How Intelligent Automation Is Redefining the Banking Industry

Introducing bots for such manual processes can reduce processing costs by 30% to 70%. Several processes in the banks can be automated to free up the manpower to work on more critical tasks. Banking automation has become one of the most accessible and affordable ways to simplify backend processes such as document processing.

• Likewise, chatbot interactions are more straightforward due to automation based on commonly asked questions and answers.
• DTTL (also referred to as “Deloitte Global”) does not provide services to clients.
• Two-thirds of senior digital and analytics leaders attending a recent McKinsey forum on gen AI1McKinsey Banking & Securities Gen AI Forum, September 27, 2023; more than 30 executives attended.

Figuring out what’s valuable and why can be challenging when you have a virtually limitless volume of textual data to assess. A 2019 survey found that nearly 50 percent of small businesses use business intelligence tools which can help make short work of this kind of data. Those with natural language capabilities can identify and extract the most relevant keywords/content from such texts. Then, using intelligent automation technology, the results are categorized and labeled based on a preferred ontology.

Banking and financial services automation

As the world forges ahead with transformations in every sphere of life, banks are setting themselves up for continued relevance. Firms that understand and implement IA in time can be certain of sustained success, while those that haven’t must choose relevant automation tools to help them stay ahead of evolving customer expectations. The Banking and Financial industry is seen to be growing exponentially over the past few years with the implementation of technological advancements resulting in faster, more secure, and reliable services. To remain competitive in an increasingly saturated market – especially with the more widespread adoption of virtual banking – banking firms have had to find a way to deliver the best possible user experience to their customers. As per Gartner, the pandemic has catalyzed the business initiatives to adapt to the demands of employees and customers and make digital options the future of banking services. Just as the smartphone catalyzed an entire ecosystem of businesses and business models, gen AI is making relevant the full range of advanced analytics capabilities and applications.

The technology is rapidly maturing, and domain expertise is developing among both banks and vendors—many of which are moving away from the one-solution-fits-all “hammer and nail” approach toward more specialized solutions. In another example, the Australia and New Zealand Banking Group deployed robotic process automation (RPA) at scale and is now automation in banking industry seeing annual cost savings of over 30 percent in certain functions. In addition, over 40 processes have been automated, enabling staff to focus on higher-value and more rewarding tasks. Leading applications include full automation of the mortgage payments process and of the semi-annual audit report, with data pulled from over a dozen systems.

Investing in banking automation

The front-stage includes targeted ads, where customers are exposed to ads that are tailored for them. At this stage, the support processes focus on integrating AI as a methodological tool to better understand customers’ banking adoption behaviors, in combination with utilizing machine learning to evaluate and update segmentation activities. The building block at this stage, is understanding the factors of online adoption.

Incumbent banks face two sets of objectives, which on first glance appear to be at odds. On the one hand, banks need to achieve the speed, agility, and flexibility innate to a fintech. On the other, they must continue managing the scale, security standards, and regulatory requirements of a traditional financial-services enterprise. Over several decades, banks have continually adapted the latest technology innovations to redefine how customers interact with them. Banks introduced ATMs in the 1960s and electronic, card-based payments in the ’70s. The 2000s saw broad adoption of 24/7 online banking, followed by the spread of mobile-based “banking on the go” in the 2010s.

However, customer satisfaction is equally important to the success of your institution. Advances in technology have raised the bar on customer expectations making it difficult for organizations that don’t implement the most customer-friendly technology to remain competitive. With the best intelligent automation and natural language processing solutions, you can optimize a wide range of digital customer interactions. ICICI Bank in India embedded basic banking services on WhatsApp (a popular messaging platform in India) and scaled up to one million users within three months of launch.9“ICICI Bank crosses 1 million users on WhatsApp platform,” Live Mint, July 7, 2020, livemint.com. The key to an exceptional customer experience is to prioritize the customer’s convenience wherever possible.

Decide what worked well, which ideas didn’t perform as well as you hoped, and look for ways to improve future banking automation implementation strategies. Timesheets, vacation requests, training, new employee onboarding, and many HR processes are now commonly automated with banking scripts, algorithms, and applications. Lenders rely on banking automation to increase efficiency throughout the process, including loan origination and task assignment. Learn how top performers achieve 8.5x ROI on their automation programs and how industry leaders are transforming their businesses to overcome global challenges and thrive with intelligent automation. Automation enables banks to respond quickly to changes in the market such as new regulations and new competition.

