The Banking and Financial Services industry is the largest consumer of Information Technology Products and Services to the tune of $487 Billion globally (according to Gartner). Even at these levels of spending where new products and services are introduced every day, there is tremendous amount of manual and repetitive work that continues to drive down productivity. The reality is that even the most sophisticated software whether its Marketing Automation (MAS), Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Accounting G/L or SAAS based systems etc. creates challenges where disparate internal and external systems are not integrated and create lots of manual business processes around them.
The challenges outlined above also created the $63 Billion Business Process Outsourcing Industry, where in many cases BPO providers primarily use the offshore labor arbitrage to drive the costs down. Any labor arbitrage-based model has its limits. As the industry hits the maturity cycle, wage inflation combined with productivity loss due to time zone and cultural issues, erodes the cost benefits gained. A similar trend can be seen in the China based manufacturing industry, where we see some of the manufacturing jobs moving back to the US.
Rapidly evolving automation technologies including Robotic Process Automation and Machine Learning can challenge existing “people” based business models. In most cases, Robots can be trained to do many of the BPO jobs of today without data and process knowledge ever leaving the “physical” boundaries of your business.