Investing in the New Reality

EMERGING TECHNOLOGIES | BDO LLP

08

07 EMERGING TECHNOLOGIES | BDO LLP

ROBOTIC PROCESS AUTOMATION (RPA)

‘But while some sectors have been hit really badly by the pandemic, areas like enterprise software continue to perform really well. I think any SaaS company with a path to profitability and a focus on sustainable growth is going to be increasingly attractive and sought after. I’m a huge fan of enterprise software with just a focus on selling to financial institutions. AI companies that help large organisations to sell more or reduce their costs are going to be mission-critical. ‘I also think that wealth management and financial advisory is undergoing its own transformation right now. We see consumers getting to new types of investment for the first time, especially in countries like Brazil, and you have Gen Z-ers experimenting with robo-advisers and day trading. So any tool that can give financial advisors an edge and help them sell new investment products to younger millennials could be worth looking at.’

to help us improve those business lines – and effectively help some of these retailers almost become FinTechs! It’s been a pretty interesting few months, to say the least. ‘In terms of the appetite for investment in tech, I think some investors are still going to continue to look at moonshots, especially in key categories such as blockchain, 3D printing and robotics. But right now, a lot of these tech investors are being a little more pragmatic. ‘They’re looking at product-market fit. They’re looking at stickiness of revenue. They’re looking at profitability, or at least path to profitability. Some are leaning more on the debt side of things versus making equity investments. They’re asking for maybe more onerous terms and are really having a level set on valuation.

RPA software is at work in pretty much every industry, but big adopters include banks, insurance companies, other FS institutions, telecom businesses and utilities – especially where organisations have cumbersome legacy systems and are keen to accelerate towards digital transformation. Healthcare is another key area: some 50% of US healthcare providers are planning to invest in RPA over the next three years, according to a 2020 Gartner survey . The market for RPA was worth an estimated $1.1 billion in 2019, expected to grow at around 34% over the period 2020-27, and estimated to reach $7.2 billion by 2025, according to Grand View Research . But a July 2020 report by Pod Group , an IoT company, suggests that this growth could accelerate still faster, with almost three-quarters of business leaders in the UK expecting to see a new wave of automation in the workplace. According to the most recent Deloitte RPA survey,

in response rate for premium cards over the bank baseline, and an 18% lift in credit card sales conversion rates. ‘A key development in the wake of COVID-19 is that there’s going to be a record-setting level of customers all over the world defaulting on their credit or loan obligations. What we’re doing with customers right now is analysing and making a prediction on which one of those consumers is at a high-risk classification of defaulting, and trying to take actions to prevent that from happening. We’re doing that at scale with millions of customers, which previously would have been impossible. ‘The other thing I’m seeing with AI in the wake of COVID-19 is that a lot of the large retailers who have virtually shut down their physical stores are now having to focus on these separate non-core businesses where they sell credit, loan and insurance products. We’ve been getting an increasing number of requests

RPA typically covers software that is programmed to automate repetitive manual tasks that would otherwise need to be carried out by employees, so freeing them up to focus on more strategic or creative aspects of their work. As Gartner defines it, ‘RPA is a combination of user interface recognition technologies and workflow execution that mimics the mouse-clicks and keystrokes of a human to drive applications and execute system-based work.’ RPA might be used to carry out repeated tasks such as data entry; performing multiple tasks across interconnected systems, for instance in processing transactions or compiling reports; transferring data between different systems without the need for new infrastructure; migrating data; updating financial statements; and mining and cross-validating data between different sets and systems. It supports faster delivery, execution and scaling of operations.

THE MARKET FOR RPA WAS WORTH AN ESTIMATED $1.1 BILLION IN 2019 , EXPECTED TO GROW AT AROUND 34% OVER THE PERIOD 2020-27, AND ESTIMATED TO REACH $7.2 BILLION BY 2025 .

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