Intelligent Automation

Financial firms must capitalise on the delay to IR35 reforms

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Recent circumstances have seen the government postpone its planned IR35 reforms for a year. For many underprepared businesses, this may come as a blessing in disguise. At the end of 2019, 71% of respondents to a Sullivan & Stanley study of 500 organisations said they were unaware that the IR35 changes were coming into effect.

Banging square pegs into round holes achieves two equally counter-productive things: it destroys the peg, and demolishes the hole. This is the mess that could be left for the majority of financial services companies in the wake of the upcoming IR35 reforms. These reforms could leave financial firms scrambling for indispensable expertise—but you can avoid that

The simplest way to explain the potential damage caused by IR35 reforms is that it will make it harder for businesses to secure the right expertise (or ‘the pegs’) for the right projects (the ‘holes’). The implementation of tax rules relating to off-payroll working for clients and contractors has already had a ripple effect across the financial industry, but the 2021 reforms could be a tipping point.

The commercial and administrative burdens on employers hiring certain types of contractors will shoot up, with new obligations forcing businesses to review their contractors, examine who fits in where, and try to prevent their best off-payroll workers from seeking better arrangements elsewhere. If firms aren’t prepared, they’ll soon have to start cramming round pegs into square holes – the pegs being junior, under experienced professionals, and the holes being high-stakes roles like compliance specialist. Even worse: they’ll run out of pegs altogether. 

With the 2020 reforms now just around the corner, businesses are finally waking up to smell the coffee. Respondents to the Duff & Phelps Global Regulatory Outlook 2020 report identified “the war for talent” as the top business risk of 2020, and this will only be exacerbated by a post-pandemic race for talent.

The real question now is, when faced with the brain-drain ‘double whammy’ of IR35 and Brexit, how will financial institutions retain their invaluable expertise when specialist contractors are walking out the door? 

Subject matter expertise in short supply

Many financial firms have consistently found success in bringing in flexible contractors with specialist skills for certain projects. But the new round of IR35 reforms are set to dry up the supply of such accessible subject matter expertise. Information Age found that 67% of HR professionals predict it will be harder to recruit the necessary skills for their organisation, while 59% of freelancers in a Brookson Legal survey said they will consider jumping ship if considered for IR35. Financial services firms should take it as warning that HMRC suffered a brain drain when IR35 was implemented in the public sector. Some government departments lost up to 40% of their IT contractors according to Computer Weekly.

Project delays and escalating costs will be the result of the ensuing forced replacements. Managers won’t need telling that the average cost per hire is almost $4000 as estimated by Deloitte – not to mention the onboarding administration work required. Then there’s the untold cost of losing knowledge specific to your business: the intangible, nuanced stuff; the ‘special sauce’. How to replace an experienced fraud officer who knows the ins and outs of your company’s fraud profile, or a compliance officer who can distinguish all of the grey shades of your risk appetite?

Unless financial institutions find a way to capture and productise the expertise held within the minds of these specialists, their UK businesses will be especially vulnerable when those specialists are squeezed out by newly stringent tax rules.

2020 plans in need of shake up

This is why businesses need to take a red pen and incorporate intelligent automation into their 2020 calendars – and by ‘incorporate’, we mean ‘replace the part about trying to secure specialist expertise’, which is currently scheduled indefinitely for April onwards.

Nuanced know-how needn’t be siloed in one place, or under one hat: with valuable expertise made consistently accessible across the business, project managers and heads of departments have less reason to flounder in search of the right people for the right jobs. Round pegs, round holes.

Download our full eBook below: we outline the regulatory risks of 2020, and explore how financial institutions can avoid the impact of a forecast talent exodus. 

Download the eBook: Overcoming financial regulatory bloat
Learn how to keep financial expertise in your organisation (even if the experts are leaving), so you can automate and scale compliance operations.

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NHS deploys Rainbird’s intelligent automation technology to relieve COVID-19 pressure

NHS Norfolk and Norwich University Hospitals
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NHS deploys Rainbird’s intelligent automation technology to limit unnecessary self-isolation by staff

Rainbird has partnered with the NHS, which is using our rapid deployment programme to build an online, interactive tool that provides tailored advice on appropriate self-isolation measures to NHS staff. 

