The benefits of hyper-automation for banking

We know, we know. How many words can technologists add hyper too? But don’t roll your eyes just yet.

Trust us, if you work in banking, hyper-automation will likely be the latest buzz word you hear in boardrooms (whether physical or remote) in 2021 and beyond.

Let’s find out more!

The changing face of banking

Deloitte suggests that the post-pandemic bank will emerge a lot different to the one that went in. They forecast that banks will need to continue to focus on improving the digitisation of their operations, remain flexible to new business models and (most importantly) put customers at the heart of their digital strategy.

Day-to-day, customers have become much more accustomed to instant action, engagement and information from their interactions with brands and as such, trends like banking as a service (BaaS), the rapid proliferation of fintech solutions and regtech innovations, suggests that the time is right to consider the potential for hyper-automation.

However, If we’ve learned anything over the last year, it’s that humans still want to be… well, human. As machines take over more roles in day-to-day operations, it’s critical banks keep people at the heart of their approach.

What is hyper-automation?

Coined by Gartner in 2019, hyper-automation is the full automation of the business processes and customer processes. It achieves this through an advanced ecosystem of operational and customer facing digital solutions that look to leverage the flexibility and scalability of modern IT infrastructure, which ultimately frees up staff to inject their creativity into delighting customers outside of said processes.

The automated business, combined with agile frameworks, provides opportunities for better-informed decision making, generated through a more holistic data picture throughout the organisation. Without getting too techy, Robotic Process Automation (RPA) is being enhanced and refined by technologies like artificial intelligence (AI), natural language processing (NLP), process mining, advanced analytics and more, to reduce costs, maintain accuracy and speed up processes.

Why it’s a fit for Banking

Banks who haven’t had the chance to start as a digitally native organisation have built up complex systems of legacy tools, which have been bolted onto an operational structure defined when they were a telephony or branch network bank. With new challengers flooding the market with cloud infrastructure and a mobile-first, digital proposition, the fight for market share has intensified. This is what makes automation such a compelling proposition, as any opportunity to slim down the operational costs will be welcomed to drive increased profitability.

From automating onboarding processes in lending to improving data quality and utility for better decision making, hyper-automation has the potential to augment workers ability, whilst reducing operational costs and human error.

The Benefits of hyper-automationIntegration

• In firms with complex ecosystems of processes and legacy systems, hyper-automation can easily make sense of the overall picture. Thus, staff are empowered to make more informed decisions. With increasing regulation, tools can maintain 24/7 monitoring, support risk evaluation and ensure compliance.

Productivity

• Hyper automation can take care of laborious, repetitive processes. This is a win-win, it improves productivity with fewer resources, as well as engaging employees in different and more stimulating work.

Flexibility

• Hyper automation leverages a host of automation tools that allow businesses to move beyond the limitations imposed by any single approach. This means solutions can scale and improve overall operational flexibility.

Demonstrable ROI

• Not least, hyper-automation is responsible for improving revenue whilst reducing costs. With powerful analytical capabilities, a firm can achieve optimisations of resources and benchmark KPIs. Similarly, costly errors can be reduced with less human and manual interaction.

What Makes It Hyper?

With your brain whizzing on the potential for these benefits in your business, you might now raise a valid question. We already have some automation in our business, what’s the difference with hyper?

Tools working together

• Simple automation capabilities are constrained due to their standalone technology. Hyper-automation packages together many areas of ML, software and automation tools to tackle more complex problems.

AdHoc vs Integrated

• Hyper automation works as a glue gelling together multiple platforms, systems and technologies. Simple automation is usually constrained to one platform or process, which if it’s legacy, is most likely just plaster over an already leaky machine.

AI & ML

• Simple automation processes, like RPA, do not also utilise more sophisticated and emergent technologies like AI to enhance the data modelling and decisioning capabilities.

Narrow vs Large

• Both approaches share the same goal, to support a more fluid business processes and customer experience. However, in hyper-automation, there is a larger concept at work which is the movement towards more scalable, fluid and agile businesses.

Automation Use Cases for Banking

Let’s look at a few ways automation can improve banking experiences:

Regulatory Reporting

Accenture’s 2016 compliance risk study found 73% of respondents thought RPA would be a key enabler for compliance in the next three years. Since then, automation has been deployed sporadically. However, the regulatory environment becomes more complex year-on-year, meaning standalone RPA’s may become less useful. Complete automation, as advertised by hyper-automation, will require complex, multi-year implementation as well as culture phase shifts, but will be key to better risk and compliance.

Lending

Lending processes can still be slow and manual, even in 2021. There are a multitude of blockers from credit checks to employment verification that impacts turnaround times. Automation technologies can, with ease, extract or approve all the relevant loan data in seconds, validating customers from multiple sources. 

For instance, mortgage processes sometimes take up to 50 days to approve. Automation, paired with emerging technology like blockchain, could combine to validate customer data from multiple sources automatically or reduce attrition from customers pulling applications due to minor errors on forms that caused delays.

Back-Office

As is usually the case, new technology is often deployed to customer-facing processes first to impress the market. However, back-end processes are ripe for automation possibilities. This is driven by the sheer volume of records and documents many banks continue to add to, even in the digital age. 

On average retail banks have between 300-800 processes, all of which can be improved with business process management (BPM) platforms which can reduce human error or inefficiencies negatively impacting the customer experience. However, the key here is not to place a bandaid over something that is no longer fit for purpose.

Sales & Distribution

Retail branches of the future are due a makeover. It’s reasoned a shift from contact centres to customer care platforms enhanced by intelligent routing provided by automation will occur. Similarly, embedding distribution on partner platforms through API and banking as a service (BaaS). All empowering frontline staff to harness their creativity and passion for serving customer needs.