Advisors have been encouraged to embrace the world of AI and RPA safe in the knowledge it will free human potential rather than replace it.
The rise of the robo-advisor and the growing awareness and implementation of Robotic Process Automation and Artificial Intelligence has fuelled fears the industry is about to change beyond recognition and, worst case, render human advisors redundant.
EY uses RPA, through its partnership with leading software provider Blue Prism, for many back-office tasks and for rebalancing clients’ accounts.
Dave Inglis, senior manager, wealth and asset management, EY Canada, told WP that it’s proven to be invaluable in freeing up time for advisors to be more client-facing and for cutting out costly and time-consuming errors.
However, he told advisors to go in with their eyes open, understand what RPA can do and not to expect it to cure all ills.
He said: “If you are an advisor attached to a large bank, the decision is not yours; it’s invisible to you. For an independent advisor that has his or her own team and does their own operations, I would say the key thing is to be conservative in the processes you pick and find out what causes the most backlog and trouble for you in terms of repetitiveness and volume.
“Limit RPA to things that are repeatable and very manual, rather than think it will solve every problem you have.”
He added: “It’s great for things like compliance and suitability issues. Also, for example, it’s 5pm on a Friday and you still have three pages of reports to go through and your eyes are closing, that’s when you make mistakes – that doesn’t happen with a robot.”
Inglis believes the doom-mongers who predict robots will take over the world – and financial advisory firms - have missed the point and that it will actually unlock our brainpower, not replace it.”
He added: “A lot of this repetitive stuff has a very high turnover in the operations departments – you can’t keep people in some jobs because they are not very compelling. Someone gets to a level of seniority and they don’t want to do that anymore.
“Robotics can really enable an organisation to take advantage of the brainpower rather than [simply] the arms and legs of people.”
Rather than totally change or replace advisors, Inglis believes it will allow them to further morph into the financial planner model, which is the way the industry has been heading regardless. He said they can become more of a mentor and coach as opposed to a traditional stockbroker or someone who is selling product.
“[RPA] takes away a lot of the back, mid-office tasks and allows advisors to focus on client goals and what we need to do to reach them. Then, you let the bots execute the transactional side of it.”
One major area where EY feels it has benefited from automation is in the elimination of mistakes. There’s no concern about “fat fingers” and getting addresses wrong or accidently putting someone in the wrong fund. Inglis told WP that rather than spark a raft of cost-saving measures, the impact of RPA has been more qualitative.
He said: “It’s been tremendous. It’s a fairly immature market, it’s only been three years old and the initial thinking was that this is going to drive tremendous cost-savings – but where people actually find the value is on the more qualitative side. So, things like accuracy, client satisfaction and reducing backlog, things like that.
“On the rebalancing issue, it sets a ceiling on the number of clients I can serve if I want to rebalance them every quarter. If I have an automated way of doing this, it opens it up to either spending more time with clients or bringing in more.”
AI and the RPA process engine are two separate technologies but the joining of the two is where the real potential is set to reveal itself. There is a lot of hype, especially around RPA, but Inglis warned it isn’t the silver bullet for all problems and that there are some areas where RPA alone is ineffective.
He said: “To think that everything is going to be replaced is [an idea] brought up by those who are worried by the impact. But I think there is always going to be room for an advisor.”
He added: “There is no way a bot or an incredibly advanced AI engine is going to be able to navigate various concerns people will throw at them. RPA is not great at making decisions – you need a human.
“If you are investigating an error, that’s not something an RPA engine would do very well. It doesn’t read pdfs very well. But once you have data structured and clearly readable, that’s where it really shines.”
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