An ISITC panel on AI and robotics reports that the old rules apply when firms embrace disruptive IT.
Securities firms should apply old school best practices of IT and staff management when they consider resolving operational issues with robotic process automation (RPA) implementations, according to a panel discussion that was part of a recent ISITC conference.
The members of the panel discussion, “Why AI and Robotics? The Allure of Intelligent Automation,” were Jason Baldesare, director, strategy and solutions management at vendor FIS; Gordie Sands, executive director, IT architecture and office of FinTech strategy at the DTCC; and Dushyanth Sekhar, senior director, center for automation, robots and extraction at S&P Global.
The panel was part of the 25th Annual Securities Operations Summit of ISITC, held late last month in Boston.
The panel members agree that firms should identify the business problems, the change management issues, workflows, and standardized processes before blindly applying RPA or other disruptive technologies to resolve a situation.
While RPA is a fascinating and cutting-edge area, it would be a mistake for most firms to fall in the love with the technology and then try to apply it problems, Sands says. It’s better to identify the securities operations challenges and then review all the IT options.
“A lot of the objectives can be addressed without doing any automation at all,” Sands says. In addition, for those problems that need automation, there may be IT solutions that are faster, more cost-effective and robust than robotics. It’s a mistake to only consider robotics. “You may be leaving other options on the table,” he says. “I think we need to be realistic about what the expectations are for robotics.”
“This is not a magic bullet,” Sekhar says. If a firm is looking to apply RPA to securities operations issues, the first step should be to eliminate processes that the firm “should not be doing in the first place. … What problems are you trying to solve for the customer? Everything should stem from that.”
Streamlining and standardizing the management of business processes and workflows would pave the way for the changes that need to happen.
“I see a lot of people trying to jump to that without good process standardization,” Sands says. “If you don’t have that, it’s a lot harder.”
Once a firm decides to explore robotics, managers need to calm fears about robots causing massive layoffs — fears that have been blown out of proportion by the media, according to the panel members.
“The propaganda and hype are not something new,” Sekhar says. What is new is that staff members, particularly new college graduates do not want to take on tedious tasks, he says. In fact, major outsourcing providers are also finding that not many people want to sign up for repetitive work, he says.
The good news is that RPA often helps firms automate these tedious tasks and adds to the capacities of staff members, Sekhar says.
Panel members add that RPA is not automatically a license to cut staff. “If your firm wants to eliminate jobs, it doesn’t need robots to do that,” Sands says.
What is more likely to happen is that firms embracing robotics will go through cultural changes that might transform processes, workflows, operations and careers.
For instance, at S&P Global, Sekhar reports that about 90 percent of the staff focused on robotics came from the business side of the aisle. In addition, values may change such as holding in high esteem the management of large staffs, which may be replaced with more modest staffs that can do more because of RPA, he says.
Embracing RPA may also enable firms to explore new revenue-generating opportunities beyond the middle- and back-offices, Baldesare says.
“Can we take some of these things and actually apply them to revenue-generating areas in the front office?” asks Baldesare. Citing an example, one of FIS’s clients has automated the rebalancing of index funds in a efficiency and automation play, he says.
“But it’s also an alpha and margin play because by having less stocks in the portfolio, their trading costs go down,” Baldesare says. “What they saw over time was that the actual models and RPA picking a better set of stocks in the portfolio, so their returns are higher. … I think we’re going to see more of that.”