Digital Labor Defined and Applied in Auto Finance

Digital labor technologies, like robotic process automation (RPA) and artificial intelligence (AI) have the potential to transform the delivery of processes in the front, middle, and back offices of financial institutions. While 44% of enterprise global banking, financial services, and insurance global enterprises surveyed by HfS and KPMG planned on making a significant investment in RPA over the next two years, its adoption is still just beginning in auto finance, based upon Fiserv discussions with major players in the market.

Defining Digital Labor

The appeal of digital labor technologies is clear. Enterprises are looking for technology solution that replace low-value routine manual processes conducted by humans that are prone to error and drive low levels of employee engagement. To succeed, however, digital labor solutions today must be easy to implement, drive rapid results, and provide an audit trail of activities. RPA, which today is the most prevalent form of digital labor, is a software that:

  • Allows business/IT functions to rapidly create software to mimic human agents
  • Automates and manipulates existing application software to perform the same way a person works with the systems
  • Gives routine, mundane tasks to the “bots”
  • Affords personnel the time to analyze and strategize on results, rather than spend time gathering data

How can a lender determine what business processes are suitable for digital labor in the form of RPA today? A process (or processes) is best suited if it:

  • Requires information from multiple systems to complete
  • Is manual and error prone
  • Can be broken down into smaller micro rules
  • Requires limited human intervention once initiated

Whereas artificial intelligence is a more complex form of digital labor that goes beyond the operation of routine business and IT process activity to make decisions and orchestrate processes.

Applying Digital Labor in Auto Finance

So, how do we think bigger about the opportunities for digital labor in auto finance? Many lenders might be surprised to learn nearly all processes from origination through complaint resolution can benefit from the application of digital labor. But it might be servicing processes found in a heavily regulated finance industry that lenders could see the most benefit by automating. When applied properly within servicing, robots can work tirelessly 24/7 increasing throughput and deliver results with 100% accuracy. They do exactly what they are programmed to do, eliminating the chances for error when communicating with borrowers and inadvertent missteps against highly auditable processes.

According to the HfS and KPMG research, finance and accounting, customer service, and industry specific processes like claims processing,are key processes with a link to auto finance servicing functions where businesses are focusing their adoption efforts to reap benefits. RPA can manage routine, mundane tasks such as:

  • Payments/payoffs processing
  • Account refunds
  • Reconciling financial data
  • Posting financial reports
  • Customer thru-bills

Other auto industry specific process that can be easily transitioned successfully to RPA include manual updates and notations performed to borrower accounts, high volume back-office tasks such as ACH setup, miscellaneous letters, return mail, extensions, and violation processing. Additionally, AI can think like a human but enhance customer service by transacting faster and improving service levels which drive the best possible customer experience.

Recent RPA pilots conducted by Fiserv in its business process outsourcing (BPO) services have already shown gains in these same servicing functions with an immediate increase in processing throughput of 80% and a 100% reduction of errors — proof of its value.

“With RPA software focused on the high volume, low complexity tasks, our associates have been more focused on the value-added activities which have resulted in a visible increase in their engagement,” said Brandy Bissett, Fiserv Product Manager for BPO solutions.

By allowing digital labor technologies to seamlessly connect and automate routine processes and tasks, you can deliver services flawlessly and free up staff to perform higher value tasks or develop them in new areas, driving up employee engagement. Operations can ultimately be more cost effective, efficient, scalable, and auditable. Lenders can take the next step by assessing their internal processes against the principles outlined and contact their service partners for guidance.

*HfS research in conjunction with KPMG, “State of Operations and Outsourcing 2017”

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