The benefits of hyper-automation for banking – Finextra – Finextra

We know, we know.How many words can technologists add hyper too? But dont roll your eyes just yet.

Trust us, if you work in banking, hyper-automation will likely be the latest buzz word you hear in boardrooms (whether physical or remote) in 2021 and beyond.

Lets find out more!

The changing face of banking

Deloittesuggests that the post-pandemic bank will emerge a lot different to the one that went in. They forecast that banks will need to continue to focus on improving the digitisation of their operations, remain flexible to new business models and (most importantly) put customers at the heart of their digital strategy.

Day-to-day, customers have become much more accustomed to instant action, engagement and information from their interactions with brands and as such, trends like banking as a service (BaaS), the rapid proliferation of fintech solutions and regtech innovations, suggests that the time is right to consider the potential for hyper-automation.

However, If weve learned anything over the last year, its that humans still want to be well, human. As machines take over more roles in day-to-day operations, its critical banks keep people at the heart of their approach.

What is hyper-automation?

Coined byGartnerin 2019,hyper-automation is the full automation of the business processes and customer processes. It achieves this through an advanced ecosystem of operational and customer facing digital solutions that look to leverage the flexibility and scalability of modern IT infrastructure, which ultimately frees up staff to inject their creativity into delighting customers outside of said processes.

The automated business, combined with agile frameworks, provides opportunities for better-informed decision making, generated through a more holistic data picture throughout the organisation.Without getting too techy, Robotic Process Automation (RPA) is being enhanced and refined by technologies like artificial intelligence (AI), natural language processing (NLP), process mining, advanced analytics and more, to reduce costs, maintain accuracy and speed up processes.

Why its a fit for Banking

Banks who havent had the chance to start as a digitally native organisation have built up complex systems of legacy tools, which have been bolted onto an operational structure defined when they were a telephony or branch network bank.With new challengers flooding the market with cloud infrastructure and a mobile-first, digital proposition, the fight for market share has intensified. This is what makes automation such a compelling proposition, as any opportunity to slim down the operational costs will be welcomed to drive increased profitability.

From automating onboarding processes in lending to improving data quality and utility for better decision making, hyper-automation has the potential to augment workers ability, whilst reducing operational costs and human error.

The Benefits of hyper-automationIntegration

Productivity

Flexibility

Demonstrable ROI

What Makes It Hyper?

With your brain whizzing on the potential for these benefits in your business, you might now raise a valid question. We already have some automation in our business, whats the difference with hyper?

Tools working together

AdHoc vs Integrated

AI & ML

Narrow vs Large

Automation Use Cases for Banking

Lets look at a few ways automation can improve banking experiences:

Regulatory Reporting

Accentures 2016 compliance risk study found 73% of respondents thought RPA would be a key enabler for compliance in the next three years. Since then, automation has been deployed sporadically. However, the regulatory environment becomes more complex year-on-year, meaning standalone RPAs may become less useful. Complete automation, as advertised by hyper-automation, will require complex, multi-year implementation as well as culture phase shifts, but will be key to better risk and compliance.

Lending

Lending processes can still be slow and manual, even in 2021. There are a multitude of blockers from credit checks to employment verification that impacts turnaround times. Automation technologies can, with ease, extract or approve all the relevant loan data in seconds, validating customers from multiple sources.

For instance, mortgage processes sometimes take up to 50 days to approve. Automation, paired with emerging technology like blockchain, could combine to validate customer data from multiple sources automatically or reduce attrition from customers pulling applications due to minor errors on forms that caused delays.

Back-Office

As is usually the case, new technology is often deployed to customer-facing processes first to impress the market. However, back-end processes are ripe for automation possibilities. This is driven by the sheer volume of records and documents many banks continue to add to, even in the digital age.

On average retail banks have between 300-800 processes, all of which can be improved with business process management (BPM) platforms which can reduce human error or inefficiencies negatively impacting the customer experience. However, the key here is not to place a bandaid over something that is no longer fit for purpose.

Sales & Distribution

Retail branches of the future are due a makeover. Its reasoned a shift from contact centres to customer care platforms enhanced by intelligent routing provided by automation will occur. Similarly, embedding distribution on partner platforms through API and banking as a service (BaaS). All empowering frontline staff to harness their creativity and passion for serving customer needs.

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The benefits of hyper-automation for banking - Finextra - Finextra