Artificial Intelligence software could dominate call centres

So why is this of any relevance? Banking in general, in Asian and European markets is suffering from a persistent margin compression and lower Return on Equity- which has shrunk from mid-teens to now a single digit. One research Report by McKinsey states that Asian banks will have to find about 10 billion dollars of cost saves, merely to maintain their prior period ROE. 

One significant potential contributor is the deployment of Robotics in Process Automation (RPA) for banks. This is now well underway and in fact, 2016 has been a breakthrough year for Indian and global banks in this space. BCG says software robotics is about 16% cheaper than equivalent human workforce. 

Demonetisation has boosted digitisation among consumers while Robotics Process Automation in India will boost efficiencies in a big way. Robotics in Operations has already started to yield productivity gains of over 15% but this comes with the challenge of a substantial loss of roles. Despite this, it is pleasing that this automation is done by the staff themselves, not to them. In a recent survey, 80% of the respondents said they were excited to embrace RPA and Artificial Intelligence (AI), despite projections of loss of jobs exceeding 30% in the next 5 years. 

The other rapid evolution is the proliferation of Chatbots in 2016 alone. Chatbots are the new conversational interfaces for consumers to access services anytime, anywhere, anyhow. This interface can smoothly deal with images, voice and text – and that, combined with AI, is the future to fuel conversations between businesses and its consumers. In February 2016, Facebook Messenger had zero bots.  In July 2016, it had 18000 bots with millions of ‘conversations’. 

RPA is set to transform Banking operations and all predictable repetitive tasks.  This shift has started and is a great productivity booster for Indian and global banks, where close to 25% of the cost base is invested in such people-based roles. Process-based robotics is a key enabler to improve ROE in banks. Oxford University says about 40% of bank roles can be automated. Therefore, the sooner we can each learn new skills, not depend on our employer to re-train thousands of staff, and position ourselves in the new relationship-based world (as opposed to transaction-based), the better it is.

AI tools which are so widely available now to developers via open APIs is a gold mine and great opportunity for Indian software business and start-ups to commercialise quickly. Imagine a world where conversations through voice or text or image is well understood, interpreted and sensibly responded to, by AI and chatbot driven capabilities. This ‘world’ is round the corner.

The death of the human-based Call Centre business is no longer a far-fetched threat. As this unfolds in the next five years, India and Philippines stand to lose the most where potentially 1.2 million jobs are at stake. By 2020, all new entrants to the workforce will only be those who were all born after the Internet age. That itself is transforming customer behaviour. And if AI software can be trained to write more AI software, the boundaries of what is possible and what is ethical will be blurred. It is therefore an opportunity and a threat.