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Digitalization in the global banking and financial industry has initiated a huge leap towards automated workflow at organizational levels. In an industry that was stuck on time-consuming manual work processes, the automation strategies are reinventing every aspect - from operations and workforce management to customer acquisition and retention.
Today, with the added burden of a pandemic-induced slow-down and remote working, virtual services are taking the central position in both banking and non-banking financial sectors. But here are a few pointers for the future of banking:
How deep is the impact of automation in banking and other financial sectors? Will digitalization contribute to a complete make-over of the traditional workflow? How far will it contribute to increased productivity, customer relations, and reduced operational costs?
Need for automation: The cobwebs of traditional banking system
The traditional banking system is time-consuming, often slipping into poor customer experiences and operational errors. Here are a few of the hurdles that have been hindering the efficient workflow in the traditional banking process:
Processes like opening/closing a bank account is time-consuming process
The need to physically be there to avail the services
Security breaches in the absence of AVS, E2EE and multilayer authentication
Legacy data management is expensive
Difficult to comply with regulatory compliance
Improper handling of customer grievances
High inherent costs
Inability to rise above expectations amidst tough competition
The manual process of sorting through and reviewing a vast sea of information and keying it into various systems often gets laborious. Errors are inevitable and can cost banks money as well as a bad reputation. Also, maintaining and retrieving legacy data is an expensive and time-consuming process.
Automated banking processes: Lubricating the workflow
The primary aim of automation is to assist in the banking work which is repetitive in nature. Automation helps to cut down immensely on documentation in account opening and customer onboarding. It also facilitates highly secure access mechanisms.
A study by McKinsey predicts a huge shift in more than one-fourth of the banking procedures to automation, thus streamlining the banking and nbfc services. The pressing demands of the banking sector have paved the way for some of the highly innovative automation tools like RPA (Robotic Process Automation).
Reduction in time and effort in operational activities:
With the UI automation tools, time and effort to perform various operational activities get reduced substantially. Various activities like account opening/closure/statement/credit-debit card requests get processed quickly.
Personalized customer experience:
Having a satisfied customer is the key to success for any business. RPA can help in self-servicing tools to enhance the customer experience. Many transactional activities can be carried out without any intervention from the banking personnel.
Data protection and cybersecurity:
Bank data is highly confidential and protecting it is the core priority of any bank. With digitization, it is imperative to secure transactional channels. KYC and AML verification processes can be automated. Automated freezing of an account if compromised, ensures quick and guaranteed security. Fraud detection and finding the source of fraudulent activity can be leveraged through automation.
Cost Saving and performance improvement:
These two highly important aspects to any business make an impact on the overall growth.
Empowering the staff
Moving from paper to computer graphical interface requires basic knowledge of the computer. Bank staff would need extensive training in familiarizing with the new methods to deliver the banking operations. Automated methods help in faster reports generation, quick data processing eventually leading to productivity.
Implementing the right automation processes
Technology has inherently changed the banking experience. In this digital age financial institutions must leverage automation to align with customer needs and adapt to changing business requirements.
It's important to first deploy the right processes to leverage automation benefits:
Automate customer engagement processes to minimize banking personal involvement
Deploy multi-layer authentication for sign in, transactions, verification etc
Automate verification process for KYC and AML to speed up customer onboarding
Automatic report generation
Mortgage and loan processing system.
Automated processes are on the way to becoming the future of the banking sector. If banks and other non-banking financial companies do not embrace the change, they are bound to lose in the competitive sphere. In the current scenario of economic uncertainties, the need of the hour is to find more economical, faster, and reliable approaches to overall progress. Large-scale automation of business processes will be the golden key to future banking.