How Automation Technology Will Influence Banking And Finance In 2022
While RPA offers numerous advantages to the banking industry, it’s essential to address potential challenges and considerations. RPA can expedite loan processing by automating document verification, credit checks, and approval workflows. This not only reduces processing time but also enhances customer satisfaction. If you’d like to learn more about how automated data extraction can optimise your business’s revenue streams, see our case studies or speak to one of our experts in a demo. Reconciliation is a time-consuming process with high stakes, making it ripe for intelligent automation.
Join experts from TELUS International and Automation Anywhere, a top cloud automation platform, to learn how banks and financial services firms can leverage automation to enhance the customer experience, optimize operations and foster customer loyalty. In a recent live webinar hosted by TELUS International, Ken Mertzel, global industry leader — financial services at Automation Anywhere, shed light on the various ways automation is being used within the banking and financial services industry. While the list of benefits is lengthy, a few of the more prominent use cases are listed below. In the face of these challenges, forward-thinking banking and financial services brands are seeking innovative solutions to enhance their customer experience, optimize operations and foster customer loyalty.
Challenges Faced by Banks Today
As we will explain, when these interdependent layers work in unison, they enable a bank to provide customers with distinctive omnichannel experiences, support at-scale personalization, and drive the rapid innovation cycles critical to remaining competitive in today’s world. Each layer has a unique role to play—under-investment in a single layer creates a weak link that can cripple the entire enterprise. For instance, using AI for risk assessment, automating the classification of unstructured data, or reducing manual work can help you increase the agility of the overall organization, improve the customer experience, and get new features and products to market much more rapidly. Timesheets, vacation requests, training, new employee onboarding, and many HR processes are now commonly automated with banking scripts, algorithms, and applications.
After all, many financial institutions still pride themselves on face to face financial advising and putting a human face to their investment recommendations (even if the actual recommendations are done by “the bots” in the back-office). While roles within Fidelity have certainly changed and evolved from 2012, Abby’s initiative to re-skill or up-skill workers to meet the demands of the Fourth Industrial Revolution proved vital in Fidelity’s long-term success and financial health. Automation will unlock many doors in banking and finance, and likely sooner than we think. For banks, amongst many things, automation will boost capabilities in terms of trend analytics and measurement, and also expedite the approvals and processing for loan applications, which currently takes an inordinate amount of time and human effort. In personal finance, automation will broaden the common person’s accessibility to loans, investing, and informed banking decisions, heightening opportunities for long term financial planning and stability. Systems powered by artificial intelligence (AI) and robotic process automation (RPA) can help automate repetitive tasks, minimize human error, detect fraud, and more, at scale.
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Many of these inquiries are automatable, such as account balance checks or transaction history reviews. Creating centres of excellence is a common approach to governing automation, says Burnett, although they must be well integrated into the business they are to succeed. “The model that seems to work best is a mix of central and federated,” she says. “You might have centres of excellence in different divisions or geographies, depending on what work is being delivered, and those are under the governance of a centralised body.
- Companies are rapidly adopting AI software for data extraction as a cost-effective and faster alternative to OCR and manual data capture.
- Automation reduces the need for your employees to perform rote, repetitive tasks.
- We integrate these systems (and your existing systems) to allow frictionless data exchange.
- They can also adopt
advanced authentication measures and continuously monitor for
potential security breaches.
We integrate these systems (and your existing systems) to allow frictionless data exchange. You want to offer faster service but must also complete due diligence processes to stay compliant. During the pandemic, Swiss banks like UBS used credit robots to support the credit processing staff in approving requests. The support from robots helped UBS process over 24,000 applications in 24-hour operating mode. The bank’s newsroom reported that a whopping 7 million Bank of America customers used Erica, its chatbot, for the first time during the pandemic. Robotic process automation, or RPA, is a technology that performs actions generally performed by humans manually or with digital tools.
In fact, many of them already have successful implementations of these technologies in place. InfoSec professionals regularly adopt banking automation to manage security issues with minimal manual processing. These time-sensitive applications are greatly enhanced by the speed at which the automated processes occur for heightened detection and responsiveness to threats.
In return, the team delivers a family of products or services either to end customers of the bank or to other platforms within the bank. In the target state, the bank could end up with three archetypes of platform teams. Business platforms are customer- or partner-facing teams dedicated to achieving business outcomes in areas such as consumer lending, corporate lending, and transaction banking. Enterprise platforms deliver specialized capabilities and/or shared services to establish standardization throughout the organization in areas such as collections, payment utilities, human resources, and finance. And enabling platforms enable the enterprise and business platforms to deliver cross-cutting technical functionalities such as cybersecurity and cloud architecture. Digital workflows facilitate real-time collaboration that unlocks productivity.
