Written by Craig Evans
Posted on 22/09/2017

Software Robots and the Credit Function

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By Craig Evans, Head of Business Development at Graydon UK

Many people are frightened that computers are going to take over their jobs. Ever since the financial crisis in 2008, we’ve seen an increase in the use of software robots – applications and algorithms which automate the gathering and analysis of huge volumes of data – and a corresponding drop in head counts. For businesses it’s a way of reducing staffing costs while providing its decision-makers with better quality information.

If you’re a credit manager or analyst, this might make you fear for your own job. And, indeed, if you are unwilling to adopt new ways of working, your fears are well-founded. In the next five to ten years, many of the human-centric activities of the credit function will be automated. However, those who position themselves well will still be able to increase their value to the organisation. The important thing is to develop expertise in areas where human interpretation is still a valued skill.

Three areas spring to mind immediately – fraud, regulation and compliance, but there are bound to be others. Credit managers and analysts who acquire a working knowledge of some or all of these areas will be in a strong position to interpret the cold algorithmically-generated analyses. Just as a physical robot performs repetitive tasks precisely and tirelessly, these software robots are able to crunch masses of data quickly, thoroughly and accurately. You and they could work in partnership. This way, you create a future for yourself. The alternative is to stagnate and eventually become sidelined.

You probably have contact with training organisations that can help you develop your skills in areas that will be valuable to your organisation. CICM is an obvious choice. Maybe less obvious is a credit reference agency.

Perhaps it’s time to take a cold look at the activities of your department and consider which elements are rote-based, especially if they involve analysing or processing data. Now consider what work takes place around this which still requires human intellect and skill. It may involve the capture, interpretation and processing of raw data before it enters the system. Or it may require the interpretation of the results coming out of the system. If you or your team are developing your skills in these areas, you are still delivering important value to the organisation. This is not a one-off exercise – as software robots become more sophisticated, you will need to review your human uniqueness to stay ahead of the game.

A useful way to compare your talents with those of the software robots is that they are only able to deal with known risks while you are able to unearth hidden risks revealed by unusual patterns in the their outputs.

So far, we’ve talked about in-house credit management automation. You will know that much of the information you work with from a credit reference agency has already been pre-digested and processed using software robots blended with human intelligence. Perhaps their systems could be used to process your own data. This might appeal to smaller companies who can’t afford their own sophisticated computer systems or it might appeal to the larger organisation with masses of data which can be mined for even greater value.

The amount of automation the credit function will continue to increase while the FTE (full-time equivalent) head count in the same department continue to fall. If you need statistics, try this: Carl Frey, co-director of the Oxford Martin programme on technology and employment at Oxford University, recently reported on some research which predicted the impact of automation on jobs currently paying over £40,000 p.a. One of the biggest losers is the Credit Analyst. Frey says that they stand a 97.85% chance of losing their jobs to automation. What a sobering thought.

Some credit function employees are simply going elsewhere for fresh opportunities, but if you like it where you are, perhaps this article has given you some useful ideas about your next steps.