We are hearing more and more about robots. In financial services, robo-advisors are the rage.
I recall a conversation with executives at a large Singapore bank about the potential closure of a wealth division, to be replaced by robots. What are these robots and why is this trend seemingly escalating?
Well, it's all about cost. If you take a skilled role based in Australia then the cost would be roughly $100,000. But as we have seen, some of these roles have been moved offshore to places like India. In such instances, we could expect that some roles could be outsourced for $40,000.
What is the value proposition of a robot? Why should you consider this as an option? Actually, what the heck is this robot?
These robo-advisors have been priced at around half the cost of a full time equivalent employee. So we would expect that we could run a bot for about $15,000 per annum. That is roughly half the cost of the offshored and outsourced resource.
A bot that is applied to one of your business processes actually can improve the customer service that is provided. Once setup correctly, a bot is very consistent. It doesn't have a day off or celebrate dwali.
In some industries and sectors, such as call centres, the staff turnover rates can be reported to be as high as 45 per cent. This means that we could see 100 per cent replacement within two years and there is a loss of productivity during the onboarding process.
From what I have seen, the onboarding requirements for many institutions can be 3 to 4 weeks of online and self-instructed training. In short, it can be a frustrating process for the employee and for customers waiting for service.
Let's take an example. There are many use cases that can be applied for bots. Already, there are pilots underway in many organisations such as ANZ, AMP and IAG.
Suncorp has launched an app named 'Trov' that lets users collect information about objects they have bought by storing digital photos, market values, receipts and other product details.
The app has been described as "Tinder for insurance' enabling users to simply swipe to obtain coverage. When a customer claims, he or she chats with a bot.
In the consumer world, we are starting to see startups that are building chat bots to guide users through a customer service process. These bots can use different chat technology such as Google Messenger or Facebook's WhatsApp. Hence you don't need to download a new app to be served by the bot.
Another interesting example of an increasingly bot-based world came from an old colleague who had spent his career taking enterprises down the journey of outsourcing to Australia and is now embarking on a new venture with bots.
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