How Banking Automation is Transforming the Industry?

The banking industry, as we have historically understood it, is undergoing a significant transformation, with automation emerging as an essential component for survival. The swift growth of digital banking technologies and the advent of FinTech enterprises have fundamentally altered the dynamics of the sector, rendering banking automation a requisite rather than a more option.

Merely a decade ago, digital banks were new entrants catering to specific niche markets. However, as customers grow progressively more technologically astute, there has been a notable shift in preferences towards automated digital banking services in favour of traditional banking methods.

Recent forecasts from Statista indicate that the Net Interest Incomes generated by digital banks are set to reach an extraordinary $650.30 billion by the close of 2023. Yet, this represents merely the beginning of a much larger trend. Between 2023 and 2028, this figure is projected to expand at a compound annual growth rate of 13.39%.

The rising popularity of next-generation FinTechs and digital banking can be attributed to several compelling factors, including but not limited to:

• Continuous 24/7 availability and access to core services such as fund transfers and loan management.
• Seamless user experience delivered through intuitive self-service portals and mobile applications.
• Highly personalised financial insights and tailored recommendations.
• A straightforward, paperless onboarding process.
• Immediate transaction capabilities.

Traditional banks now find themselves at a critical juncture, where adapting the evolving industry is no longer optional. Automation presents a vital solution to address many of the challenges confronting the banking sector.

We shall explore how automation can serve as a transformative tool for banks, outlining its principal advantages. We will also provide essential insights into automating your business processes efficiently.

Challenges in the Banking Industry That Automation Aims to Address

As technological advancements reshape consumer expectations and revolutionise the competitive dynamics of the banking and financial industries, traditional banks find themselves under pressure from multiple angles.

While the rise of digital banking and FinTechs competitors presents a significant challenge, the deeper, structural difficulties compel established banks to reassess and modernise their operational frameworks. A more detailed examination of these challenges will enable us to grasp their scope more clearly.

Inability to deliver a dynamic range of products

Modern consumers expect a diverse array of financial products that cater specifically to their evolving needs. However, traditional banks, constrained by outdated legacy systems, often find it challenging to swiftly launch new offerings. This inability to respond dynamically results in missed revenue opportunities and hampers customer retention.

Absence of personalised customer experiences

In an era where digital natives demand bespoke experiences, many banks persist with a one-size-fits-all strategy. Implementing changes requires laborious manual research, extensive analysis, and collaboration across departments, all of which are time-consuming.

Furthermore, the introduction of new products necessitates intensive training for the customer support team, adding significant strain to resources.

Procedural inefficiencies in routine operations

In an age where immediacy is highly prized, procedural inefficiencies in everyday banking tasks, such as loan approvals, account creation, and even routine fund transfers, frequently exasperates customers, prompting them to seek swifter alternatives.

The expectation has shifted towards uninterrupted, 24/7 banking services, as opposed to reliance on traditional business hours.

Escalating staffing and operational expenditures

The operation of physical branches is becoming progressively burdensome, primarily due to escalating factors such as:

• Real estate costs and rentals
• Utility payments
• Corporate and housing taxes
• Salaries and wages

These cumulative financial strains cause traditional banks to falter in retaining their competitive advantage.

Inability to harness data for business advancement

While banks possess an abundance of industry-specific and customer-related data, they frequently struggle to harness this valuable resource effectively. Typically, this data remains unprocessed and unorganised, inhibiting its use in meaningful analysis. Consequently, banks often fail to derive actionable insights crucial for business growth and strategic decision-making.

Limited scalability and cost of physical data centres

A considerable number of traditional banks remain dependent on physical data centres for their storage needs. However, this reliance poses a significant challenge: the inability to scale operations up or down with the requisite agility when circumstances demand swift adaptability.

Moreover, the maintenance of such physical infrastructure incurs an array of additional costs, including real estate expenditure, utility consumption, software licensing fees, and insurance premiums, among others.

These accumulated expenses necessitate substantial and continuous investment, further constraining profit margins and reducing operational flexibility.

Security challenges in the digital age

In the modern landscape, banks frequently find themselves operating within a hybrid framework that amalgamates legacy manual processes with semi-automated systems, thereby exposing them to security vulnerabilities from both realms. Consequently, the safeguarding of data, the mitigation of fraud, and the management of potential cyber threats have become pressing priorities.

Sustainability pressures

As global discourse increasingly pivots towards sustainability, banks are under considerable pressure to realign their operations and investment strategies in accordance with environmentally responsible practices.

Advantages of Banking Automation

The promising aspect for the banking sector is that automation possesses the capacity to solve an array of challenges. Allow us to explore the primary benefits that banking automation proffers.

Streamlined and efficient operations

Traditional banking processes are often characterised by a multitude of steps that cause procedural delays. Consider, for instance, the process of loan approval.

The journey from the receipt of loan applications to the validation of eligibility, the verification of documents and credit ratings, the management of mortgages, and ultimately proceeding for final approval is full of opportunities for human errors and delays at each stage.

Fortunately, a substantial proportion of these tasks can be automated, thereby minimising the necessity for human intervention. Such a shift not only addresses operational delays but also contributes to a reduction in operational costs. According to a report by Accenture in 2021, 43% of banks that embraced automation successfully realised their cost-saving aspirations.

