Digital banking on the customer side is not a new concept. Customers have had access to digital banking for decades, from ATMs to internet banking. Banks that lack some level of automation struggle to compete in a consumer and commercial banking market that prioritizes ease and efficiency.
Surprisingly, many institutions still need a lot of work and staff to keep up with back-office banking. The fact that there is still a lot of paper involved in back-office banking procedures in the modern day is even more shocking. However, that is changing due to process automation.
If automation is already something you are familiar with, you will discover several methods to improve it in this post. Or, if you’re not, you’d be aware of its advantages and understand why you ought to automate your procedures.
Benefits of Process Automation in Banking and Financial Services
1. Gain visibility of processes and tasks
Process automation offers the delicate precision required to comprehend what occurs regularly in the banking business process and how to change course to enhance, optimize, and rethink how they function.
2. Drive digital transformation and innovation
In recent years, many financial institutions from across the globe have been moving to adopt digital transformation solutions such as mobile apps, digitizing trade documentation, and automating cross-border payments.
Process automation allows banks to boost confidence. And this happens by concentrating on the changes that will yield a significant return on investment compared to the business strategy and may win support for digital transformation initiatives.
3. Reduce regulatory and compliance risks
By automatically creating regulatory compliance reports using data extracted and configured across platforms, banks may save time and eliminate human mistakes. They can also increase the efficiency and precision of sanctions checks, which will boost compliance, lower risk, and give clients quicker cash cycles.
It can improve ways Bank Automation Processes.
Mortgage lending is one of the bank departments that requires the most paperwork since it involves many manual duties. They include preparing applications and supporting documents, underwriting procedures, and loan closures.
According to the Mortgage Bankers Association, the average price to originate a loan was $7,195 in an article published by Housing Wire in 2015. Staff salaries were one of the essential expenditures involved with mortgage financing.
As well as “document review and audit, data input, document tracking, internal and external communication, and coordination with third parties,” also involved performing. Human error increases the money banks spend on mortgages and processing expenses, and the bank personnel is compelled to go back and repair mistakes.
But process automation, more than anything else in mortgage lending, boosts the productivity and effectiveness of a bank’s workforce regarding case management. According to a PMR Consulting study, referenced in a Fiserv report, “loan processors might experience a productivity improvement of 30 percent” when they apply automation.
While lending is substantial, a big bank’s human resources department contributes significantly to total operating costs.
It is especially beneficial to lower these expenses when fresh talent is recruited through robotic process automation.
A human resources department may utilize automation to swiftly sift through many resumes to identify whether individuals satisfy the bank’s requirements at that time. More significantly, an automation process can actively seek eligible people for positions in the banking business. In other words, a bank is not forced to choose from a pool of candidates.
Effectively Identify Fraudulent Check Activity
Within the first part of 2020, when compared to the same period in 2019, Jack HenrySM found a 35% rise in recommendations for more prolonged deposit holds and an 11% rise in proposals for transaction rejections.
It implies that banks and credit union workers need a solution to quickly and easily provide service. While efficiently identifying fraudulent transit check activity in light of the ongoing growth in payment fraud (particularly against checks and wire transfers).
To be ready for the comeback of check fraud, automating your check fraud prevention procedure can assist. And this occurs by sending alerts of potentially dangerous deposits each time a transaction is completed. What happens next? Take a proactive approach to tackle check fraud. Create an automated system that uses real-time notifications to stop check fraud before it affects your account holders.
Prioritize Process Analysis & Optimization
Since most fundamental banking operations are cross-functional and no one is in charge of the whole process, prioritizing process analysis and improvement presents an apparent issue. That is why an end-to-end evaluation is required.
Process improvement is only one aspect of process optimization.
It entails locating integration possibilities and using technology to automate data transfer from one person to another. And from one application to another, reducing the workload on staff members throughout the firm.
The definition, enhancement, and administration of a company’s whole business process (BPM) aim to accomplish three things:
- The strategic direction’s clarity
- Alignment with the resources of the organization
- Increased rigor in everyday operations
What comes next? Consider a consulting firm that provides a range of engagement services. To help you adopt automation, plan, develop, and re-engineer business processes in the banking sector, and improve company operations.
Automation is crucial to many banks and financial services firms’ digital transformation efforts. However, to get the most significant benefits from business process automation, you will need a competent and experienced partner to assist you with the technology.