Automation of Processes in the Banking Sector
Throughout the history of the development of the financial services sector, in the eyes of clients, banks have appeared as the most secure establishment. But the banking sector has always been characterized by another feature – conservatism, which, until recently, partly helped to be a monopoly on the monopoly market.
Everything has changed with the advent of new information technologies. In modern realities, the banking sector in the financial services market is far from being in the first position, and the activity of competitors is already beyond the scope of the banking industry in some areas. In such a situation, there are essentially two ways – to remain a conservative institution for a limited number of clients, or to be on the wave, not to be afraid to change and follow the needs and desires of service consumers.
Each bank, of course, has its own vision and understanding of current problems and tasks, and has a policy and development strategy. But there is also one common idea of the future that unites the modern banking world – the impossibility, without advanced information technologies, to get closer to the client, to understand his needs, and to offer something that will fully meet them.
Once upon a time, banks were among the very first to actively implement banking automation programs and continue to do so to this day. But at the current stage, it is not so much the automation of processes that is important as its efficiency – the ability of information systems at a high level to solve specific tasks of a particular bank. Such a system can only be called one that will flexibly adapt itself to the current and future needs of a financial institution, and not force it to adapt to it.
What is banking automation?
Banking automation is the integration of artificial intelligence (AI) and robotic process automation (RPA) into banking business processes, not only to stay competitive and improve efficiency but also to reduce non-core resources and achieve agility. This allows banks to offer clients new opportunities and experiences, as well as help them enter and develop new markets, which has traditionally been challenging.
Intelligent automation is a hot topic in the banking sector and is viewed by many as a transformative technology for the industry. Banking automation has a rich history and is well on its way to an exciting future. What can you expect from banking automation in the future?
It is important to remember that digitalization itself is not an innovation process for banks. There are at least four milestones in the history of banking automation that have helped dramatically improve customer satisfaction, reduce manual labor, and reduce operating costs. Each stage has also improved the quality of banking services:
1. Banks have integrated ATMs into their infrastructure since the late 1960s. It was the earliest and most important step in automation, helping to reallocate work and speed up cash transactions.
2. Banks then computerized their offices. This reduced the number of physical sources of information and mobilized information flows within and between institutions.
3. Banks have introduced personal applications so that users can manage their finances. This provided easy and secure access for customers who can now directly manage their accounts and transact.
4. Then came the emergence of chatbots that can automatically respond to the vast majority of unified customer requests and allow bank employees to focus on more unique and important tasks.
As history shows, automation in banking has been a project – and a prospect – 50 years in development. Now is the time to face and face new challenges by implementing modern automation strategies as a continuation of how banks have streamlined operations and increased efficiency and reliability over the years.
According to some reports, 62% of global banks expect a digital transformation in 2022, up from 19% in 2018. Banks will need to invest heavily in end-to-end processes and infrastructure that can drive efficiency across the organization. They must stop wasting all their innovation resources on tactical designs and customer interfaces. The banking automation solutions development requires a careful and serious approach.
Why is needed?
Banking automation is aimed at achieving 5 goals:
- Transfer of operations to automatic mode, which increases the speed of their processing;
- Creation of a single accounting center to track the activities of all offices and branches of the bank;
- Formation of a flexible line of products that are suitable for customers in a particular region;
- Ensuring high speed and efficiency of making is resolved lending services, competent management of the loan portfolio and risks;
- Prevention of attempts at fraud among customers and bank employees.
The overarching goals are also clear: increasing profits, restoring customer confidence, introducing new digital infrastructures, and reducing costs and risks.
Automation of the bank’s operational work will allow the procedure for processing products and rendering services to be brought to a unified standard. Thanks to this, customer service will be simplified and accelerated, which will positively affect their loyalty to the bank. Reliable and fast work of the bank, convenient creation and development of products and services are provided.
Intelligent automation is an efficient solution and is of great interest in the banking sector. The ability to quickly and efficiently service a client is no longer an advantage, but a requirement for any bank that seeks to consolidate its position in the highly competitive financial services market. To get into the top leaders, it is necessary to timely introduce new services and products, as well as to respond promptly to the changing needs of consumers.