Financial firms are increasingly turning to digital labor to keep up with surging workloads and adapt to workplace changes brought by the coronavirus pandemic. Kevin Moran, global head of business process outsourcing at Broadridge, discusses the role digital labor is playing in the financial services industry and how the coronavirus pandemic is accelerating digital transformation.
What are the trends you are seeing in terms of digital labor?
In today’s environment where remote working is part of the new operating model and volumes remain 2 times elevated year-over-year across equities, fixed income, and options, the use of digital labor is more crucial than ever. To handle volumes and mitigate risk, our Business Process Outsourcing (BPO) clients are partnering with us to deliver Robotic Process Automation and digital workflow solutions. We have seen an increased focus on digital labor being used to perform secondary control reviews, with more firms automating four-eyed checks to mitigate supervisor physical separation anxiety. Additionally, we see the industry migrating their automation delivery strategies, focusing on agile development to accommodate faster time to market for solutions.
How has the coronavirus pandemic changed the way financial services firms are thinking about work and physical office spaces? What role will technology play?
In general, remote working has proven successful across the industry, so it is no surprise that firms are re-evaluating their physical geographic footprint and corporate real estate strategies. COVID-19 has opened the door for the industry to explore untapped markets for talent, utilize cost-effective locations, leverage critical vendors, and reimagine the physical workplace as part of a firm’s business continuity plan. In fact, by outsourcing to a firm like Broadridge, our BPO clients automatically reap the benefits of a diverse, load-balanced geographical footprint. As this shift to more remote working occurs, technological stability and advancements are vital to a firm’s success. As it relates to technological advancements, in our opinion, data transparency, data security, and real-time availability are three of the most important components that need to be assessed in a firm’s strategic technology roadmap.
How are firms managing the relationship between human and digital labor?
The relationship between human and digital labor has never been more important. Human labor holds the leash that digital labor runs on, and it is important to know when to tighten or extend that leash. The most important factor in the relationship is transparency. Firms need a mechanism to understand digital labor performance in real-time that will limit the dependency on application support teams for escalating issues. In the BPO here at Broadridge, we developed a digital labor supervisory tool, AIVision, to do just that. Our supervisors have complete visibility into their digital labor and can take necessary action to limit or scale these solutions at the click of a button. In stressed markets you cannot be reactive, you must have preventative mechanisms to control your digital labor.
How are firms approaching digital transformation implementation, and what best practices/pitfalls should firms be aware of?
Most organizations have quickly adopted the centralized Center of Excellence (CoE) model for end-to-end oversight of digital transformation implementation. While this model effectively amalgamates elements of an automation program into one core team, it fails to capture opportunities strategically. Firms should consider migrating to a federated CoE model for automation delivery, where the core CoE team works side-by-side with automation leads embedded within the Business. In this model, the core CoE team’s focus is on scaling adoption across the enterprise while the business leads the ideation and delivery of the automation. This has proven successful in improving associate engagement and generating stronger return on investment in transformational initiatives. In addition, firms need to understand the key risks in managing transformation implementations, such as cyberrisks, systemic risks, regulatory risks and operational risks. Having a sound program governance and a clearly segregated relationship between digital and human labor can help mitigate these risks. We discuss this in greater detail, along with many other best practices and pitfalls, in our whitepaper The Future of Operations: Your Next Hire is Digital.
Where do you think the industry is heading in the next year?
Financial services firms have proven for decades that even the most tremendous challenges can be overcome. Operating models continue to become more agile and efficient, and we believe this trend will continue in the next year. As it relates to business process outsourcing, we believe that process industrialization, automation, risk management, and talent management will remain the key drivers for success. Providing our clients with the ability to scale their business and grow their revenue is essential, and investments in our processes, people, and technology are indispensable to achieving those goals.