Shared service centers (SSCs) are a way to centralize process-intensive business functions across multiple business units in order to leverage economies of scale, while making sure business needs and customers are looked after in line with agreed Service Level Agreements (SLAs). However, organizations that continue to use siloed legacy systems often find that a lack of system integration means their SSC operations require significant manual processing.
The latent economies of scale mean that as part of a long-term strategy to move away from legacy architecture, the intelligent automation (IA) of SSCs can provide a particularly rapid return on investment, relieving manual processing and speeding up operational turnaround to cut costs. For minimal investment, IA solutions can mitigate a firm’s most intense resource requirements in a minimally intrusive way, ensuring business-as-usual operations.
While traditional robotic process automation (RPA) technologies, such as UiPath, are becoming common in financial services, the implementation of IA is underexplored.
IA builds on traditional RPA to automate business processes from end to end, rather than addressing specific tasks. For example, retail banking SSCs might automate the process that deals with customer statement requests by integrating a chatbot, RPA and data automation tool using a selection of tools and vendors (see figure).
The most common benefit from automating SSC manual processes is cost reduction, with the return on investment driven by the implementation costs versus the cost of manually performing the process. Further benefits include process standardization and improved compliance because virtual workers (i.e. robots) are more consistent, transparent and auditable.
Virtual workers are also better at performing work on demand as they are faster, cheaper and easier to scale to the required work volume. Where manual workers need to be trained and onboarded, firms can instead easily provision virtual workers through an automation platform. Ultimately, the firm can shift its human workforce towards more customer-focused, value-adding roles.
The key to realizing the benefits of automation lies in selecting and prioritizing the right processes to automate. This crucial task of ‘process discovery’ is usually performed by automation business analysts, who map out the process as it is and document the key process details. The inception of modern process mining technologies, which analyze data from an organization’s processes and automatically surface the key metrics, has been game changing in this area.
The processes most suited to automation are high volume, repetitive, and rules-based with structured input data, ensuring minimal human input will be required in the automated solution. As an example, Capco has worked with a Tier 1 global investment bank to automate the internal approvals of employee trade requests, saving 1,200 out of the original 1,700 employee hours annually, a 70% improvement. We assisted the same bank to meet a regulatory requirement to offboard over 30,000 clients across 20 different legacy systems. This would have required more than 1,000 FTE and five weeks of processing time to complete manually, meaning 200,000 employee hours were saved.
Within financial and insurance services SSCs, many other high-value use cases can be identified including payments on account, payroll invoicing, customer refund requests, merchant onboarding, and suspense account reconciliations.
Beyond selecting the right processes and technologies for automation, value and scalability is best achieved through following best practices in implementation and governance. Automation implementations are most successful when underpinned by an automation center of excellence (CoE), typically comprised of business, IT, and risk stakeholders.
These stakeholders should oversee strategy and resourcing, the identification and prioritization of opportunities in the project pipeline, and the management of existing automation projects. They can also standardize and integrate the automation infrastructure and tooling.
IA can create significant value within an SSC. It offers attractive strategic and tactical solutions to the many business problems that arise from legacy architectures and manual business processes. However, it must be properly implemented, and this is best achieved through putting in place the right framework, such as a CoE equipped with the correct set of tools and best practices.