With AI and Intelligent Process Automation taking charge, banking industry have not only increased their productivity but also dived deep to excel in the competitive space. Using AI-driven automation, banks are utilizing machine capabilities to enhance operations, scale, and save costs.
Digital staff can automate some portions of customer service by:
– Answering inquiries regarding accounts, loans, or cards
– Organizing bank statements, property documents, and financial papers
– Assisting loan officers with documentation.
Due to increasing customer demands, more regulations, and fiercer competition, banks must optimize and modernize their processes more than ever. Automation is being used by banks all over the world to respond to organizational and economic changes to reduce risk and provide cutting-edge customer experiences.
Decoding The Secrets Of Bank Automation
Banks can stay ahead of the competition, draw in and retain customers, cut expenses, and enhance the experiences of both customers and employees with the use of banking automation. By employing automation, banks may connect their systems and free their employees from excessive workloads. Because they have the knowledge and time necessary to provide clients with the best experience, employees feel more content and productive as a consequence of the reduced burden.
Keeping all this in mind, let’s explore the top 3 banking automation trends that are all set to rule the industry in 2023!
Banking Trends To Watch Out For In 2023
Trend 1: Digital Workforce
Digital Employees are a true boon as they can be customized to match specific banking needs and automate a variety of tasks. They can help reduce the amount of time spent on repetitive work in the front office and back office by addressing inquiries, sorting paperwork, and upgrading the systems. They could, for example, automate the steps involved in loan application processes. In fact, automation solutions not only benefit the customers and internal teams but also boost the overall company revenue.
Digital workers can help and collaborate with various teams by exchanging information and making requests that could make the overall processes simpler and more efficient. They may work at the front desk of banks, answering incoming inquiries, educating clients about products, or helping clients complete applications. They can also register in internal systems and handle papers like bank statements and identity documents in the back office.
So, in 2023, banks are surely looking out to invest in and implement a stronger digital workforce.
Trend 2: Open Banking
A system known as “open banking” entails banks opening up their application programming interfaces (APIs), giving third parties access to the financial data needed to create new applications and services and giving account holders more alternatives for financial transparency. And this system is positioned to positively disrupt the banking experiences of clients around the world.
While open banking encourages organizations to enhance their own products, it also gives third parties the opportunity to create better personal finance management (PFM) applications. By fostering competition in the banking sector, open banking services force them to either improve their financial services or collaborate with other fintech firms.
Around the world, open banking is advancing digital banking technologies and driving banks to alter their business models. It has the potential to change how established players communicate with customers as well as with fintech companies and one another.
Trend 3: Adapting A Low-Code Or No-Code Approach
The financial services sector should be on the lookout for a low-code or no-code approach to application development, which simplifies software development for nontech workers. All banks are focusing on empowering their business analysts with more advanced technologies that not only release the stress off the IT department’s shoulders but also make the processes smoother and faster.
Banks today truly struggle to find and retain enough technical talent, and smaller companies like community banks and credit unions have already turned to low-code and no-code development solutions to launch new digital products. These solutions enable financial institutions to meet client demand for digital services while remaining current with technical developments. The low-code and no-code tools enable financial organizations to repurpose previous work and reduce the workload placed on in-house software engineers. They are also helping businesses to move away from the traditional development routine and practices established for decades in software development to rely more on the reuse of developer modules and combining them to fit the demands of the business.
As financial institutions attempt to cut costs in 2023, low-code and no-code solutions may be an alternative for quick product development. This concept will enable banks to focus more resources on risks and strategic challenges like product security.
The Concluding Note
In the worldwide banking industry, automation is a topic of great interest. Several banks are hastily adopting the latest automation technology in an effort to usher in the next wave of productivity, cost savings, and customer experience improvements.
According to McKinsey, a second wave of automation and AI will occur in the next years, where machines will perform up to 10% to 25% of the labor across all bank operations, increasing capacity and freeing up staff to focus on higher-value tasks and projects. To take advantage of this potential, banks must adopt a strategic approach rather than a tactical one.
To automate and plug in a new method of working, it may occasionally be required to develop entirely new procedures that are better suited for automated/AI work than for human work, combining in-house capabilities with specialized domain expertise from suppliers.
Referring to the research by Bain & Company, embedded finance accounted for $2.6 trillion, or 5%, of all financial transactions in the United States in 2021; by 2026, that amount is predicted to reach $7 trillion. And, the similar trend for explosive automation adoption has been witnessed worldwide.
Although FinTechs have been the main force driving this expansion, traditional financial institutions still have time to join the fray. Tech-driven banks may create clever alliances that create new growth prospects and improve the banking customer experience by investing in the proper technical skills and carefully analyzing vertical segments. In fact, banks should evaluate the potential value of each organization and function, from capital markets and retail banking to finance, HR, and operations.
When they are large enough, these possibilities can quickly become the automation program’s guiding lights, persuading top management and other stakeholders of the significance of the issues at hand. These executives will no longer be observing the outcomes of numerous scattered experiments throughout the organization but rather plainly visible transformation prospects, and they will be eager to acquire the abilities, frameworks, and tactics necessary to achieve automation at scale. And this is exactly how they will step into the digital future of the banking industry!
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