Intelligent automation in financial services: Use cases and risks

Exploring Intelligent Automation in Banking

Automation in Banking: Vital Considerations About Technology

RPA will be integrated with other emerging technologies, such as artificial intelligence machine learning (ML), to create more intelligent and versatile automation solutions. RPA can be used to analyze transaction data and identify potentially fraudulent activities in real-time, helping banks prevent financial losses and protect their customers. RPA has proven to be a game-changer in this regard by offering several benefits that significantly enhance efficiency in banking operations. In the 1990s Wall Street started using new, readily available technology to create new, more complex kinds of trading and investments.

By reducing the risk of errors, RPA helps banks maintain compliance and manage risks effectively. The governance challenges that arise from many intelligent automation use cases are similar to those of RPA. At WTW, Stoekel has established a centre of excellence that runs automations developed by business users through a series of governance checks. These include security and other technical controls, privacy impact assessments, and quality measures. Some institutions have had success in using machine intelligence to understand and optimise their business processes, says Grant Thornton’s Murphy. Process mining and intelligence can help organisations identify opportunities for automation and, in some cases, run A-B tests to see which process design works most effectively, he says.

Business Process Improvements in Banking

RPA combined with advanced analytics will enable banks to gain deeper insights into customer behavior, allowing for more personalized services and tailored products. RPA can automate account reconciliation processes, helping banks identify discrepancies and rectify them promptly, ensuring the accuracy of financial records. RPA can be employed to automate data entry and validation processes, reducing the likelihood of errors and ensuring data integrity. They can handle a high volume of transactions quickly and accurately, significantly reducing the time required to complete various banking processes. RPA bots can work around the clock, providing continuous support to the banking operations. This 24/7 availability ensures that tasks are completed without any downtime, contributing to enhanced efficiency.

Automation in Banking: Vital Considerations About Technology

They can also adopt

advanced authentication measures and continuously monitor for

potential security breaches. As smart home devices gain popularity, we can expect voice-enabled

transactions to rise. Customers can perform various banking tasks, such as

checking balances and making payments, using voice commands. Overall, intelligent automation may take careful planning and implementation.

The impact of automation

But after verification, you also need to store these records in a database and link them with a new customer account. Cybersecurity is expensive but is also the #1 risk for global banks according to EY. The survey found that cyber controls are the top priority for boosting operation resilience according to 65% of Chief Risk Officers (CROs) who responded to the survey. For example, banks have conventionally required staff to check KYC documents manually. However, banking automation helps automatically scan and store KYC documents without manual intervention. Automation is key to survival in a hyper-competitive market and increasing customer and employee satisfaction levels.

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Early adopters will hold a strong position while the late adopters, over time, are likely to lose competitiveness, potentially irreversibly. And it is also a great example of how banking has always been an innovative industry. If you’re of a certain age, you might remember going to a drive-thru bank, where you’d put your deposit into a container outside the bank building. Your money was then sucked up via pneumatic tube and plopped onto the desk of a human bank teller, who you could talk to via an intercom system. Another benefit of composable architectures is the ability to leverage emerging technologies or make changes as the market conditions shift.

Recent surveys of IT executives show that an increasing number of teams are establishing these CoEs in order to share best practices and drive organization-wide digital transformation. Using this standard can make this process easier and give your team a visual way of representing the process. It doesn’t matter where the reader sits, in IT or the business side of the organization, if they understand BPMN they will be able to interpret the model and give feedback. Knowing what you’re trying to automate is the first, most important step, and you need to think about the processes affected both up and downstream. We’re going to explore six concepts to keep in mind for your bank’s next digital transformation project. Automation and banking have been two peas in a technological pod since the 1934 introduction of the IBM ® 801 Bank Proof machine, a check sorting machine.

Automation in Banking: Vital Considerations About Technology

There is a lot to consider as you and your organization work through the internal control considerations related to mergers and acquisitions. To learn more about the role of internal controls in the M&A process, read our recent article. Whether your company is a public or private entity, M&A may be a significant milestone for you.

Respond to market conditions using automation in banking

Banks can use smart devices to

automate tasks, track assets, and monitor infrastructure. With IoT, predictive

maintenance keeps banking hardware like ATMs and servers operating

efficiently. RPA can automate identity verification, data entry, and document processing, making it faster and more accurate. Artificial intelligence and automation also can exacerbate a growing divide in the US between the rich and the poor.

