Banking and end-user automation: An unfulfilled mission
Even something as revolutionary as process innovation tends to focus more on product-specific interventions - as opposed to the end-to-end client experience. Inevitably, this deters banks from reaping the benefits of business-defining opportunities.Arindam Bannerjee
Inventor Tom Preston-Werner once famously said,
“You’re either the one that creates the automation or you’re getting automated.”
According to a PWC report titled “An Ounce of Prevention, Why Financial Institutions need Automated testing”, the following stats were highlighted.
70% of the industry agrees that testing and implementation must be automated
22% of all defects do not get identified before the software goes live
With digital transformation pushing the boundaries of technology and permeating every facet of customer engagement – whether it’s online banking, mobile payments or allied transactions – end-user automation has irrefutably ushered in a new wave of innovation and cataclysmic changes, in the financial sector.
But the problem of legacy continues
Despite long-lasting advancements in future-driven technology, countless banks continue to be saddled with daunting legacy challenges that dilute the efficiency of new initiatives.
Even something as revolutionary as process innovation tends to focus more on product-specific interventions - as opposed to end-to-end client experience. Inevitably, this deters banks from reaping the benefits of business-defining opportunities.
The sheer number of customer facing digital channels has grown exponentially in the wake of digital initiatives. However, existing applications remain irreplaceable even as they’re in charge of majority of business processing logic.
This has led to an entanglement of complicated integration points between legacy-driven back-end applications and customer-servicing digital touch-points. In other words, any banking transaction – be it retail lending, loans or credit interplays - entails traveling through heterogeneous applications and platforms.
Furthermore, most transactions have long life cycles spanning multiple calendar days, involving validation of intricate regulatory compliances and financial calculations. Needless to say, testing such lifecycles and domains involving a plethora of platforms poses a unique set of challenges.
The way forward
For financial institutions, the need of the hour is to embrace automation across both front and back-end operations to create a sustainable differentiation.
Automating the customer experience of financial services, can make the journey to accomplish the following purposes effortlessly frictionless:
· Enhance brand value
· Drive profitability
· Reduce operational costs
· Modernize legacy assets to enable next-gen business capabilities
· Ensure consistency across domains
· Improve productivity
The first step is to identify all the customer touch points that need to be automated and delivered on a consistent basis – regardless of the channels.
Then commences the real hard work of defining and identifying the processes necessitating results-driven automation. 360 degree automation is only possible if all process nodes have access to accurate data at the right time, to make better business decisions whilst reducing the tediousness in workflows.
Next, banks need to pinpoint legacy assets to extract the data necessary for automating the processes and interspersing them with superior customer journeys.
One of the areas where end user automation has begun to flourish for effective customer services is investment advisory.
Chatbot software and roboadvisers are now playing an increasingly important role in wealth management thanks to their ability to understand patterns of existing market conditions and setting new benchmarks.
In addition, they are facilitating the cross-selling of allied services.
Machines now recognize both expressions and emotions - allowing banks to build good relationships with their customers - with robots that not only empathize with customers, but also resolve complex problems.
Why End Automation Matters
Automation down to the last mile helps banks accelerate and optimize proactive digital experiences for users. By focusing on business-driven conversations against the overarching theme of digitalization, institutions are able to use their resources on areas that matter most.
This results in one of the following:
1) Brilliant execution of customer-centric service delivery to boost productivity and operational efficiency
2) Builds a seamless yet efficacious brand experience
3) Creating new touch points that create new revenue streams
In addition, the value of applications, assets or systems that are not driving customer satisfaction can also be looked at as an area to cut costs.
Thankfully, examples of imbuing end user automation are introduced with great frequency and with no imminent signs of abating.
Intercepting on-demand purchases of items and extending financial offerings at the point of sale and in real-time
Integrating the customer's’ transaction needs in a user-friendly interface via a self-sufficient mobile bank
Allowing for the provision of non-banking as well as high-end banking services to small and medium-sized businesses. Here, automation can let banks source non-banking set of products through APIs from third party providers; moreover, they will be brokered by these institutions on behalf of their customers.
Combining robotics with user automation to provide futuristic and frictionless services.
Using voice commands to perform tasks like paying bills, selecting mutual funds, interlinking DEMAT accounts, money transfer, etc.
Banks certainly know what to do with the people’s money and who come from all walks of life. Little wonder that the banking sector is realizing the urgency to fast track the uptake of new innovations in terms of cost savings.
It is a given that AI-based end user automation leapfrogs efficiency, minimizes manual errors and speeds up service delivery.
But just how significant are the cost savings?
As per a technology vision survey from Accenture, about 50% of all banks commended at least 15% cost savings to automating their systems over the past 2 years. In some areas, costs were lowered by as much as 80% and time-to-deliver was reduced by 90%.
In another study by Citigroup, regulation and compliance processes cost the banking sector a whopping $270 billion per year – or 10% of their operational costs.
The message is clear:
Either increase headcount to handle the enormity of such compliances, or leverage automation to achieve organic success.
In future, successful banks will be those that are able to integrate human creativity and tilt the tide of existing business models in their favor.
To this end automation is a game changer beyond measure. Apart from delivering (much) better experience and reducing cost of services, it is also failure-proof and guarantees strong and better return on stakeholders’ investment.