating inefficient processes that lead to poor customer service and employee motivation. Areas such as loan origination, anti-money laundering, customer onboarding and account opening are all ripe for reinvention.

Faced with competition from digital-first banks and fintechs, financial services companies have taken action by adopting a range of new operating models; whether that’s collaborating with third parties with a platform banking approach or adopting intelligent automation technologies that enable them to build out new processes without disturbing core systems.

In either case, we believe that financial services organizations are evolving into three essential and powerful components: a third people, a third systems and a third digital workforce. Human ingenuity and creativity will give financial services institutions the competitive edge they need - but the digital workforce will prove to be the next step in productivity beyond robotic process automation.

Measuring Progress Towards a New Model

We undertook global research with 550 financial services professionals to uncover where progress has already been made, how work models are changing and how this change is predicted to continue in the future.

The first in a series of executive briefing papers, 'The Power of Three: Building the New Operating Model' is based on the results of that research. It provides an explanation of what intelligent automation is, the benefits it delivers to financial institutions and how it is freeing up humans to undertake more meaningful work.

As our research shows, while financial services professionals appreciate the value of automation to day-to-day work, notably in areas such as entering and checking customer data, they are only now beginning to unlock its potential.

We also found that the pandemic has indeed accelerated adoption of new ways of working, with the vast majority (87%) of people in our survey having experienced digital acceleration in some shape or form.

Intelligent Automation as a Lever for Change

And while the narrative around digital workers and robotics has tended to be based around the threat to human jobs, we found evidence that (as McKinsey’s insights concur) work in financial services will go through a transition phase, whereby intelligent automation will liberate people from mundane work and create time and space to add value to the business and its customers.

We asked respondents to our survey of financial services professionals what they would do with time that could be freed up through automation—and it’s clear that spending more time with customers, as well as improving customer experience, come out on top.

Finally, we found that financial institutions with the most positive outlook on the growth in automation of their work were also those that predict higher headcounts in their teams. So, to harness the power of intelligent automation, leaders within financial institutions need the imagination and courage to continue the momentum instigated by the pandemic.

That means understanding the need to show people the benefits to them personally of greater automation, as well as the productivity and financial gains that can be made for the greater good of the business.

You have a talent base that you have to build, you have people that have to think in that way. We shifted our workforce from doing repetitive exercises, to re-thinking how we do the process, actually enabling it – while managing new types of operational risk.
Frank Psoras SVP Customer Strategy, Innovation and Acquisition at TD Bank

Look out for further news of our 'Global Banking Power of Three' executive briefing series: we’ll be focusing in on specific elements of how intelligent automation improves the customer experience, how it builds organizational resilience and agility, and why the banking industry is set to continue changing over the coming years.

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