Compliance implications of RPA
January 2019 | FEATURE | BOARDROOM INTELLIGENCE
Financier Worldwide Magazine
January 2019 Issue
Though a relatively nascent technology, robotic process automation (RPA) is finding favour in the corporate world. Increasing productivity, agility and job satisfaction for employees, RPA is transforming working life.
Through its ability to streamline processes, enhance communication and remove geographical barriers, RPA is set to proliferate in the coming decades. According to the Institute for Robotic Process Automation, an RPA software robot costs about a third the price of an offshore full-time employee and a fifth the price of an onshore worker. Adoption of RPA achieved a 105 percent growth rate from 2016 to 2017, according to Everest Group. Statista believes that the industry will be worth $3.1bn by 2019 and $4.9bn by 2020.
The applications of RPA are many and varied. The benefits each company will derive depend on the size of the organisation and how much of its workload can be automated. While many organisations have used RPA to reduce costs and improve employee productivity, others are using it to manage regulatory issues. Achieving compliance with changing regulatory standards on a local and global level is a fluid, dynamic process. Companies are seeking new ways to improve their compliance processes, optimise related costs and ensure accurate reporting. Compliance requires considerable financial and human resources. It is a complex and data-heavy process. In areas such as anti-money laundering and ‘Know Your Client’ operations, RPA could be hugely beneficial.
RPA can streamline high volume, manual work, which is largely rule-based and requires little to no human judgment. Such work is often repetitive, standardised and prone to human error. It may involve organisations collating data in various formats from several systems. The diffuse nature of this data means it can be of questionable accuracy and quality. RPA allows for much higher levels of accuracy, as well as considerable cost savings. Given the increased regulatory and compliance burden brought about by measures such as the European Union’s (EU’s) General Data Protection Regulation (GDPR), companies have been forced to re-examine their data management provisions. RPA solutions help companies to handle data safely, consistent with GDPR regulations. This includes handling right to be forgotten requests, making changes to personal data and checking data against consent and revocation databases.
As companies across all sectors continue to overhaul their compliance procedures, RPA may be more influential. A OnePoll research survey for Ultima found that 88 percent of SMEs are considering using RPA to tackle compliance-related challenges. Companies which manually process significant amounts of data may benefit most.
However, as with the introduction of any new working practice, the implementation of RPA will be both beneficial and challenging. One pressing issue is deciding which department should be responsible for ‘ownership’ of the RPA process. Should RPA roll-out and management be controlled by the IT department, or by business teams? The division of roles and responsibilities around RPA could cause difficulties if teams do not cooperate from the outset. Companies need the right IT infrastructure in place to smooth implementation.
Another issue is setting realistic expectations. It will take time for companies to see the benefits of RPA. Integrating these systems is often more complex, challenging and time consuming than anticipated. Furthermore, RPA is no panacea; it may not fix fundamental operational or organisational problems. Ultimately, the implementation process needs to be well managed from the outset. Senior management must embrace and evangelise automation, particularly in the early stages of adoption. A mismanaged roll-out could have serious implications from a compliance perspective, for example. Companies can avoid pitfalls by doing the appropriate groundwork in advance.
RPA is disrupting many industries. It has limited human involvement in certain processes to such a degree that intervention is only needed when a judgment or discretionary decision is required. As RPA evolves and drives cost and time savings, it will continue to replace people. A digital workforce is more scalable than a human one. The advantages of employing RPA even for sensitive tasks such as managing compliance will further drive its growth. Future iterations of RPA are expected to have inbuilt artificial intelligence, with natural language programming and unstructured data processing skills, which will make it possible for systems to perform judgment-based tasks independently, without human oversight.
But, for all its advantages, RPA is not the endpoint of digital disruption in the compliance space. Nor is it likely to fully replace underlying business systems. It is, however, the vanguard of the next step on the evolutionary journey of compliance. As AI and cognitive automation become increasingly sophisticated, companies must continue to evolve with the technology if they wish to remain compliant.
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