Nuts and Bolts: Process Automation and Digital Banking Experiences

By: Andrew Beatty, Finextra

This article was originally written by Andrew Beatty and published on Finextra on 28 February 2019.

Like nuts and bolts, automated processes and decision making must be “part and parcel” to securing and delivering frictionless digital customer experiences in the banking delivery model of today (and tomorrow). Keys to accomplishing this include instituting Robotic Process Automation (RPA) upon legacy solutions/processes, as well as leveraging data via real-time API-driven capabilities within new digital solutions/processes. With the potential of a 40%-100% ROI within 3 to 8 months,[1] either method offers a tremendous win-win opportunity for banks and customers.

It’s time to open our toolboxes and get to work.

Building the Always On, End-to-End Digital Experience

Customers and prospects increasingly want to know their bank has resolved to be an always-on digital bank that caters to their needs. Banks who use process automation have newfound capability in the form of providing customers digital ease and transparency that seamlessly spans the bank’s entire network and all of its channels, from branch to back office to mobile to digital etc.

As of the end of 2017, 11% of financial services institutions viewed themselves as having adopted RPA widelyacross their organizations.[2] Thus instituting and demonstrating the sweeping changes that process automation enables takes time, but even incremental changes — like more productive, real-time assistance, and the ability to skip unnecessary steps when shopping for a new account – can greatly enhance the customer experience.

Additionally, process automation around existing systems can reduce staffing demands, and remove disconnect from one channel to the next. For example, it can cut the entire processing time for loan applications in half, and further enhance those results for the most valued customers. Onboarding for commercial customers can be expedited with shorter setup time for ancillary functions such as wires and customer premise check scanning. Not all of these efficiencies will be visible to the customer, but they’re hugely important in delivering an end-to-end, frictionless customer experience, and they free up the bank’s budget for other transformational work.

Data Drives Business Value

Today’s process automation technology can easily access systems through API gateways, reducing reliance on manual interventions, and the cost and risks they represent. Machine learning is now built into technology platforms and easily implemented with an integrated add-on. For banks, this means the capability to finally harness external and internal data efficiently, so it can be interpreted and applied to solve real business challenges. Process automation can significantly lower compliance cost, process waste, and enable banks to better execute accurate fraud prevention programs, expedite onboarding, and make personalized and relevant customer offers. Process discovery tools can also eliminate some of the most labor-intensive parts of the automation itself, which helps to further increase process automation adoption. The value is real: A recent Juniper Research report predicts that process automation revenues in banking will increase nearly 400%, to reach $1.2 billion, by 2023.

Opportunities Abound

RPA can be applied across the spectrum of banking – retail, commercial, wealth management, investment, and wholesale. The opportunities are many, and diverse. Examples include:

Client Onboarding: Know Your Customer (KYC) and Anti Money Laundering (AML)
Account Administration: Statements, opening/closing/maintaining/administering accounts
Reconciliation: Reconciling bank accounts, reconciling the ledger
Market Research: Meaningful and actionable analytics
Card Management: Approvals, servicing, rewards, document management
Portfolio Management: Portfolio investment accounting and client reporting

Keep in mind: These examples barely scratch the surface!

In Summary

Process automation has matured to the next level of impact and usability and is a critical enabling element of digital banking experiences. Process automation provisions a tangible and expedited return on investment. Financial institutions may not be able to solve every legacy system or structural process problem at once, but process automation enables an abundance of new opportunities for modern banks to become more competitive and differentiated.

[1] Patrick Szakiel, “Fintech Trends: 7 Things Disrupting Financial Technology in 2019,” G2 Crowd, December 3, 2018, https://learn.g2crowd.com/2019-fintech-trends.

[2] “What PwC’s 2017 survey tells us about RPA in financial services today,” PwC, October 2017, https://www.pwc.com/us/en/industries/financial-services/library/2017-rpa-survey.html.