Are Robots A Growing Threat To BFSI Employees?

by CXOtoday News Desk    Jan 12, 2017

Robots

In the world of cut-throat competition, customer satisfaction has become one of the key criteria for the organizational success. Hence, many industries, especially the banking and financial services sector is heavily leveraging automation technologies for business agility. The use of software robots is a new normal in the BFSI sector and many financial institutions are shifting the tedious workloads such as KYC updation on software robots. However, the growing preference to robotic services is posing a potential threat to employees in the financial services industry. The latest research from Accenture said that rise in acceptance of robo services creates challenge for financial services industry, hence there is a need for striking a balance between humans and robots

According to the global Distribution & Marketing Consumer research by Accenture, consumers are open for robo-advisory services for their financial activities. The study said that seven in 10 consumers around the world would welcome robo-advisory services – computer-generated advice and services that are independent of a human advisor – for their banking, insurance and retirement planning. 

The research, which includes a survey of nearly 33,000 consumers in 18 countries and regions, found that the vast majority are willing to receive exclusively robo-generated advice for certain banking and insurance products. Consumers are now open to robo-advice to help determine which bank account to open (71 percent), which insurance coverage to purchase (74 percent), and how to plan for retirement (68 percent). Nearly four out of five (78 percent) consumers said they would welcome robo-advice for traditional investing, where the technology first emerged.

Yet, a large number of consumers still want human interaction for their more complex needs, leaving firms challenged with blending a physical presence with an advanced digital user-experience, as they look to integrate robot and human services, the study said. The study found that nearly two-thirds of consumers still want human interaction in financial services, especially to deal with complaints (68 percent) and advice about complex products such as mortgages (61 percent).

Piercarlo Gera, senior managing director, Accenture Financial Services, said, “We found strong consumer demand exists today for robo-advice in all areas of financial services - banking, insurance and financial advice. While financial institutions may expect to benefit from internal cost reduction by providing customers with a ‘robo’ option, our research found that consumers also expect first-class human interaction.  Successful financial services firms will therefore need a “phygital” strategy that seamlessly integrates technology, branch networks and staff to provide a service that combines physical and digital capabilities and gives consumers a choice.”

Consumers indicated the main attractions for using robo-advice platforms is the prospect of faster (39 percent) and less expensive (31 percent) services, and because they think computers/artificial intelligence are more impartial and analytical than humans (26 percent).

The survey also found that consumers are willing to switch to non-traditional providers for financial services. Nearly one-third would switch to Google, Amazon or Facebook for banking services (31 percent), insurance services (29 percent) and financial advisory services (38 percent). For consumers aged 18 to 21 years old, the number willing to switch banking services to one of these companies only rises to 41 percent, indicating that many younger consumers see value in traditional financial institutions. Tech giants are not the only ones putting pressure on financial service firms; nearly the same percentage of global consumers would also consider switching to a supermarket or retailer for their banking (31 percent) and insurance (30 percent) services.

Alan McIntyre, senior managing director, head of Accenture Banking, said, “Consumers expect nearly all of their transactions to be on par with the service they receive from GAFA (Google, Amazon, Facebook and Apple) companies, which poses a challenge for banks in particular. Banks need to create branches that provide an advanced digital experience combined with convenient locations, while also developing an online digital experience that can compete head on with the tech giants. The vast majority of today’s consumers view their bank relationships as entirely transactional; in order to gain customer loyalty, banks have to be more assertive in using technology to provide tailored, personalized offerings when, where and how customers want them.” 

There is a long debate over the large scale adoption of robotics in the industries and its potential threat to human jobs. However, industry experts believe that automation is the future of the industry. According to experts, automation will have impact on the jobs in the short term, but it will create new job opportunities in the near future.