The tool, which was developed to address the staff resourcing challenges currently faced by the NHS, can be updated within minutes to reflect shifts in national guidance, and personalised to NHS organisations. This partnership follows an open letter from the Rainbird CEO offering its technology free of charge to those supporting vulnerable individuals during this time.

The tool, which is currently being used by the Norfolk and Norwich University Hospitals Foundation Trust (NNUH), will help hospital services to manage their staff resourcing challenges. It will also provide appropriate next steps to those with COVID-19 symptoms by combining NHS and government guidance. The tool is also being extended to give advice on which workers to test for COVID-19.

The tool requires staff members to enter identification credentials, before being taken through a series of questions on the presence of symptoms and how long they and other members of their household have experienced them. Staff are instantly provided with a PDF document that can be presented to their supervisor and explains guidance created specifically for that member of staff.

Dr Robert Hardman, Consultant in Occupational Medicine at NNUH, said: “This is a vital tool for a number of reasons – not only does it help to protect front-line staff and their colleagues in this time of great need, it will also significantly reduce pressure on occupational health services by giving staff another option for support if they develop symptoms.”

He continued: “Unfortunately, there is still some confusion around how the guidelines on self-isolation apply to NHS workers, which could lead to preventable infection and added strain on our service by longer than needed isolation. This resource will remove that uncertainty and allow staff to inform their line manager they will be absent in one seamless process.”

James Duez, CEO of Rainbird, commented: “We are fully committed, at an individual and organisational level, to doing all we can to support those combatting this global outbreak. Especially our NHS. Our flexible technology can be quickly adapted to suit the nuanced and complex individual circumstances of NHS workers, effectively turning what would be a software development task to a clinical one and markedly streamlining operations.”

“Already, we are planning other forms of support, including a comprehensive risk assessment for staff, taking into account pre-existing conditions, their ability to wear PPE and other factors. We see immense potential for this tool, something reinforced by approaches Rainbird has had from other organisations seeking to push this technology to other countries, including those within Africa where the disease and preparedness is tracking some weeks behind the UK.”

A public version of the NHS tool is available now via this link.

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Vulnerability in banking: technology must represent the dangerous ‘grey area’

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Look to your left. Now look to your right. Statistically speaking, at least one of these people is currently financially vulnerable. 50% of UK adults display one or more characteristics of being potentially vulnerable, according to latest FCA statistics.

While it may not always appear obvious on the surface, and though some of us may not be aware of it, we are all on a spectrum of financial vulnerability. Of course, there are degrees of extremity. The worst examples are heartbreaking cases of deceit and neglect: a fraudster exploiting the trust of an elderly Alzheimer’s suffer for £15,000; scam pension schemes taking £13.7 million from their victims.

But beyond extreme cases, there is an ocean of grey area. Depending on circumstance, financial vulnerability could include all of us. Even the subprime crisis that led to the 2008 financial crash could be viewed through this lens; it involved banks granting loans to people who couldn’t afford them. 

The nuanced cases are what banks need to get better at identifying when assessing a customer’s potential vulnerability. Not only for our safety, but also for our financial literacy and financial wellbeing. The demand for better, more personalised financial guidance from banks is increasing; four out of five students say they are not taught enough practical money lessons in schools.

With post-Brexit downturn on the horizon, and news of the latest economic blow courtesy of coronavirus, we may as well call a spade a spade: the economic forecast right now isn’t looking too rosy. Wages could well stagnate, and the cost of living may rise. Many more people could indeed slide further up the financial vulnerability spectrum and be in need of better guidance from their payment providers.

Vulnerable people don’t benefit from blocked transactions and invasive phone calls from bank operatives; they benefit from frictionless transactions and intelligent recommendations. Knowing when and how to contact potentially vulnerable customers is key, and that can only be achieved at scale with a decision-making system capable of identifying the right protocol for the unique contexts of each customer.

For any banks that fail to provide this, there are a host of challenger banks already turning heads with superior personalisation. This is not just about protection – it’s about banks being able to offer the most tailored services possible by understanding a customer’s unique context. 

