Digital transformation? How you can protect yourself from process digitization failures

Digitalization is creating major challenges for the financial industry.

Customers demand digital information exchange, digital communication and product transactions. Banks and financial service providers are challenged by this to provide their products and services digitally, i.e. to transform them - the so-called "digital transformation". There is often a lack of actual transformation here. Instead, stationary, tried-and-tested business processes are reproduced digitally. This regularly results in unclear and inefficient processes. These are often only digitized in parts and have media discontinuities. Actual end-to-end digitization is lacking.

Many attempts at digitization fail when offline processes are reproduced digitally on a 1:1 basis.

An insurance company enables its customers to take out liability insurance online - fully digitally. For this purpose, it places advertisements on its own homepage. A direct link to the product offer is missing from the ad. Instead, it refers to the menu item to be selected. Once there, customers can find a wide range of insurance packages, some of which have modular modules. Once customers have decided, they enter their own data in an online mask and finally receive confirmation that the data has been saved and passed on. This data is then stored temporarily until a clerk in the insurance company's back office retrieves it - after being informed by e-mail - and prints it out. The printout is used to record the data in various systems. If individual data do not match, he creates a letter to the respective customer to request the remaining data or the data to be corrected. When he receives the data a few days to weeks later, he creates the insurance policy in the system and sends all the documents to the new customers.

Conclusion: True digitization looks different.

The example shows the weaknesses of this digitization attempt. The process is not planned from the customer's side, otherwise a direct jump to the product conclusion would be possible. The variety of possible product variations makes it almost impossible to conclude a deal without prior comprehensive consultation - an example of digitizing a stationary process without redesigning and adapting it accordingly - in other words, actually transforming it. The subsequent steps and, in particular, the printing and re-entering of data show the break between digital and no longer digital process flow. There is no end-to-end digitization.

However, a "real" digitization of the process is possible with a manageable number of process changes:

The insurance company first revises the process by re-planning it from the customer side and eliminating hurdles and detours. The online product range is significantly reduced after analyses show that more than 80 % of customers taking out insurance online choose a specific basic variant of liability insurance. All other combinations are chosen only extremely rarely. In the future, it will only be possible to take out two basic variants online. For more specific variants, stationary (or even medial) advice from advisors will be provided again in the future. Once customers have entered their data online, it could ideally be transferred directly to the legal database of all the necessary systems. However, this would require enormously high IT implementation efforts, as new interfaces would have to be developed, provided and maintained...

This is where RPA comes into play as a replacement technology

...In the future, a bot will take over the data entered by the customer and transfer it to all the required systems - without paper printouts, without errors and much faster than before. Instead of sending letters to customers, emails will be sent. Since the data entry screen for customers has been optimized beforehand and now contains mandatory fields and plausibility checks, the number of queries is reduced to a minimum. Only the final dispatch of the insurance policy is still carried out by a dispatch service provider.

The example shows how end-to-end digitization and thus digital (partial) transformation can be achieved with just a few changes. Here, RPA enables an enormous reduction in effort compared to major IT-related changes. The adjustments can be implemented much faster, so that a fast time-to-market is ensured and increasingly shorter change cycles can also be met calmly.

(Excerpt from Smeets et al. 2019, RPA in der Finanzwirtschaft, Springer Gabler, Wiesbaden).