Human Robots: Will They Kill the Financial Services Industry?

May 5, 2016 by Susanne Sclafane

We have been publishing a lot of articles about machines learning to think more like humans. But does that mean that we have to make humans behave like robots?

The question doesn’t seem like a logical follow-up to the promise of computers learning to understand natural language, respond to customers, analyze undiscovered risk factors, and more. But in some organizations, robot-like behavior is being encouraged to lower expenses and speed activities that keep technology humming or even process accounting transactions.

Consider this description of two sets of humans being asked to work in machine-like fashion at financial services firms and in other industries. They are using the same knowledge transfer (KT) techniques and outsourcing firms that many P/C insurers are turning to in the name of efficiency.

First set: Long-tenured staffers who are asked to continue doing what they’ve been trained to do until remote employees take over their jobs. They put their emotions on the side when someone from a second group pulls up the office chair beside them to record every move they make—in handwritten scribbles, tape recordings and screenshots captured each time they click their computer mouse or they reach for their keyboards to type out instructions, numbers or codes.

Second set: Returning to a remote service center, the outsourcing team drags into the office at odd hours to begin assigned client tasks: Play tape, follow instructions, enter IT code or book accounting entry. Log the hours, request performance score. Repeat.

Here’s how worker from the first group at a manufacturing firm described part of the process in a New York Times article last year. (“Toys ‘R’ Us Brings Temporary Foreign Workers to U.S. to Move Jobs Overseas,” By Julia Preston, Sept. 29, 2015)

The 36-year-old accountant said the young [man] assigned to shadow her appeared to have no extraordinary knowledge of accounting. His expertise was in observing and mapping what she did.

“He was watching me like a hawk,” she said… “It took him a while to learn what I did.”

I offer these descriptions not as a critique of outsourcing or H-1B visa programs but instead as a reality check for executives in two areas.

The first area is employee engagement. Leaders are committed to building company cultures, connecting with their workforces and engaging individual employees in town halls and one-on-one skip-level meetings. At the same time, employee jobs are on the line as firms outsource, co-source, automate and otherwise transform their operations. And there is similar unease and job uncertainty as companies integrate cultures as a result of M&A deals. Is there a right way to keep employees in the loop as these changes are happening? Will your culture survive if you dismiss long-tenured employees for the reward of lower costs?

My second takeaway is buried in the description in the NYT article and similar ones from employees doing KT with people who “have no extraordinary knowledge” of the disciplines involved—just capabilities “in observing and mapping.”

Five or 10 years out, do the potential rewards still outweigh the risks? The first set of humans is gone and the second set is preparing financial statements, performing software application maintenance, securing IT systems, updating underwriting files, inputting claims information, FILL IN THE TASK.

Not all the tasks can make or break an insurance company but some are critical. Is a human robot right for the job?