Insurance Investor: Can we ever reach 100 per cent automation, and would it be a good thing if we could?
Joseph Pinto: The new era of different industries’ automation (including asset management), means humans and machines working side by side.
While today automation is used more and more for productivity reasons, in a context of an asset management market/value chain transformation, there is a real opportunity to enable humans and machines to leverage and amplify each other’s strengths.
Automation is a good tool helping our operations team to focus on more value-added tasks, with an optimum reachable when effectively are mixed the manual tasks and automated tasks.
Insurance Investor: How challenging is it for operational leaders to implement automation?
Joseph: There are different challenges, from facing a continuous transformation in technology to cultural mindset as it needs to prove its worth by creating opportunities for both business and the human workforce.
"Automation improves the productivity and the wellbeing of the employees."
Culturally, it was initially a challenge because of fear of unemployment, but once employees understood the benefits, with a few proof of concepts, it became a fantastic leverage to focus on reducing the repetitive low added value tasks and increase the time for analysis and client centricity.
Other challenges we may face are next employees’ skillsets and new security protocols of different processes. But despite all, it improves the productivity and the wellbeing of the employees.
Insurance Investor: What are the pros and cons of automation?
Joseph: One pro is that it helps increase efficiency within a company—we have been using it in the business growth context, for example.
The new market context (fees pressure and the velocity of industry change as per the use of new technologies) makes it difficult to increase the head count so by automating some tasks we have realised that we can achieve more versus what we have been used to without adding new resources.
For instance, with our internal risk management reports, which have a risk budget allocation, before automating certain tasks, we could produce two reports a week with a full-time staff. After the automation of these tasks, we have moved from two reports by week to two a day. We could, therefore, benefit from these opportunities to produce more of these reports.
Some other pros are the stability of the process over time and the ability to gather information that employees have no time to do.
"Sometimes simplifying things has more power than even automation."
The cons are that you have to be careful of the way you use automation as it cannot be a systematic approach. There are processes that you shouldn’t automate - but should simplify or stop instead. You need to use your common sense so that if a process is still needed you can think about whether you can automate it and if so to what extent.
There are many situations where you think you may want to automate a certain task or process but it really would be simpler to just do it manually. Sometimes simplifying things has more power than even automation.
Also, you need to make sure that you have a continuity plan behind it in case your ‘robot’ doesn’t work. Be careful of which processes you would like to pick up into your RP programme, i.e. processes that are not too critical where if you were to have an I.T. issue you could still operate.
Insurance Investor: Do you see any automation trends developing over the next 12-18 months?
Joseph: The thing about automation is that it is just a robot with no brain, it can only replicate the processes that you ask the robot to do. The robot won’t try to find an alternative route if the defined
route you have given doesn’t work.
This means that by adding to the automation an AI element, you can have more useful information, which could be irrelevant in terms of automation alone.
This is a trend that we have seen in the past and one that we will see in the future. And I am sure that in the course of implementation we will face other challenges or situations that we will have to overcome.
Joseph Pinto, Global Chief Operating Officer, AXA Investment Managers, will be speaking at the Fund Management Operations Summit in November 2019. You can find out more and sign up for the event here.
