Intelligent automation could add up to US$512bn to global revenues in the financial services industry by 2020, according to a Capgemini report published this month. It says that with the right combination of robotics process automation (RPA), artificial intelligence (AI), and business process optimisation, the next couple of years could see some exciting change in the sector – with new technologies being implemented not just to drive down costs, but to grow revenue through new customer experiences, and to keep pace with new non-traditional players in an evolving service provision landscape (nearly half suggested that BigTech players, such as Amazon and Alphabet, will be their competitors in the next five years).

The numbers are compelling. The report suggests that already 35% of financial services firms have seen an up to 5% increase in topline growth from automation, with faster time-to-market and improved cross-selling efforts as the key factors influencing gains. RPA deployment alone could help businesses realise a 10% to 25% increase in cost savings, potentially scaling to 30% to 50% with AI-enhanced RPA.

Despite this, adoption of intelligent automation has been slow, with only 10% of companies having implemented the technology at any scale. But for the most visionary and sophisticated, hundreds of billions of dollars in automation-generated revenue is up for grabs over the coming years, if Capgemini’s report is on the money.

Others say the real benefits will take much longer to materialise, but not so long that industry can rest on its laurels. “In my opinion, the evolution of automation in financial services will be very similar to the automotive industry revolution in the 70s and 80s,” opines head of Swiss Re’s Robotic Automation Centre, Jose Ordinas. “The role of humans in processes will dramatically change and [will] focus on things that humans are much better at – in terms of design and problem solving ... leaving the repetitive rules-based stuff to the robots. Though it won’t happen in two years, I also know it’s not going to take 20 years.”

But, as lawyer Mark Deem writes in this issue, for AI to have such a transformational impact, the right regulatory framework needs to be established. He believes one of the key issues is algorithm accountability for when things go wrong; and stresses the importance of ensuring that humans have the ability to override AI decisions and maintain control “because algorithms are created by people and everyone has inherent bias and can make mistakes, unintended and negative consequences could result from artificial intelligence”.

There were echoes of these concerns in a speech delivered this month by Financial Conduct Authority chair, Charles Randell. “Algorithms decide which insurance and savings products you are offered on price comparison websites; whether your job qualifies you for a mortgage; perhaps, whether you are interviewed for your job in the first place,” he said. “Some have said that in the future we will live not in a democracy, where the citizens decide how we are governed, nor in a bureaucracy, where officials like me decide, but in an algocracy, where algorithms decide.” Whilst optimistic about the potential of advances in data science, he warns that there is no room for complacency when it comes to governance.

As Randell put it: “If we can combine these skills with fair standards and with public trust, we can maximise the opportunities for the UK finance industry to succeed in the global market.”

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