Enhanced marketing initiatives

In light of the intensely competitive and ever-evolving market landscape, banks must undertake a comprehensive overhaul of their traditional marketing and branding strategies. By leveraging automation tools alongside various data analytics resources, they can effectively engage in:

• Lead management
• Customer base segmentation
• Customisation of marketing campaigns
• Real-time effectiveness tracking

Automation tools further facilitate the comprehension and analysis of customer responses and sentiments regarding particular marketing campaigns, thereby enabling the identification of the most effective promotional channels.

Enhanced customer experience

In an era where immediacy is paramount, customers exhibit a marked reluctance to await business hours for the resolution of their queries. Fortunately, the utilisation of automated chatbots facilitates the expeditious resolution of a myriad of issues, thereby liberating human agents to devote their expertise solely to complex and critical tasks.

But what of the management of disgruntled customers? This dilemma can similarly be mitigated through the advanced sentiment analysis capabilities embedded within many contemporary automated chatbots.

Improved fraud detection at lower costs

Financial fraud presents considerable challenges for both customers and banks, leading to significant losses. In 2022 alone, the US banking sector incurred a staggering $1.59 billion in losses due to payment transfer fraud.

AI-driven banking automation tools can utilise advanced machine learning algorithms to swiftly analyse millions of transaction patterns, enhancing financial security while simultaneously reducing costs.

Agile regulatory compliance

The continuously evolving regulatory landscape represents a persistent challenge for entities operating within the financial and banking sectors. Given the intricate interconnectivity of the global banking system, financial institutions frequently find themselves compelled to rapidly adapt to dynamic regulatory policies.

However, ensuring compliance through manual processes is often a laborious and resource-draining endeavour.

In contrast, the implementation of an automated system facilitates the swift integration of new regulations, rendering them operational within mere days, if not hours.

Advanced scalability

In the contemporary, ever-evolving financial landscape, the capacity of banks to achieve scalability has become paramount. In this regard, automated systems assume a central role, offering the requisite adaptability to promptly respond to shifts in market dynamics, surges in customer demand, and the constant evolution of technology.

Who Utilises Banking Automation?

Banks and various financial institutions are increasingly deploying automation technologies across multiple departments, encompassing, but not confined to, the following areas:

• Customer service: automated chatbots can be used to handle simple, routine requests, freeing up agents to perform more complex tasks.
• Operations and transactions: processing payments, transferring funds, and approving loans may all be done more quickly and accurately with the use of automation, which also cuts down on errors.
• Loan processing: loan applications, credit history, and financial information can all be evaluated by automated systems to quickly identify risk and eligibility.
• Accounting and finance: banks can automate tasks like data entry, financial reporting, expense management, budgeting, forecasting, and many others to improve efficiency, accuracy, and the ability to make data-driven decisions.
• Risk management and compliance: automation helps banks monitor transactions and activities for compliance with regulations and internal policies, generate reports, and quickly identify issues, improving regulatory adherence and risk management.
• Fraud detection and prevention: banks utilise automation to analyse transaction and payment data in real-time and identify suspicious trends and fraud, thereby allowing for quick response and risk reduction.

Implementing Banking Automation with Creatio

Having elucidated the myriad ways in which automation can bring positive transformations within the banking sector, it is imperative to identify a solution that is both straightforward to implement and highly functional. Enter Creatio, a sophisticated CRM and no-code platform designed to automate banking workflows and enhance customer engagement while affording users the utmost flexibility.

Creatio's tailored solution for financial institutions encompass a robust array of tools and automation capabilities that address various aspects of banking workflows, ranging from marketing and sales automation to lending and compliance management. It empowers banks to deliver exceptional customer experiences, streamline processes, and remain agile and compliant in a rapidly evolving financial landscape.

Here’s how Creatio facilitates this endeavour:

• Marketing: enhance demand generation with multichannel marketing campaigns tailored for diverse marketplaces and geographical regions.
• Sales: oversee sales opportunities in alignment with predefined automated workflows that enable the execution of the most effective course for each potential customer.
• Customer experience: elevate customer experience by ensuring prompt responses to inquiries, efficient resolution of issues, and provision of personalised services.
• Lending: streamline the process of loan origination, underwriting, and approval processes through automated digital workflows and comprehensive customer 360 data integration.
• Compliance management: safeguard compliance, mitigate risks, and fulfil regulatory obligations through consolidated data management, comprehensive reporting, and automation tools.
• No-code customisation: tailor your system to the specific needs of the bank and adhere to regulatory specifications without necessitating the involvement of IT specialists or programmers.
• Scalability: manage increased transaction volumes and user loads while maintaining superior performance and reliability.

Conclusion

Whilst it is indisputable that automation services possess the capacity to alleviate numerous challenges associated with the banking industry, the implementation of such systems frequently proves to be both costly and resource-intensive.

In this context, Creatio’s no-code platform emerges as a transformative solution. The necessity for an advanced IT team to oversee this user-friendly system is rendered obsolete. The flexibility and customisability mean you can easily tailor it to your organisational needs.

Explore how Creatio's automation can revolutionise your banking operations

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