Robotic Process Automation (RPA)

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lead to the property insurance industry to be a seller’s market. When AI technology has developed to a new stage, the insurance industry’s current business model might be changed. For example, sharing economy is one of the most well-known examples to use

disruptive innovation to threaten the existing market, such as Uber and Airbnb. In this context, it may lead the market to a winner-takes-all market or an oligopoly, which might have only a few insurance companies for customers to choose their services. Therefore, in this circumstance, the non-life insurance market might become a seller’s market.

 The last probable disadvantage of using AI in the insurance sector is that it might lead to some customers not able to buy the insurance policies they need. An insurance company using AI can help this firm to distinguish what risks it would like to take and exclude those risks that do not want to accept. In the scenario that might increase more

exclusions in an insurance policy, it might scarify customers’ rights to buy the insurance policies they need.

4.1.4. Robotic Process Automation (RPA)

Robotic process automation or it also knows as RPA, is a kind of software that can help humans to deal with repetitive data-driven tasks. RPA can run on the other systems or applications, whose primary purpose is to increase the business process via automation. According to the Institute for Robotic Process Automation and Artificial Intelligence [IRPA AI] (2019), “RPA is the application of technology that allows employees in a company to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses, and communicating with other digital systems” (para.

3).

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In general, RPA can be used in any industry, such as the financial industry, the insurance sector, or the high tech industry. Lacity and Willcocks (2016) found that RPA is suited for in the “shared services” to achieve business benefits, and it is an ideal method to replace human beings to deal with “swivel chair” processes. According to Lacity and Willcocks (2016), the definition in their study of the shared services is from Accenture Public Limited Company [Accenture] (2005), which is:

The consolidation of administrative or support functions (such as human resources, finance, information technology and procurement) from several departments or agencies into a single, stand-alone organizational entity whose only mission is to provide services as efficiently and effectively as possible. (p. 3)

Besides, Lacity and Willcocks (2016) described “swivel chair” processes as:

A human being sitting in a swivel chair at a workstation and taking in work from many electronic inputs (like emails and spreadsheets), processing them by accessing more systems, and then updating the completed work to yet other systems, like ERP or CRM systems. (p. 14)

Therefore, if a company or an organization’s major tasks meet three conditions, it could consider introducing RPA to increase operational efficiency, which is repetitive, highly manual, and rule-based.

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The benefits of adopting RPA in a company or an organization can be separated into the following points:

 The first advantage of using RPA is that RPA is easy to use. It does not need to recruit new employees with coding skills or programming experience. Thus, companies use RPA could consider training their current employees and creating an RPA center of excellence to ensure companies can take advantage of using RPA.

 The second advantage of using RPA is that RPA can operate in existing systems or

applications, which means that using RPA does not need to install a new platform to use it.

 The third advantage of using RPA is that RPA could increase operational efficiency and improve accuracy. RPA can follow the rules to deal with repetitive tasks that are done by humans. People might feel bored doing the same things during a period or a long day.

With RPA, this software can deal with assigned tasks 24/7 because robots do not take a vacation or feel tired. Moreover, some professional or strategic tasks need employees to concentrate on handling them. In order to ensure the quality and accuracy of those tasks, RPA could help employees to achieve this goal.

 The fourth advantage of using RPA is that it could help to realign the workforce. RPA could help a company to free up its employees. Therefore, employers can assign their employees to deal with strategic activities to increase productivity.

 The last advantage of using RPA is that RPA could improve governance and track audit history. A company uses RPA to help this company to meet regulatory compliance because RPA will follow defined rules to deal with tasks. Therefore, it is easy for IT

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workers, users, and auditors to check each step of tasks. In addition, auditors can quickly help the IT department to adjust rules for RPA in order to meet regulations and

compliance.

However, RPA has its limitations. RPA only can deal with information in a digital form.

Besides, RPA needs to follow rule-based or defined rules to process tasks. Therefore, in order to enhance the effectiveness of the traditional RPA, it is suggested that adopting RPA and artificial intelligence at the same time or digital automation tools like optical character recognition (OCR) to overcome the limitation of the traditional RPA. Also, AI can learn

from RPA when RPA deals with tasks, which can help AI to improve the RPA’s effectiveness.

Therefore, RPA and AI could be regarded as complementary to result in better outcomes of business process automation, not just collecting data or information to make spreadsheets or reports. The combination of AI and RPA might be the best strategy to maximize the return on investment, leading to the end-to-end process of offering predictive analytics and making suggestions.

As Osinubi (2018), a report of PwC, pointed out, the RPA and AI technology continuum can be divided into five types, which are (1) macros and scripts, (2) business process automation (BPA), (3) robotic process automation (RPA), (4) intelligent process automation (IPA), and (5) algorithmic business (see Figure 2 below). Hence, based on PwC’s AI technology continuum, it shows that using RPA belongs to the current state or be trending. Intelligent process automation or it means that combining RPA and artificial intelligence technologies might be a future trend.

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Figure 2: The RPA and AI technology continuum

Source: PwC (2018), Looking into the Future: Leveraging the Power of AI and Robotics