Financial and banking services have always been synonymous with time-consuming, complex, and lengthy processes that involve extensive paperwork. However, in recent years, digital-only banks and fintech solutions have transformed our outlook on banking services. Why? Consumers are leaning heavily toward the convenience, accuracy, and speed that digital banking entails. Automation has changed the dynamics. We no longer need to stand in queues, experience delays in loan approvals, or wait several days for money transfers. Everything can be accomplished instantly, right at your fingertips.

‍

Did you know? According to McKinsey, over 25% of bank processes are already automated and the global banking process automation market is projected to rise by 23.7% from 2023 to 2032. There is no better time than now to focus on sustainable growth and future development. Yet, most banking and financial institutions are still rooted in traditional old practices. 

‍

How trustworthy are these practices? And who can vouch for their accuracy? Ask yourself this - Do age-old methods allow time to scale your business? Do they give your employees and customers the seamless experience they crave? 

‍

We think not. Which is why automation is crucial.

‍

Automation can help get rid of challenges faced by banks while also optimizing their processes to provide an enhanced experience. 
‍

Key challenges in the banking sector
‍

Banks operate under strict regulatory requirements to maintain high levels of security and compliance. At the same time, they face increasing pressure to improve operational efficiency without compromising these standards. While workflow automation offers a promising solution, its successful implementation requires a thorough understanding of the unique challenges within the sector. 

• ‍Regulatory compliance: Banks are under immense pressure to keep up with ever-changing regulations, from anti-money laundering to international standards. This means they need to be precise, timely, and error-free in their reporting. Traditional manual practices fail to keep up with these processes, making automated systems a better choice.
  
  

• Operational efficiency: Customer service, loan processing, and payment approvals often experience inefficiencies due to the manual nature of work. These systems struggle to keep up with the massive amounts of data and high transaction volumes that businesses face today.
  
  
• Security and fraud: Banks are usually the primary target of cyberattacks, with the intention to steal sensitive information and data. Manual systems struggle to detect and respond to these threats in real time, leaving banks vulnerable to breaches and security risks. Maintaining robust security measures to protect against these attacks is an ongoing concern for the industry.
  
  
• Differing customer expectations: A key challenge for banks is the differing expectations of their customer base, particularly as younger generations become the primary target market. These customers demand modern features such as instant payments and mobile apps, unlike older generations who may have different preferences. Meeting these evolving needs and delivering personalized experiences for a diverse customer base is increasingly difficult without the right tools and strategies in place.

‍

While these are some problems banks face in retaining their customers, let’s see how automation helps them overcome these challenges and more. 
‍

Use cases of workflow automation in the banking sector
‍

Automating workflows reduces errors, simplifies manual processes, and ensures compliance with safety policies. Let's explore some areas where automation can revolutionize banking operations.

‍

• Loan application and approval automation: Loan approvals can be a lengthy process, as banks must carefully review and analyze numerous documents to assess a borrower's eligibility. What if all this can be done automatically? Automation can streamline loan approvals by reviewing documents and verifying applicant information against financial history and required criteria. It speeds up the process and improves customer satisfaction by providing accurate and timely services. It also lets banks handle a higher volume of loan applications without appointing more employees.
  ‍
• KYC (Know Your Customer) compliance: To ensure security compliance, banks must adhere to strict KYC regulations. Automation helps with data collection from customers, verification, and reporting. It takes automation tools seconds to run verification checks and cross-check customer information with their documents compared to manual processes. You can also use tools like Tiny Command to verify customer data before they can proceed with real-time requests.

• ‍Fraud detection and risk management: JP Morgan’s annual payments fraud survey revealed a 10% increase over 2022 in card-related fraud, even as overall digital fraud decreased for businesses. Detecting and preventing fraud remains a critical challenge for banks. With AI-driven automation tools and machine learning algorithms, real-time transaction monitoring has become more effective at identifying suspicious activities, such as irregular transactions, unusual behavior, or inaccurate reports. These advanced tools allow banks to mitigate fraud risks early, helping to ensure the safety of both the institution and its customers.
  ‍

• Client onboarding automation: For banks, thoroughly knowing their customers is essential for security and compliance. This includes tasks like setting up accounts, conducting background checks, and ensuring all documentation is in order, all of which are part of the client onboarding process. However, manual onboarding can be slow and error-prone, leading to delays and inefficiencies. Automation streamlines this process, improving speed and accuracy.
  ‍
• Mortgage processing: Automation can make getting a mortgage a lot faster. It can do things like estimate the value of a property, collect paperwork, and check if someone can afford a loan. This means the whole process, from applying for a loan to getting an answer, can be done much quicker.
  ‍
• Account reconciliation: With the use of automated tools like Tiny Command, you can simplify the reconciliation of accounts. Automation can instantly compare your bank's records with outside information, like bank statements and payment info. If there's anything wrong, it will let you know right away. This helps keep everything accurate and efficient.
  ‍
• Document management: Banks handle massive amounts of paperwork daily, from customer files to loan documents, making manual tracking nearly impossible and prone to errors. Relying solely on employees to manage this volume is inefficient. Automation offers a solution by automating the uploading, storing, and management of documents, reducing hassle and errors. It ensures that the right paperwork reaches the right people when approvals are needed, streamlining workflows and eliminating unnecessary paper shuffling. This not only improves accuracy but also enhances efficiency in document management processes.

‍

These are some important areas where automation helps banks maintain their processes without any inefficiency. 

‍

Case studies

‍

Let’s take a look at a few case studies to help you understand how automation has helped banks grow. Take the Commonwealth Bank of Australia, for example. They used H2O.ai's Document AI to tackle their mountain of paperwork. Instead of spending hours sorting through files, the AI system can whiz through a huge pile of documents in just minutes. This frees up their employees to focus on more important things, like helping customers.

‍

Another example is the Banca Mediolanum in Italy. They're using AI-powered credit scoring models that work with SAS Viya, a cloud-based program that can access, combine, and understand different documents. This helps them give customers a quicker and smoother experience while also making sure they're following all the latest regulations.

‍

These are just a couple of ways banks are using AI to say goodbye to paperwork headaches and hello to happier customers and efficient processes. The future of banking looks bright thanks to AI and RPA (Robotic Process Automation). RPA can handle boring, repetitive tasks like data entry, customer service, and transactions. Meanwhile, AI can use data to predict what customers need and make smart decisions. Together, these technologies will change the way banks work for the better.

‍

And if you’re ready to dive into the world of automation, reach out to our automation experts.