Automation - Boon or Bane?

Having worked for 5 years in an IT firm for the finance industry, I cannot help but see automation from both sides of the coin. Financial institutions, since the turn of the century, have embarked on a cost-cutting imperative in order to boost their profit margins. The banks embraced technology wholeheartedly; catch-phrases like 'STP' (Straight-Through-Processing) were coined, to illustrate the ability of using technology to process trades from cradle to grave without manual intervention. The end result is increased productivity and more time or effort can be placed on eliminating exceptions to the well-oiled transaction process.

This increased automation of the finance factory invariably lead to job losses and also increased demand on highly-skilled workers who are both conversant in finance and technology. The increased faith and expenses in technology no doubt provides many rewards but most are oblivious to the dark side of this increased addiction to automation.

Increasingly, I noticed that the concept of STP is hijacked and many users are using this term loosely, relentlessly trying to increase their automation rate across all processes as much as possible. Automation works fine if processes follow a fixed and orderly path. Exceptions from this path can be easily identified and eliminated. However, if in the first place, the path is not predicable, and if there are thousands of possible credible outcomes, any effort at automation will be costly and dangerous.

I recalled an encounter with a client who was happily recounting their efforts at increasing their STP rate. As we dived deeper into their processes, it became apparently that there are some exceptions which are not captured and have serious implications. Jokingly I cracked up, "Yeap, looks like you have STPed your problems as well".