One word that the banking and financial services industry takes very seriously is – AUTOMATION. And why they shouldn’t, after all, there are more than 800 procedures on average within a bank. Performing all of them without any errors or missing a compliant requirement is not an easy job but automation makes them happen in the blink of an eye. RPA- robotic process automation- has been the main driver so far but hyper-automation in banking is taking the main seat as the technologies mature. Some of the biggest banks like HDFC, ICICI, JP Morgan Chase, Bank of America, CitiBank, are the early adopters in this new era of intelligent automation.
RPA, or Robotic Process Automation, has become very common in banks to automate those mundane, repetitive tasks that can bog down their workdays. But RPA has its limits. It's fantastic for those straightforward, rule-based tasks, but when it comes to automating more complex processes, it often falls short. Therefore, banks and financial institutions need to go beyond RPA and shift to hyperautomation that includes technologies like ML, NLP, OCR, chatbots, advanced analytics, intelligent BPM suites, and process mining.
Besides automating everything, hyperautomation brings in the capacity to integrate human expertise into the automation process. Through collaborative intelligence, technology, and human workers collaborate hand in hand. They get the opportunity to train automation tools and other software, progressively transitioning towards AI-driven decision-making.
Today, banks and financial institutions are dealing with the challenges that challenge their very existence. Two of them are:
Customers are increasingly using digital channels for all their needs including banking. However, their expectations are not only limited to merely receiving quick banking services on the web and mobile apps. They expect personalization at every step. AI, an important part of hyperautomation, is best at helping banks deliver personalization at almost every channel.
Amazon, Google, and other tech giants to non-bank lenders and startups are giving tough competition to the core banks and financial institutions. They have vast resources and can rapidly expand their financial services. Whether it's in payments, lending, or wealth management, their deep pockets and reach can challenge banks on multiple fronts.
Hyperautomation in banking will not only help them in overcoming these challenges but also make them future-ready.
Hyperautomation significantly enhances operational efficiency within banks. It automates routine tasks, such as data entry, document processing, and transaction reconciliations, reducing the need for manual intervention. This not only accelerates processes but also minimizes errors, resulting in a more reliable and cost-effective operation.
Banks can leverage hyperautomation to provide personalized, 24/7 services to their customers. Chatbots and virtual assistants powered by AI can respond to inquiries and perform transactions around the clock. Faster response times and the ability to tailor services to individual customer needs lead to improved customer satisfaction and loyalty.
Staying compliant with ever-changing regulations is a significant challenge in the banking industry. Hyperautomation helps banks adapt quickly by automating compliance checks and monitoring for fraudulent activities. This reduces the risk of penalties and reputational damage while maintaining trust with regulators and customers.
Hyperautomation also results in cost savings. By automating labour-intensive tasks and reducing errors, banks can lower operational costs by up to 30%. Additionally, the scalability of hyperautomation allows banks to handle increased workloads without the need for a proportional increase in human resources.
Irrespective of the industry, customer onboarding is a lengthy process but it's risky as well for the banking industry. Proper customer screening and evaluating their credit history save a bank from non-compliance and money laundering. Hyperautomation solves both the challenges of time-consuming and the risks involved.
With banking mobile applications, customers can now embark on a self-onboarding journey saving the time of both customers and banking agents. AI systems further make the process safer by doing real-time KYC checks and assessments of applicants’ creditworthiness.
One of the most time-consuming tasks in the banking sector is loan processing which takes around 30-45 days even with loan origination systems in place. Intelligent automation solutions not only speed up the process but also bring transparency and accuracy with real-time insights into the customer data. It can save up to 70% of loan processing time.
Payment fraud is one of the biggest challenges banks and financial companies face. Last year alone, fraud worth 1.59 billion U.S dollars happened in the United States as per Statista. Preventing these fraud and losses is however time and resource-intensive.
Hyperautomation enables banks to set up automated systems to identify abnormalities in transactions, and timely notify the compliance team in case of fraudulent activities. Not just present but future frauds can also be predicted by leveraging AI and ML in these solutions.
The BFSI sector faces a multitude of challenges while preparing compliance reports. From collecting and sorting vast amounts of data from scattered resources and systems to creating and maintaining audit trails. Even traditional automation methods cannot handle the complexity and need for real-time insights into the process.
In contrast, modern technologies, such as hyperautomation (combining robotic process automation, AI, and machine learning), offer advanced capabilities for compliance reporting. They can handle large volumes of data, adapt to changing regulations, ensure data accuracy, provide real-time reporting, and offer intelligent data validation and transformation. This makes compliance reporting more efficient, accurate, and adaptable to the evolving regulatory landscape.
Hyperautomation is empowering the BFSI industry to rethink and reinvent work processes. Moreover, it is paving the way for solutions that could solve not only yesterday’s problems but also future challenges. As technology advances, automation will get advanced too where multiple technologies will complement each other to deliver true automation.
Softude specializes in Artificial Intelligence, Machine Learning, NLP, OCR, RPA, Low-Code, Computer vision, and everything that is required for hyper-automation in banking. Utilizing these technologies, we have offered multiple banking and financial services solutions such as compliance monitoring, contract management, loan origination, and KYC integration.
Check out here: How Softude is bringing a tech-powered change in BFSI sector.
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