Current identification methods are too wide

Financial vulnerability is more nuanced than the identification systems and criteria that banks are currently using. Take, for example, a recently widowed spouse whose partner had been in charge of finances. There may well be compounding factors that should all accumulate into a bank’s assessment of vulnerability: a lack of financial literacy; age; any possible illness or disability. This is what we call compounding vulnerability. This person, likely to be under great stress, needs to make the transition from a joint account to a checking account. The bank has a duty to check for vulnerability – as all banks do.

But what banks are missing is that they also have a duty to relieve, rather than add to, this recently bereaved person’s stress levels.

Rather than asking a series of questions ranging from date of birth to net income, there needs to be a system in place that asks fewer, more explicit questions to get the information it needs to assess the level of vulnerability of the customer. 

Yes, identification processes are currently in place, but they are not refined enough to be able to remove stress and friction from customer interactions. We see the same problem with credit card fraud; companies use linear automation tools without the nuance to identify the ‘grey area’ scenarios, and end up flagging far too many cases. 

This trend was emphasised in the Scotsman’s Talking Money report: “the industry thinks it’s fair – but it’s also very wide. There could be actual vulnerability, where a customer has the inability to do certain things day-to-day, or it could be transient, like someone losing their job or being unable to work due to illness, for example. A lot of banks place their focus on debt management rather than making things simpler and accessible for customers.” 

Machine intelligence can identify the full spectrum of vulnerability, and tailor services accordingly

Vulnerability is context-specific and rarely black and white. The kinds of linear technologies being widely used today to handle potential vulnerability cases can’t calculate this – but people can.

Banks provide specialist training to staff to identify different customers’ wants, needs and vulnerabilities, and to do so with nuance. This is specialist expertise that could find its most effective use in identification systems. 

All of which means that we need to find a way to capture the human understanding that people possess, and translate it to technology.

Whether you’re 10% or 40% vulnerable, your payment provider should know what’s best for you.

For a deeper dive into humanising our financial services, I recommend the latest Rainbird eBook on financial vulnerability, in collaboration with Ernst & Young and the Royal College of Arts.

Recognising and supporting vulnerable customers in banking
In the wake of the COVID-19 crisis, the number of vulnerable people in every society has skyrocketed. This comprehensive ebook explains the definition of vulnerability and its different forms, why it's unwise for banks and financial institutions to ignore vulnerable customers, and why intelligent decision automation is the game changer we all need.

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Rainbird and EY support RCA students to develop AI banking apps that help vulnerable customers

The Royal College of Art
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Rainbird, the intelligent automation platform, and global consultancy Ernst & Young (EY), have collaborated with the Royal College of Art (RCA) to offer industry knowledge and expertise to students enrolled on the RCA Service Design Programme course. The aim of the course is for the students to develop cutting-edge AI-enabled apps that will help vulnerable banking customers better manage their finances and navigate the complex financial services industry. With an expected increase in the number of people classified as a ‘vulnerable customer’, following the severe economic impact of the coronavirus pandemic, there has never been a more pressing time to help those struggling to navigate the financial services landscape. 

The students conducted face-to-face interviews with people categorised as vulnerable, to ensure a human-centred approach to the AI solutions they created. The apps developed by the groups demonstrate there is far more to be done to protect vulnerable people, when it comes to banking. They also covered a wide range of vulnerability use cases and value propositions, including:

  • A preventive service that applies consumer gamification and incentives to nudge users towards positive behavioural changes. The service is designed to use Rainbird to generate a “wellbeing score” that helps banks recognise those who need extra support. 
  • A service aimed at preventing financial abuse by improving the joint account service for couples. One in five adults is a victim of financial abuse (most of these being women). The service is designed to use Rainbird to identify potentially vulnerable people by analysing suspicious transaction patterns, unusual behaviour and words used in help centres. 
  • A service designed to boost financial literacy among young people, whom are highly represented among vulnerable customers. The service would use Rainbird to identify the potentially vulnerable, based on multifactorial signs of low resilience (e.g. low savings or over-indebtedness), and deliver automated, contextual advice.

