NEW YORK--(BUSINESS WIRE)--Financial services companies in North America could unlock up to US$140 billion in productivity gains and cost savings by 2025 if they employ new technologies that help improve the efficiency and effectiveness of their workforces, according to a recent study by Accenture (NYSE: ACN).
The study — Workforce 2025: The Financial Services Skills & Roles of the Future — shows that disruptive technologies that augment human expertise, creativity and skill with real-time information and new capabilities or automate routine tasks and processes will change the shape of the financial services workforce over the next five to 10 years.
According to the study, up to 48% of tasks in the financial services workforce could be augmented with technology by 2025 to increase productivity. For example, artificial intelligence (AI) and other technologies could help financial advisors make personalized real-time recommendations and help loan officers determine default risks more accurately. The study estimates that augmentation could help banks, insurers and capital markets companies generate productivity gains of US$59 billion, US$37 billion and US$21 billion, respectively. However, the study found that many firms still lack a coherent and strategic approach to reimagining customer experiences, work and the workforce for a more digital and human-centric future.
“There’s a new era ahead for financial firms that see the value of combining human ingenuity and personal touch with technology efficiency and precision to create new sources of growth — and at a time when companies are using automation tools to drive greater value, responsible leadership is key to building trust,” said Cathinka Wahlstrom, who leads Accenture’s Financial Services practice in North America. “This isn’t about cutting costs to improve the bottom line, it’s about embracing technology to transform the workforce. Banks, insurers, and capital markets firms should continue to invest in teaching their staff new skills and new ways of working.”
With a scarcity of digital, data and cyber skills available in the market, companies need to make reskilling an imperative, the study found. Reskilling employees — instead of simply recruiting — can deliver immediate value. In addition to reducing costs and capturing efficiencies, augmentation and automation can free-up time that can then be refocused on high-value work such as innovation, customer relationships and offering development.
"The leading financial services firms take a holistic, cross-functional view of the roles and functions in the enterprise to understand where they can drive the most value — focusing on the roles best suited to technology augmentation and automation and that offer the most potential for rapid and sustainable return on investment,” Wahlstrom said.
The report also notes that financial services firms have made large productivity and efficiency gains by automating tasks such as data entry, gathering, and processing as well as account reconciliation. Going forward, 7%-10% of tasks could be automated, generating additional cost savings of US$12 billion for banks, US$7 billion for insurers and US$4 billion for capital markets firms.
“Rather than removing the human touch from financial services, technology can enable organizations to offer more personalized and more human experiences at scale and improve their ability to innovate and grow into new areas,” said Bridie Fanning, a managing director at Accenture who leads the Talent & Organization group in its Financial Services practice in North America. “By automating tasks in both the front and back office, financial services companies can provide employees with meaningful work and develop client relationships that are characterized more by human ingenuity than routine transactions.”
The report concludes that advanced technologies will bring profound change to how financial institutions manage their workforces and interact with consumers. Apart from the potential displacement of some jobs, issues such as how algorithms are used to make decisions that affect humans and the way employees’ data is gathered and leveraged in the workplace are beginning to attract scrutiny from lawmakers and regulators. Against this backdrop, organizations have an opportunity to turn transparency about people issues and responsible use of AI and data in the workplace into a competitive edge.
Accenture Research sourced employment data for the North American financial services sector from O-Net Online and calculated base cost-saving scenarios for automation and aligned job function data with specific job clusters. Forecasted changes in industry employment (growth and replacement of jobs) through 2026 were calculated using Bureau of Labor Statistics 2017 data, and projected future costs in dollars per hour and average salary were calculated using the assumptions of forecasted inflation data from the International Monetary Fund. The low scenario for augmentation is based on assumptions derived from the World Economic Forum’s “The Future of Jobs Report 2018.”
Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions — underpinned by the world’s largest delivery network — Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 492,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.