For slower-moving organizations, such rapid change could stress their operating models. At this stage, banking institutions aim to convert website traffic to credit solution applicants. The integration of robo-advisors will help customers select a credit solution that they can best qualify for, and which meets their banking needs. The availability of a robo-advisor can enhance the service offering, as it can help customers with the appropriate solution after gathering basic personal financial data and validating it instantly with credit reporting agencies. Trivedi (2019) found that information, system, and service quality are key to ensuring a seamless customer experience with the chatbot, with personalization moderating the constructs. Robo-advisors have task-oriented features (e.g., checking bank accounts) coupled with problem-solving features (e.g., processing credit applications).

Each platform team controls their own assets (e.g., technology solutions, data, infrastructure), budgets, key performance indicators, and talent. In return, the team delivers a family of products or services either to end customers of the bank or to other platforms within the bank. In the target state, the bank could end up with three archetypes of platform teams.

How Intelligent Automation Is Transforming Banks

It enables a bank to acquire the agility and 24/7 access of fintech firms without losing any of its gravitas. One of the ways in which the banking sector is meeting this ask is by adopting new technologies, especially those that enable intelligent automation (IA). According to a 2019 report, nearly 85% of banks have already adopted intelligent automation to expedite several core functions. In banking M&As, the consolidation and standardization of financial data are crucial. Automated platforms can harmonize disparate data systems from merging institutions, ensuring seamless integration.

Similarly, with better corporate intelligence, you are better positioned to minimize operational risk. Using your own custom taxonomy, you can track suspicious language across text-based documents so you can spot potentially suspicious activity sooner. And with intelligent automation you can consistently apply this preventative strategy and reduce the probability of incurring a costly penalty and/or financial breach. Equally important is the design of an execution approach that is tailored to the organization. To ensure sustainability of change, we recommend a two-track approach that balances short-term projects that deliver business value every quarter with an iterative build of long-term institutional capabilities.

To Deliver Faster, Personalized Customer Experiences

InfoSec professionals regularly adopt banking automation to manage security issues with minimal manual processing. These time-sensitive applications are greatly enhanced by the speed at which the automated processes occur for heightened detection and responsiveness to threats. Digital transformation and banking automation have been vital to improving the customer experience.

• Automation helps banks streamline treasury operations by increasing productivity for front office traders, enabling better risk management, and improving customer experience.
• This is particularly beneficial when one of the entities involved in the merger is distressed, and there’s a need to quickly identify and address high-risk loans or nonperforming assets.
• Automating repetitive tasks reduces employee workload and allows them to spend their working hours performing higher-value tasks that benefit the bank and increase their levels of job satisfaction.
• They manage vendors involved in the process, oversee infrastructure investments, and liaison between employees, departments, and management.
• Not surprisingly, the second most prominent concept is “banking,” which is expected as it is the sector that we are examining.
• Almost 80% of the banks in the USA are cognizant of the potential benefits offered by AI (Digalaki, 2022).

Companies in the banking and financial industries often create a team of experienced individuals familiar with the entire organization to manage digital acceleration. This team, sometimes referred to as a Center of Excellence (COE), looks for intelligent automation opportunities and new ways to transform business processes. They manage vendors involved in the process, oversee infrastructure investments, and liaison between employees, departments, and management. But even this powerful sector can’t ignore the fact that technology is changing both customer expectations and its core processes. Much of this is being driven by intelligent automation which, combined with a natural language solution, provides an indispensable business tool.

Since 2016, there has been a surge in research linking the themes of Processes and Customers. More recently, since 2017, papers combining Customers with Strategy have become more frequent. The journey to becoming an AI-first bank entails transforming capabilities across all four layers of the capability stack. Ignoring challenges or underinvesting in any layer will ripple through all, resulting in a sub-optimal stack that is incapable of delivering enterprise goals. Traversing this path won’t be easy but the sooner the banking industry begins this journey, the better it will be for everyone, even those whose jobs maybe most impacted by automation.

Faster front-end consumer applications such as online banking services and AI-assisted budgeting tools have met these needs nicely. Banking automation behind the scenes has improved anti-money laundering efforts while freeing staff to spend more time attracting new business. The banking industry has particularly embraced low-code and no-code technologies such as Robotic Process Automation (RPA) and document AI (Artificial Intelligence). These technologies require little investment, are adopted with minimal disruption, require no human intervention once deployed, and are beneficial throughout the organization from the C-suite to customer service. And with technology fundamentally changing the financial and consumer ecosystems, there has never been a better time to take the next step in digital acceleration. Leading South African financial services group Old Mutual integrated multiple systems into one platform to provide employees with a holistic view of both customers and services available.