Despite billions of dollars spent on change-the-bank technology initiatives each year, few banks have succeeded in diffusing and scaling AI technologies throughout the organization. Among the obstacles hampering banks’ efforts, the most common is the lack of a clear strategy for AI.6Michael Chui, Sankalp Malhotra, “AI adoption advances, but foundational barriers remain,” November 2018, McKinsey.com. Two additional challenges for many banks are, first, a weak core technology and data backbone and, second, an outmoded operating model and talent strategy. While this research is not specific to financial services, it underscores the value of automation and makes evident its applicability for banking. This leaves limited time and resources for higher-value activities, such as innovation, relationship-building and analysis.

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While challenges exist, the benefits of RPA implementation, including cost savings, enhanced accuracy, and improved customer satisfaction, make it a compelling choice for banks worldwide. Robotic Process Automation is revolutionizing the banking industry by streamlining operations, improving efficiency, and enhancing customer experiences. Backed by real-world case studies and industry data, it’s clear that RPA is not just a technological buzzword but a game-changer for banks seeking to thrive in an increasingly competitive and digitized landscape. RPA helps banks provide faster response times, quicker loan approvals, and seamless onboarding processes, leading to increased customer satisfaction. Regtech relies on interagency collaboration and private sector innovation to increase the speed at which federal and state laws can help detect and prevent abuses in the financial services industry. Regtech has also given rise to a slew of new jobs including those in the public (cyber public policymakers, for example) and private sectors (fintech jobs like engineers, programmers, and other private watchdog groups).

Automation in Banking: Vital Considerations About Technology

Happy employees create a virtuous experience loop that includes happy customers. So, at the start of any large-scale transformation project or effort to deploy automation in a particular vertical, it’s crucial to bring your people with you. To get the most from your banking automation, start with a detailed plan, adopt simple-but-adequate user-friendly technology, and take the time to assess the results. In the right hands, automation technology can be the most affordable but beneficial investment you ever make. Digital transformation and banking automation have been vital to improving the customer experience.

Transforming banking with artificial intelligence

He has led his clients through such challenges as mergers and acquisitions, divestitures, impairments, and recapitalization efforts. Over the course of Jim’s career, he has served some of the firm’s largest and most complex multi-national clients as well as small and mid-market and start-up private entities. Jim holds a Bachelor of Science in Accountancy from California State University in Fresno, CA. Robotic Process Automation, commonly referred to as RPA, is a technology that uses software robots or “bots” to automate rule-based and repetitive tasks within an organization. These bots can mimic human actions, such as data entry, calculations, and data transfer, to perform tasks with speed and precision.

Automation in Banking: Vital Considerations About Technology

JPMorgan, for example, is using bots to respond to internal IT requests, including resetting employee passwords. The bots are expected to handle 1.7 million IT access requests at the bank this year, doing the work of 40 full-time employees. And at Fukoku Mutual Life Insurance, a Japanese insurance company, IBM’s Watson Explorer will reportedly do the work of 34 insurance claim workers beginning January 2017.

Automation in Considerations About Technology

Traditional regulatory change in the United States tends to be extremely slow and bogged down in a system of bureaucratic red tape. Policies that may have seemed progressive in the 1930s are far too antiquated today and will need complete revamping to make sure such technological innovation is used for good. Often referred to as the ‘Fourth Industrial Revolution’, the 21st century is paving the way for rapid innovation in robotic process automation and artificial intelligence technologies – collectively known as intelligent automation. For this reason, many bankers already use automation for tasks like account opening, credit decisioning and more. In fact, one of the prerequisites of a comprehensive core banking platform is its ability to eliminate dual data entry.

  • And enabling platforms enable the enterprise and business platforms to deliver cross-cutting technical functionalities such as cybersecurity and cloud architecture.
  • Exhibit 3 illustrates how such a bank could engage a retail customer throughout the day.
  • Our team

    has a proven track record of developing cutting-edge financial apps like

    Expedipay and

    SmartStart.

  • Employees in that area should be eager for the change, or at least open-minded.
  • First, banks will need to move beyond highly standardized products to create integrated propositions that target “jobs to be done.”8Clayton M.

Read more about Automation in Considerations About Technology here.

  • These kinds of back and front office employees are expected to be slashed “by about a fifth to a third over the next few years.”[40] However, jobs related to technology, sales, advising, and consulting will be less affected, according to the Wells Fargo study.
  • With automation technology, the data is not only read and analyzed, but recognized in the context of patterns, leading to a great increase in the quality of automated decision-making.
  • To capture this opportunity, banks must take a strategic, rather than tactical, approach.
  • Analyzing

    real-time IoT data helps lenders to assess credit risk and to offer

    personalized interest rates.