Robots Have Arrived In Finance
For a layman pronouncing ‘robot’ pops up the image of ‘Star Wars’ creatures, a distinctive creature which is the product of imagination.
In reality, robots or robotic processes actually have arrived in a big way and is now helping humans accomplish lots of technical work.
From using mechanical robots assisting in assembling products or accomplishing manual-routine chores, modern technological advancement has led to robotic automation in various processes.
Robotic Process Automation (RPA) also known as Robotics has recently been introduced in the world of corporate finance and changed the entire financial landscape.
Business leaders are recognizing that disruptive technology is playing a pivotal role in transforming finance capability.
Decoding RPA
Simply put, Robotic Process Automation (RPA) is a user-friendly software that has the ability to perform high-volume, routinely repeatable tasks easily and efficiently with the help of Artificial Intelligence (AI). It has the ability to mimic humans with the added benefit of reducing time and eliminating errors in what is otherwise a cumbersome, mundane work.
This is what Capgemini has to say regarding this exponential technology, “As a virtual worker, RPA replicates user actions to reduce or eliminate human intervention in mundane, repetitive, and manually intensive processes.”
Defining RPA, Deloitte says, “RPA is computer-coded software, commonly referred to as BOT, that emulates human actions and is able to drive automation of rule-based processes. It is an ideal automation technique for any process that has heavy dependence on data entry, data manipulation, triggering responses, and communicating with other digital systems.”
KPMG, on the other hand, defines RPA in these words, “RPA is the simplest form of digital labor. Its significance is that it enables data to be collected, analyzed or calculated at a speed and scale far greater than a human or team of humans could manage.”
“Preconfigured software which reproduces the work that humans do, and hence, they are called robots, or software robots. In short, RPA robots automate human tasks.”
Tasks Best Suited For RPA
Talking about the adoption of RPA in finance and accounting, Gartner brings to light the high percentage of processes that will benefit from its implementation.
Here is a list of tasks that can be automated with great success:
- Tasks that are data intensive.
- Work that involves manual calculation.
- Tasks that face a high error rate.
- Actions that require an electronic trigger.
- Tasks that are repetitive in nature.
- Actions that have electronic start and endpoints.
10 Functions That RPA Can Advantage
The most common functions that can draw benefit from robotic automation in finance and accounting are:
- Accounting and Reporting
- Internal Audit and Compliance
- Payroll
- Tax
- Accounts Payable
- Accounts Receivable
- Budgeting and forecasting
- Treasury Management
- Expense Management
- Inventory Management
How Is Robotics Advantageous?
Companies and finance personnel who have adopted and applied robotics to perform numerous financial functions at a very early stage are reaping the benefits already and this has motivated the Industry to embrace RPA in a major way.
8 Benefits Derived From RPA
- It assists in streamlining the process.
- It is more efficient and fast, hence, saves time.
- It helps in minimizing cost.
- Human resource is freed from time-consuming, monotonous tasks.
- It greatly reduces the chance of errors.
- It motivates and empowers the workers towards more productive work.
- It helps to move towards a modern and futuristic approach.
- It undoubtedly increases scalability and enhances flexibility.
These are some of the reasons why more and more finance leaders are keen to apply this techno-vation in their businesses or companies.
“Global investments in AI and Robotics are on the rise, thanks to their promise of cost-efficiency, agility, sustainability, and quick ROI.”
Future of Business: Artificial Intelligence and Robotics
Let us examine how these entities will benefit by embracing RPA in finance:
- Ushers greater efficiency
- Ensures accurate and secure compliance
- Improves productivity
- Gains competitive advantage
Thus, there is no wonder that the adoption of robotics is set to skyrocket businesses in the near future.
A Gartner research indicates that Robotic process automation is being embraced by many finance leaders to reduce costs, improve compliance and structure more efficient finance teams.
In the year 2020, RPA is supposed to take a big leap as is projected based on the findings of this research.
Source: Gartner
Cost-effectiveness comes out as the biggest lure for the implementation of RPA.
Source: Gartner
In Finance 2020, Accenture reiterates almost the same views and states, “Digital is killing your finance organization as you know it. But there is no reason to mourn the loss. Accenture analysis shows that by 2020, cross-functional integrated teams will deliver 80 percent of traditional finance services. Staff productivity will increase by two to three times. As a bonus, costs will decline by 40 percent.”
Not to be left behind, Ernst & Young is also completely in favor of applying automation in finance at the earliest and presents the benefits from RPA thus:
Source: Ernst & Young
Extensive Scope Of Robotics In Finance
Paul McDonald, senior executive director, Robert Half, very rightly said, “People and their relationship with technology, or more specifically, how they work with and apply technology in new and imaginative ways, will help define the new world of work.”
According to a worldwide survey of more than 400 organizations by Gartner, Inc. regarding the deployment of top emerging technologies by 2020, Christopher Iervolino, senior director analyst at Gartner has some interesting facts to share.
He states, “More than a quarter of organizations surveyed expect to deploy some form of artificial intelligence (AI) or machine learning in their finance department by 2020. Moreover, half of the respondents expect to deploy predictive analytics in the same period.”
A Robert Half survey held recently concluded, “79% of managers in the U.S. are either currently using automation or expect to do so within the next three to five years.”
Once throwing light on the need to automate in finance, Paul Bulpitt, the head of accounting at Xero and founder of The Wow Company commented, “Historically, it has been hard to provide value-added services due to their (accountants) time being taken up with compliance work and an inability to view financial and operational data in real-time.”
