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Automated business process outsourcing soars

“Hired” machines replacing humans

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  • Written by  Website Staff
Automated business process outsourcing soars

From 2011 to 2014, the inclusion of robotic process automation in banks’ business process outsourcing contracts rose 63% while revenue grew 30% and full-time equivalents (FTEs) grew only 14%, says research by the Everest Group.

As the role of digital banking increases, service providers are looking to automate transactional processes and shift focus to more judgment-intensive offerings. However, increased digital adoption and maturity of automation solutions is leading to lower FTE requirements for the industry, prompting service providers to look for other avenues of growth.

“Increasing use of automation and digital channels across all banking lines of business reduces FTEs needed for transaction-based activities,” says Anupam Jain, practice director at Everest Group. “Service providers are capitalizing on those opportunities to move up the value chain to deliver more complex services, such as risk management, regulatory reporting, and analytics.”

Other key findings:

• The market for third-party BPO in banking crossed the $3.5 billion mark in 2014, growing at a compound annual growth rate of 8% to 10% over a period of four years.

• Recovery in growth rates was driven primarily by reduced mortgage rates and higher outsourcing in the commercial banking segment.

• New contract signings is the major driver for BPO adoption, while renewals continue to remain strong as buyers prefer to continue with their existing providers.

• Regulatory pressures and risk management concerns continue to be a driver of growth of BPO services.

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