May 19, 2020

The future of operational risk management: why businesses need to embrace new tech

Risk Management
 Robert Rutherford
5 min
The future of operational risk management: why businesses need to embrace new tech

Robert Rutherford, CEO of IT consultancy QuoStar, discusses the benefits of a technological approach to risk management.

The impact of technology on the business world is pervasive and constantly evolving, which has meant that companies must take action in order to stay both competitive and secure. However, with so many complex products and solutions on offer, it can be difficult for businesses to know where to begin.

For some companies, it may be tempting to prioritise client-facing technologies that promise immediate and measurable commercial benefits, but businesses also need to think about long-term transformations in key areas, such as operational risk management (ORM). 

The impact of poor risk management can be devastating for firms not only financially, but also reputationally, yet some businesses seem willing to take chances in this area. Failing to update ORM processes and systems will leave these businesses vulnerable to increasingly sophisticated cyber threats, data breaches and fraud. Investing in new technology for ORM is therefore more than just common sense – it’s essential. 

Automated detectives: anticipating risks

Identifying areas of vulnerability from vast swathes of data is definitely not a one-man job. A report by McKinsey notes that around 50% of financial services staff are currently dedicated to risk-related work, while just 15% are focused on analytics. Although, by 2025, it anticipates these figures will be closer to 25% and 40%, respectively. The integration of AI and data analytics systems in ORM will be responsible for this reversal.

In today’s world, data rules the roost, sparking a wave of advanced analytics tools that will become more valuable as more data is shared. Predictive analytics techniques, machine learning, and artificial intelligence can all help to efficiently build large and complex data sets. Working at a faster pace than any human, these solutions can be used to identify discrepancies long before they cause any serious problems.

While AI’s capacity for a rational, proactive response is still in the very early stages of development, organisations can already use real-time risk data to advance decision-making by establishing a framework that uses automated processes. For example, banks can now invest in robotic process automation (RPA) bots that will continuously scan their internal environment and collect data from predetermined sources. As a result of developments like these, time-consuming and costly manual auditing methods will eventually become a thing of the past.


Risk strategy is a team game

Breakthroughs in data analytics also mean that machines can now process data faster, more efficiently and without any bias. As such, it’s important for risk managers to see this technology as a tool to be exploited and leveraged, rather than as a threat. To this end, all areas of the business need to understand its capabilities in order to build a proactive working relationship with these solutions.

While defending against risks like cyber-attacks is vitally important, many at board and executive level are still unsure how to tackle this issue. This is alarming considering that 69% of financial services CEOs report they are concerned about cyberthreats, according to a 2016 survey by PwC

Those responsible for risk management strategies can often find that there is a knowledge gap between them and the board-level decision makers, as executives tend to rely on external consultants for answers. However, it’s the board that will ultimately be held accountable for any failings, so effective communication between risk managers and decision-makers is essential.

Business leaders should therefore focus on creating a culture that not only prioritises risk management, but also one that encourages employees at all levels to engage with the systems they use. This top-down approach is the only way to ensure that everyone is properly prepared for the inevitable shift in ORM’s technological architecture and able to mitigate and manage the operational risks of the future.

Some businesses will struggle with what can potentially be a significant change to the way they operate, so shouldn’t be afraid to seek expert help on how to manage this transition. Failure to address risk would be a serious error, but mitigating risks in the wrong way can be equally as damaging.

Cause for concern?

Future proofing with technology like data analytics and AI shouldn’t make employees worry about job security. A company using new technology to manage risk will see a reduction in operating and auditing costs, an optimisation of its insurance coverage, as well as an increase in staff satisfaction. By introducing tools that are capable of automating manual processes, businesses will find that employees have more time to optimise their output and reconsider their relationship to ORM.

Without a doubt, the switch from human to algorithm-based risk assessments will present new challenges, some of which may be difficult to anticipate. This is simply the nature of change. What we do know is that developing a robust ORM strategy using new technology leads to more proactive and informed decisions, giving businesses the competitive edge necessary to grow in today’s marketplace. The field may be complex, however, there isn’t a better time to take ORM seriously and invest in the future.

For more information on business topics in the Middle East and Africa, please take a look at the latest edition of Business Chief MEA.

