Why is hyperautomation a CFO mandate?


Narendran Thillaisthanam
Narendran Thillaisthanam

Harness the power of hyperautomation to meet operational goals, whilst ensuring employee productivity

By Narendran Thillaisthanam

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Published: Thu 12 May 2022, 12:07 PM

The pandemic has disrupted several industries, including the financial sector. Ray Wang, the principal analyst at Constellation Research, said: “Since the year 2000, 52 per cent of the companies in the ‘Fortune 500’ have either gone bankrupt, acquired, ceased to exist, or dropped out of the ‘Fortune 500’.”

Close to 228 companies filed for bankruptcy in 2020 within the banking and finance sector in the US. In other words, one in two companies has dropped off the cliff in the last 20 years. At the same time, technology has been a significant driver of these changes. This article explains the nature of technology disruptions and how companies can use hyperautomation to stay ahead of the competition. Today, most organisations are confronted by forces of digitisation, digitalisation, and digital transformation.

In the post-pandemic world, digitisation is the foundational technology that has made the seismic shift of work-from-home possible. Digitalisation is the next step in the organisation’s evolution. It optimises processes and takes advantage of the underlying digital assets. Consider an invoice processing. Extracting the details in digital invoices and processing them manually is very time-consuming. Instead, using the document AI or OCR can reduce the cost of operations and free up employees’ time to focus on higher value-added tasks. Digital transformation (DT) is the capstone of the three-step process. DT often comes with a business model transformation and enables organisations to position at the top of the food chain. For example, in the banking industry, mobile-devices-assisted digital payments threaten to disrupt well-established payment systems such as cheques, demand drafts and credit cards.

To counter this, a bank will need to respond to these threats either by adopting alternative payment methods or by introducing a new approach. Either of these will require the bank to ‘transform’ how they conduct business. Incremental innovations or optimising processes alone cannot effectively respond to such threats.

What is hyperautomation?

Hyperautomation is the framework that gives organisations the ability to stay ahead of such digital disruptions and achieve their digitalisation and digital transformation journeys. By industry definition, “Hyperautomation is a business-driven, disciplined approach that organisations use to identify, rapidly vet, and automate business and IT processes. It uses several emerging technologies like AI/ML, robotic process automation, business process management, internet of things, and blockchain to automate processes end-to-end.”

Hyperautomation brings in a culture of ‘automation-first’ where participants bring the right technology to rewire and automate processes end-to-end. Organisations may have to work with internal employees, suppliers, customers, and regulators — sometimes with all of them simultaneously.

Hyperautomation in finance

The financial sector is ripe for automation. Hyperautomation can automate many financial processes such as order to cash and procure to pay. The World Economic Forum estimates that close to 43 per cent of time spent in the finance and insurance industry could be automated, and the bots are taking note of this. It’s high time organisations start leveraging hyperautomation. Similarly, AI/ML technologies play a critical role in fraud and dispute management, and they can prevent fraud even before it happens. Banks can onboard customers in less than 15 minutes without visiting the local branch. Similarly, banks can also automate a significant portion of loan processing by moving towards self-service. Low code platforms aided by AI/ML algorithms and BPM technologies can auto-verify the application for accuracy. These systems can even score the applicants based on their spending history, income potential, and credit rating.

In fact, for low-value loans, these new automated processes can even approve (or reject) the application, freeing up the loan officer to deal with higher-value operations.

During the pandemic, digitisation helped organisations lay the foundation for a new future. Companies, without just stopping here, should move to the levels: digitalisation and digital transformation. Companies with high degree of financial processes should consider hyperautomation a critical lever to stay competitive and get ahead within the industry.

— Narendran Thillaisthanam is CTO at Vuram

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