When is a “Robot” not robot?

The first time the word, "robot" was used in the 1920s, it described a humanoid machine; a type of autonomous automaton. Later, the word was applied to any programmable machine that performed a physical task typically done by a human being. Often the work was highly repeatable, or dangerous.

Recently, the term has been applied to computer processes, or programs, without a physical machine. Can it still be a robot?

"Robotic process automation" is a phrase that is rising in popularity. In this case, the "robot" is a program without a corporeal form. Importantly, though, the program has been designed to work with user interfaces to gather and input information. The analogy would be a robot programmed to produce a memo by typing on a typewriter, rather than communicating with a printer directly. One vendor in the robotic process automation space, Accenture, defines the phrase more broadly: "RPA refers to the use of technology to run processes or segments of processes on core business applications." By running on other core business applications, in their words, it does what "humans do."

So how does this help the financial services industry?

One common aspect of robots, both the physical and ethereal kind, is that they are used to replace humans for a given task. Financial services have long benefited from computer automation, but with many different programs and applications applied in the execution and recording of a single transaction, there remains an army of personnel involved in performing tasks akin to reviewing and shuttling information between them. This is the labor that is still involved in completing a transaction, measurable in man hours. Digitizing this labor provides a benefit through efficiency.

With its genesis in screen-scraping as a means to extract data when data feeds were not available, RPA has evolved to processing that data in such a manner that it completes a task. Automation and its efficiency has crept from the back-office into middle-office. Portfolio change propagation, model delivery and delivery rotation, voluntary corporate actions -- all are tasks that can benefit from RPA. For portfolio managers, this means that their shop will run even more efficiently, helping to direct resources to core strengths while providing a higher level of scalability.

As with regular program automation in the past, more complex tasks that are repeated with any frequency are likely to be replaced through robotic process automation, driving efficiencies ever higher, freeing humans to add value in other ways, and improving the bottom line.