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May 28, 2021

Automation of repetitive tasks leads to higher value work

Kate Birch
4 min
As a new report reveals most office workers are crushed by repetitive tasks, we talk the value of automation with UiPath’s MD of Northern Europe, Gavin Mee

Two-thirds of global office workers feel they are constantly doing the same tasks over and over again. That’s according to a new study (2021 Office Worker Survey) from automation software company UiPath.

Whether emailing, inputting data, or scheduling calls and meetings, the majority of those surveyed said they waste on average four and a half hours a week on time-consuming tasks that they think could be automated.

Not only is the undertaking of such repetitious and mundane tasks a waste of time for employees, and therefore for businesses, but it can also have a negative impact on employees’ motivation and productivity. And the research backs this up with more than half (58%) of those surveyed saying that undertaking such repetitive tasks doesn’t allow them to be as creative as they’d like to be.

When repetitive, unrewarding tasks are handled by people, it takes time and this can cause delays and reduce both employee and customer satisfaction,” Gavin Mee, Managing Director of UiPath Northern Europe tells Business Chief. “Repetitive tasks can also be tedious, which often leads to stress and an increased likelihood to leave a job.”

And these tasks exist at all levels within an organisation, right up to executive level, where there are “small daily tasks that can be automated, such as scheduling, logging onto systems and creating reports”, adds Mee.

Automation can free employees to focus on higher value work

By automating some or all of these repetitive tasks, employees at whatever level of the organisation are freed up to focus on meaningful work that is creative, collaborative and strategic, something that will not only help them feel more engaged, but also benefit the organisation.

“Automation can free people to do more engaging, rewarding and higher value work,” says Mee, highlighting that 68% of global workers believe automation will make them more productive and 60% of executives agree that automation will enable people to focus on more strategic work. “Importantly, 57% of executives also say that automation increases employee engagement, all important factors to achieving business objectives.”

These aren’t the only benefits, however. One of the problems with employees doing some of these repetitive tasks manually is that “people are fallible and make mistakes”, says Mee, whereas automation boosts accuracy and reduces manual errors by 57%, according to Forrester Research. Compliance is also improved, according to 92% of global organisations.

Repetitive tasks that can be automated

Any repetitive process can be automated, Mee explains, from paying invoices to dealing with enquiries, or authorising documents and managing insurance claims. “The process will vary from business to business, but office workers have identified and created software robots to assist with thousands of common tasks they want automated.”

These include inputting data or creating data sets, a time-consuming task that 59% of those surveyed globally said was the task they would most like to automate, with scheduling of calls and meetings (57%) and sending template or reminder emails (60%) also top of the automation list. Far fewer believed, however, that tasks such as liaising with their team or customers could be automated, illustrating the higher value of such tasks.

“By employing software robots to undertake such tasks, they can be handled much more quickly,” adds Mee pointing to OTP Bank Romania, which during the pandemic used an automation to process requests to postpone bank loan instalments. “This reduced the processing time of a single request from 10 minutes to 20 seconds, allowing the bank to cope with a 125% increase in the number of calls received by call centre agents.”

Mee says: “Automation accelerates digital transformation, according to 63% of global executives. It also drives major cost savings and improves business metrics, and because software robots can ramp-up quickly to meet spikes in demand, it improves resilience.

Five business areas that can be automated

Mee outlines five business areas where automation can really make a difference.

  1. Contact centres Whether a customer seeks help online, in-store or with an agent, the entire customer service journey can be automated – from initial interaction to reaching a satisfying outcome
  2. Finance and accounting Automation enables firms to manage tasks such as invoice processing, ensuring accuracy and preventing mistakes
  3. Human resources Automations can be used across the HR team to manage things like payroll, assessing job candidates, and on-boarding
  4. IT IT teams are often swamped in daily activity like on-boarding or off-boarding employees. Deploying virtual machines, provisioning, configuring, and maintaining infrastructure. These tasks are ideal for automation
  5. Legal There are many important administrative tasks undertaken by legal teams that can be automated. Often, legal professionals are creating their own robots to help them manage this work. In legal and compliance processes, that means attorneys and paralegals can respond more quickly to increasing demands from clients and internal stakeholders. Robots don’t store data, and the data they use is encrypted in transit and at rest, which improves risk profiling and compliance.

“To embark on an automation journey, organisations need to create a Centre of Excellence in which technical expertise is fostered,” explains Mee. “This group of experts can begin automating processes quickly to show return on investment and gain buy-in. This effort leads to greater interest from within the organisation, which often kick-starts a strategic focus on embedding automation.”


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