At the moment, the implementation of RPA covers superficial and basic processes, yet it has made a sea difference.
For example, by using cloud accounting software, accounting firms and professionals are able to automate most of the tasks with minimum human involvement.
This has helped to change the scenario a great deal for professionals as they get more time to analyze, stay in sync with changing regulations and make strategic decisions and hence, play a more productive role in the company.
A survey by Deloitte in 2015 to gain an insight into the scope of automation in the coming 10 years showed that more and more entities intended to adopt it in the near future.
Source: Deloitte
Not stopping at this, the Deloitte Survey throws light on how the businesses further intend to automate and take advantage of the latest automotive inventions.
Source: Deloitte
Affirming the vast reach of robotics, Mr. Ashwani Kohli, Director, Intelligent Automation, PwC South East Asia Consulting, commented, “Besides the traditional accounting operations, RPA is also having an impact on audit, tax planning, and statutory and regulatory reporting processes.”
Hurdles in the Way of Robotic Automation
There is no doubt about the overwhelming benefits that can be drawn from robotics in finance but the biggest challenge lies in its implementation.
Even while embracing automated accounting software, a company needs to plan and strategize thoroughly because a lack of preparedness will not give the desired result.
Capgemini’s advice on this front carries a lot of meaning for those businesses that are looking to implement robotics, “As an organization that is constantly looking for opportunities to improve its processes, Capgemini understands the speed at which robotic automation can transform a business. However, it also understands that a lack of proper preparation before introducing robotics can lead to a start-and-stop implementation.”
Gartner, the world’s leading Research and Advisory Company also echo the same sentiment and says, “To achieve the full benefit of robotic process automation (RPA), corporate controllers need to restructure their workforce to enable automated work, free from human interference”.
Here are a few crucial footsteps that a firm has to take for successful implementation of robotics:
Footstep #1: Allay the fear and concern of Employees: The utmost problem is the apprehension of employees that the robots are here to replace them. This distress about job insecurity should be addressed by employers as a pre-work, giving them insight into how robots will assist and ease their work but not render them jobless.
Professor Michael Davern, Professor of Accounting & Business Information Systems, at the University of Melbourne in Australia, very rightly comments, “Fears of RPA replacing workers are as unfounded as earlier concerns that computerized spreadsheets would replace accountants. RPA is about automating tasks, not entire processes.”
Footstep #2: Train the Workforce: It is quite true that there is a dearth of trained and qualified employees to work with RPA and hence, it is the duty of companies to train and upscale its employees. Proper guidance towards its implementation will ensure a 100% reward.
Feon Ang, vice president for talent and learning solutions, expressed his views on how workers can remain relevant in the future and said, “It’s important for companies to continue to invest in their people so that they are upskilling and reskilling their people to keep up with the roles that are in demand.”
Footstep #3: Safeguard Data privacy: A firm’s biggest concern in sharing data is its privacy that can be attained using cloud accounting software, that ensures complete data security, backup, and restoration.
Footstep #4: Connect all dots: The Company should make sure that no gaps are left in the process otherwise the results will not be as expected.
Robotics: Making Future ‘Perfect’
Laying stress on the role of automation in a global economy, KPMG states, “The Fourth Industrial Revolution is quickly unfolding as the evolution of artificial intelligence, IoT, and robotics move firmly into the mainstream and upturn media, transportation, healthcare, security, retail, telecom, and many other fields.”
Acknowledging the immense economic and social power that is derived from tech disruptors, the modern global leaders, across varied industries, are eager to embrace them in the near future, if not already adopted.
Change is a necessity that leads to progression and advancement and hence, should not be perceived as an intimidating factor, instead, it should be welcomed. Thus, in order to reap the rich dividends of robotics, it is mandatory for industry leaders to adopt and adapt innovative automation tools.
It is imperative to comprehend that Artificial intelligence and human intelligence are not in conflict with each other; on the contrary, the partnership enhances efficiency, encourages insightful practices and stimulates growth.
The pros of Robotics in finance are quite evident and therefore, the success of businesses and individuals lies in adopting it at the earliest and with complete preparedness. Its adoption in finance is no more a choice but has become a necessity as with time more innovative and disruptive tools will be added to RPA, leading to complete automation of processes.
The existing transforming tools have already shown excellent trends and the success of companies who have been able to take the “first-mover advantage” is a motivator for others.
Conclusion
Change, which is affected by tech disruptions, may create anxiety and uncertainties but its successful implementation yields escalated growth and progress. To keep pace with others, it is essential to embrace transformation at the same speed; otherwise, it will lead to stagnation.
Robots, which were initially portrayed in a negative light and therefore, businesses and individuals, were reluctant to embrace it, but with time it has stood the test and proved as a remarkably useful tool.
The introduction of automation and artificial intelligence in business has transformed the entire landscape and finance cannot be left untouched by it. Although there was an initial reluctance by the professionals of this field in opening up to the new technologies like automated cloud computing or RPA, eventually they saw the huge advantages it brought.
Today most of the professionals and firms are capitalizing by leveraging robotics and transforming the entire financial landscape. This has helped financial personnel to upskill themselves and add more value to their jobs, thus, bringing-in more job satisfaction.
Robotics promises to promote and encourage great advancement in financial functions if only the leaders overcome the hurdles that come in their implementation!
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