How Automation is Transforming the Banking Industry
Updated On : july 2020
With disruption threatening to leave traditional banks out of the competition unless they learn to embrace technology, it has become crucial from banks and financial institutions to adopt banking automation and provide a more comprehensive banking experience.
There are a multiple factor leading to disruption in the banking industry today and banks are leveraging automation to adapt to the changes and get better aligned with customers' requirements and preferences.
- Personalizing the customer experience is the top priority for banks to maintain a competitive edge.
- Monetizing data is another key element to survive disruption for banks
- Cybersecurity and identity protection is a challenging factor for banks among rising concerns about the increasing frequency and sophistication of cyber attacks
- Empowering the workforce with modernization is what traditional banks need to capitalize on
Let us look at the different ways automation is changing the banking industry -
- Better banking
Automation in back-office is the real game-changer and the secret to better banking. The back-office has a large workforce attending to requests from customers, which proves to be not just costly but also slow, producing plenty of errors with inconsistent outcomes. Banks with automation have better back door procedures cutting down on time spent on manual processing. Most banks and financial institutions have adopted the ABCD of digital technologies to enhance cost efficiency and customer experience. ABCD stands for:
- Artificial Intelligence/ Robotic Process Automation (RPA)
- Big data and advanced analytics
- Cloud computing
- Devices in different processes like Know Your Customer (KYC), trade finance and cross border transactions.
- ATM Protection
With automation, ATMs have cameras providing real-time images and instant face recognition with the help of sophisticated AI techniques like deep learning. In an industry that is constantly looking to enhance the consumer banking experience, reduce risk and comply with regulations, and increase efficiency around key customer-centric processes, automation is the key to take care of all of these and is already being put to use across many banks.
- Faster fraud detection and protection
Customers look for a bank they can trust and banks need to win that trust by leveraging automation to avert and protect against fraud. To start off, building more robust customer profiles to provide definitive insight and also simplifying the Know Your Customer (KYC) process by introducing automated verification services, would help.
Using accounts payable automation to reduce human touchpoints, automatically freezing compromised accounts are some of the ways automation would help.
Banks can have an automated fraud detection program and also detect fraudulent credit card transactions more accurately. Automation also helps to track down the sources of suspicious emails.
There are massive quantities of data available which banks can leverage to bring an algorithmic approach to marketing analysis. The marketing teams after identifying what audiences are looking for, can run test campaigns using the information. These campaigns enable them to collect more data and improve their strategies accordingly. Data science helps banks to get return analysis faster, shortening test cycles. Banks focus on personalized marketing speaking directly to the individual customer's needs.
Today, automation is increasing the efficiency in banking and improving the customer experience. Chatbots offer solutions immediately and cut down on waiting time.
- Revolutionizing Risk Management
Banks can offer customized products to clients by checking historical data, doing risk analysis, and removing human errors resulting out of manually-handled models.
- Providing Security
Suspicious behaviour and spurious emails can be tracked down to prevent and possibly predict security breaches.
In an industry that is constantly looking to enhance the consumer banking experience, reduce risk and comply with regulations, and increase great efficiencies around key customer-centric processes, automation is already being put to use across many banks.
- Regulatory Compliance
With a huge number of rules and regulations to comply with, banks and financial institutions find it a tough job to plan ahead. Automation helps to make planning easier.