Automated Decisions ‘Cost More than One in Three Firms Money’

An automated decision made by a computer programme has cost 37% of organisations money at least once in the past six months, according to a survey by the Economist Intelligence Unit (EIU) on behalf of Ricoh. 

Entitled ‘Humans and Machines’, the EIU/Ricoh study, conducted in November and December 2012,also found that nearly one third of the 432 senior executives from all industries, including healthcare, manufacturing and 63 from financial services (FS), think that they have also lost customers as a result of an automated decision. Just under a third of those questioned agreed with this statement. The research purports to show the impact of technology upon human creativity, intuition and business practices.

“The findings highlight the need for urgent action,” said Carsten Bruhn, executive vice president (EVP) of Ricoh Europe. “Automated processes can bring significant benefits to the industrial and FS sector, but while technology may provide high intelligence, it is essential that the processes used are reviewed and updated regularly by humans [i.e. business experts]. This ensures compliance with regulations, and that security standards, efficiencies and good practice are maintained.  When processes are optimised and systems are connected, a collaborative and creative working environment is enabled to better meet client needs.”  

The senior C-level executives questioned thought that human intervention remains essential when it comes to interacting with customers (46%) and managing risk (31%), with the FS sector and other finance professionals such as treasurers, especially strong in this response.  Asked where human imagination or intuition was most critical, and machines were less necessary, only 8 % said managing regulations, while 6% said automated machine-driven decisioning was critical for information security.

The highest rated challenge for the finance and FS sector (48%) when dealing with technology is its ability to connect systems with each other, especially cross-border.    

“Keeping up with the pace of technology change and ensuring on-going connectivity across systems isn’t easy,” said Bruhn. “We know that technology is evolving more quickly than the processes or ways to use it.  To successfully create connected systems, the finance and FS sector should focus on process optimisation and make changes to traditional ways of working. Increasingly, executives are outsourcing the management of these tasks to third party experts, meaning they gain all the benefits while freeing up employee time to focus on core business activities,” he added.

Other findings include:

  • Seventy-one per cent of respondents agree that technology in isolation, without a process to connect it, delivers little value. 
  • Eighty-six per cent said that human-technology interaction will only add value if the processes used to connect them are more creative, suggesting an integration and optimisation challenge. 
  • Forty-one per cent said their team’s best innovations of the past three years could not have been delivered without supporting technology, and 30% said they could not even have been conceived without it.
  • Seventy-eight per cent said that technology helps their business to be more productive, as it should to justify the often large upfront capital expenditure or on-going fees of Software-as-a-Services (SaaS) deployments. Crucially, technology does not yet appear to be taking over key activities such as decision-making or developing innovative ideas, according to the respondents with the ‘dumb machine’ idea of automating processes only still prevalent. 

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