For many, automation is largely about issues like efficiency, risk management, and compliance—”running a tight ship,” so to speak. Yet banking automation is also a powerful way to redefine a bank’s relationship with customers and employees, even if most don’t currently think of it this way. Analyzing
real-time IoT data helps lenders to assess credit risk and to offer
personalized interest rates.
For example, you can use a smartwatch to pay at a store, eliminating the need
for cash or cards. IoT also supports in-car payments, allowing you to pay for
gas or food without getting out of your car. According to industry stats, from 2023 to 2029, the IoT market is expected to
compound annual growth rate (CAGR) of 50.1%. This robust growth rate will catapult the market value to an impressive
$3.09 billion by 2030. This case study underscores the substantial advantages Robotic Process Automation brings to the table when applied strategically in the banking sector.
The moral of Intuit’s story is to stick with projects that have clear beginnings and endpoints. These might include applying for a new account, loan origination, or fulfilling certain regulatory compliance requirements such as Know Your Customer (KYC). One of our clients, Intuit, used automation in order to streamline their workflows both internally and externally. They started with just a single workflow but scaled up to more than 20+ with a peak of over a million executions a day.
By integrating business and technology in jointly owned platforms run by cross-functional teams, banks can break up organizational silos, increasing agility and speed and improving the alignment of goals and priorities across the enterprise. The AI-first bank of the future will need a new operating model for the organization, so it can achieve the requisite agility and speed and unleash value across the other layers. While most banks are transitioning their technology platforms and assets to become more modular and flexible, working teams within the bank continue to operate in functional silos under suboptimal collaboration models and often lack alignment of goals and priorities.
Successful IoT Implementations in Banking and Finance
IoT devices automate data gathering, reducing human
errors and making auditing faster. Banks can also use IoT data to track and
audit their internal processes, regulatory compliance, and risk management. The banking sector has been rapidly evolving in recent years, driven by technological advancements that have transformed the way financial institutions operate. One of the most notable innovations in this space is Robotic Process Automation (RPA), a technology that has been making waves in the financial world. RPA is revolutionizing the way banks conduct their operations by automating repetitive tasks, streamlining processes, and improving efficiency.
Built for stability, banks’ core technology systems have performed well, particularly in supporting traditional payments and lending operations. However, banks must resolve several weaknesses inherent to legacy systems before they can deploy AI technologies at scale (Exhibit 5). Core systems are also difficult to change, and their maintenance requires significant resources.
Nitin Rakesh, a distinguished leader in the IT services industry, is the Chief Executive Officer and Director of Mphasis. Use our understanding of the evolving needs
of the financial sector and leverage our expertise to
create impactful fintech solutions. Contact the Softermii team
today to embark on your IoT journey and revolutionize how you do business in
the financial sector. Now, let’s take a closer look at some of the specific use cases of RPA in the banking sector. Banks receive volumes of customer support requests, inundating their staff with rote busy work.
Instead, they can coordinate with bankers to make positive additions or modifications through incremental updates. For example, you can add validation checkpoints to ensure the system catches any data irregularities before you submit the data to a regulatory authority. For example, a want to grow by exploring new sales techniques and planning campaigns. They can focus on these tasks once you automate processes like preparing quotes and sales reports. In addition to RPA, banks can also use technologies like optical character recognition (OCR) and intelligent document processing (IDP) to digitize physical mail and distribute it to remote teams. According to the 2021 AML Banking Survey, relying on manual processes hampers a financial organization’s revenue-generating ability and exposes them to unnecessary risk.
- Robotic Process Automation (RPA) is transforming the banking industry by enhancing efficiency and streamlining operations.
- For example, Credigy, a multinational financial organization, has an extensive due diligence process for consumer loans.
- Business processes like account closing, dispute tracking and rate changes are vital, but they shouldn’t monopolize internal resources like brain power, time and dollars.
- According to industry stats, from 2023 to 2029, the IoT market is expected to
compound annual growth rate (CAGR) of 50.1%.
- In fact, one of the prerequisites of a comprehensive core banking platform is its ability to eliminate dual data entry.
Read more about Automation in Considerations About Technology here.