James Loft, COO at Rainbird, said, “As banks are increasingly tantamount to online businesses, the nuanced and careful consideration of a customer’s circumstances should be incorporated within technologies used to assess vulnerability. The complex factors that influence a bank’s assessment of transient or compounding vulnerability can be reliably handled only by technology with human knowledge at its core.”

The students presented their proposed apps to a distinguished panel and detailed the resources needed to bring their ideas to life, a clear timeline and implementation budgets. 

The proposed solutions align with guidelines set by the Financial Conduct Authority (FCA) on how to assist vulnerable people, and comply with GDPR.

Clive Grinyer, Head of Service Design at RCA: “At the RCA Service Design course, we apply design approaches and methodologies to some of the biggest problems facing society and businesses. The opportunity to work with Rainbird, to develop new ways of identifying and helping people in vulnerable circumstances, fits perfectly that ethos. Our students have the opportunity to experiment and shape how AI and financial services can create real solutions to these problems.”

Chris Withers, Head of AI and Advanced Analytics, Financial Services at EY: “Improving outcomes for society’s most vulnerable citizens is an issue that will be even more urgent as a result of the Covid-19 pandemic. There are no simple solutions to improve a person’s life situation or break a cycle of financial abuse or neglect, but there are defining moments where data, information and technology can come together to provide benefits to those people who are more vulnerable at any given point in time. The RCA students have designed solutions which demonstrate the art of the possible for all of us who participate in the financial services sector.”

You can download below our report on vulnerability in banking.

Recognising and supporting vulnerable customers in banking
In the wake of the COVID-19 crisis, the number of vulnerable people in every society has skyrocketed. This comprehensive ebook explains the definition of vulnerability and its different forms, why it's unwise for banks and financial institutions to ignore vulnerable customers, and why intelligent decision automation is the game changer we all need.

Join the Newsletter

Letter from the CEO: Access Rainbird for Free to Tackle COVID-19 Devastation

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Dear friends and partners

We call on the world to utilise our technology free of charge to help others in the face of COVID-19

I invite you to use Rainbird’s intelligent automation technology to support our communities at this time of international crisis. It is already relied upon by some of the largest global organisations to deliver critical services.

This pandemic is resulting in disruption on a scale that is unprecedented in peacetime. For some organisations, demand for services is collapsing while, for others, it is increasing exponentially – not least of all within our healthcare services. Either scenario presents a massive challenge, especially given this crisis has also triggered a wholesale displacement of our people.

Like you, I feel the challenge of balancing my responsibilities to my family, my colleagues and my community. While we are all feeling the pain of disruption, many of us are also facing new financial realities or losing our jobs.

Technology is probably more critical right now than at any other moment in history. We applaud and watch with anticipation as data scientists predict virus inflection points and scientists advance hopes for a vaccine.

While they do their critical work, technology companies like Rainbird can and must do more. We need to take action, not just publish rhetoric. Our businesses, staff and communities need support. They need answers to their biggest questions; “Should I go to hospital?” “Is there financial support for my family?” “How can I support my employees?”

We work with experts every day, and each wishes they could support all of those who need their help; every worried patient, every struggling family, every remote worker.

There is a technology that makes this possible, and it would be irresponsible if we didn’t make it available for free where it can be wielded for the greater good.

We have an established, truly intelligent technology that can automate complex decisions at scale and explain its rationale at each turn; whether that be a provisional clinical diagnosis, critical financial advice or essential technical support.

Intelligent automation delivers solutions at a scale that cannot be achieved by humans alone. This is true at any time but especially now. Quite simply, it solves a problem of scale that cannot be solved any other way.

We are already working with partners to put our collective energies into making a difference. Before COVID-19, we were working with Ernst Young and the Royal College of Art to support vulnerable people in financial services. Now, we’re developing further ways to help.

We want you to join us because collectively we can achieve so much. That’s why we’re offering our technology to you, so your best expertise can be amplified to make a difference.

How will you scale your knowledge to make a difference to millions of people?

Simply complete the short form on this page and we’ll be in touch.

Stay healthy

James Duez
CEO
Rainbird Technologies

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Find out how Rainbird can ensure every decision in your organisation benefits from the required expertise.

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