Robotics and producer services today
The accelerating rate of technological change, and increasing penetration of mobile devices, combined with shifting customer preferences will have dramatic implications for the ways in which producer services are structured, delivered and consumed. This trend is evident in Australia and is more apparent in other countries in the Asia-Pacific region [AICFS18]. Technology has made an enormous change to the way Australians engage with their banks — with the once ubiquitous in-branch interactions now predominately replaced by ATMs, online transactions, and mobile services [AICFS18]. Worldwide in 2017, investors deployed $US16.6 billion across 1,128 deals to venture capital-backed FinTech companies [CBI17]. With developments in financial technology, robotics is set to deliver new services, with the potential to generate new types of jobs.
Not all indicators are positive however, with a recent analysis finding that 34 per cent of a bank worker’s job is susceptible to automation. One of Australia’s banks recently announced the loss of 6,000 current jobs, to be replaced by 2,000 new jobs requiring different skills, mainly in the area of data science [ABC171]. In general, there is a burgeoning trend for customers to move away from big banks to smaller organisations and start-ups that provide the same services [TAB17]. Millennials have high digital expectations of banks. This demographic is likely to be more willing to engage with robots for financial transactions, and to trust them with complex activities [CIO16].
Australia’s producer services sector has been quick to take up robotic process automation (RPA), machine learning, AI, and computer vision techniques. For example, ANZ is using RPA in processing payroll, accounts payable, mortgage procession, and human resource (HR) functions. The ICICI Bank uses RPA to perform over one million banking transactions in back-end operations per day, reducing response time by 60 per cent, together with improving accuracy. These software robots are deployed in over 200 business process functions of the bank, across retail banking, agri-banking, trade and forex, treasury, and HR. These processes include addressing change requests, automatic teller machines (ATM) query resolution, and verifying know-your-customer compliance [TFB]. While robotics hardware has found increasing industrial applications over the last few years, its entry into the services sector, especially financial services, is quite recent. This technology is now touted to bring fundamental changes to the way banks operate, heralding a new era in self-service banking.
To meet these expectations, banks are using virtual robots in multiple processes via RPA. Processes that are high volume, manually intensive, and prone to risk and human error are prime candidates for RPA. Such applications, like chatbots and robo-advisers, are virtual robots that do not physically interact with the world and have not traditionally been viewed as part of “robotics” – although they rely on machine learning and AI. Such distinctions are blurring however, with RPA deployed alongside humanoid robots to provide customer service at bank branches. When robots are enabled with cognitive computing, AI, and machine learning capabilities, they can operate autonomously, learn on the job, and can interact and conduct seemingly intelligent conversations with customers. Already, Roboadvisory company Betterment, is reportedly managing over $US5 billion assets, with KPMG estimating that by 2020, robo-advisers will manage $US2.2 trillion in the USA alone [KPMG17]. The market for robotic technologies in the financial sector will be significant. Less is known about how these technologies will influence the property market, but similar significant change is likely.