'No need for paper' as AI emerges

Anthony Rafferty, Origo CEO, called the use of paper in the rapidly changing world “ludicrous”. 

Rafferty said: “It’s not often we can make guaranteed predictions but I think it’s safe to say the use of AI and machine learning will grow exponentially in 2024, alongside the expectation that both businesses and consumers will have digital interactions with the companies we use as a matter of course. 

“It seems ludicrous therefore, that in our industry, which has some of the most sophisticated digital technology around, there are still so many processes which remain paper-based –perpetuating inefficiencies and exposing businesses to risk.”

He thinks financial services firms should work towards phasing out paper processes in 2024. 

And Rafferty believes going fully digital could help firms comply with consumer duty regulations and solve issues more swiftly.

He said: "Consumer Duty insists that the products and services that consumers receive should ensure 'no foreseeable harm'.

"It is difficult to argue, for example, that processes which slow down the transfer or processing of business – potentially keeping investors in unsuitable products or out of the markets – are not causing foreseeable harm.

"In particular, when compared to others in the industry, using digital solutions, who do things swiftly and with the end consumer firmly in mind. The regulator’s view on this will remain to be seen but I can see them taking a dim view of such processes."

We can argue that slow, inefficient, costly paper-based systems are looking well and truly brokenAnthony Rafferty, Origo

He explained it is "easy to see" why processes have not been updated by the businesses which run them.

"Typically, they are back-office processes and for most businesses, investment in new technology and updating systems goes into the front end, which is revenue generating," Rafferty said.

"Back-office processing often develops organically, and is tolerated while it still functions. The old adage ‘if it ain’t broke don’t try to fix it’ also springs to mind.

"Except, in an environment where digital solutions are rapidly becoming the norm, alongside expectations for slick, same-day service, we can argue that slow, inefficient, costly paper-based systems are looking well and truly broken."

He went on to say the “re-keying” of information and data can also lead to a risk of errors, another reason to move away from archaic processes.

“A healthy functioning market needs those essential processes covered,” said Rafferty. 

“Advice firm back-office staff should not have to rekey details and data between one system and another simply to get their everyday work done. Imagine the time and costs saved if everything worked digitally, and for what value-added tasks that time could be better used. 

“In a rapidly developing technological environment, where expectations are becoming higher, all companies are going to come under the spotlight and we can expect that businesses and clients will vote with their feet if they persistently meet with slow, unsatisfactory service.”

tara.o'connor@ft.com

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