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How embracing Automation can be an Advantage to Banking and Finance Industry?

The finance industry is slowly moving towards digital disruption by automating itself. Not only there are evolving challenges in this sector, but there is also the need to meet the demands of its customers too. The primary goals are to bring the next wave of productivity, promote cost savings, and deliver improvement in customer experiences. The primary goals are to bring the next wave of productivity, improve cost savings, and provide improvement in customer experiences with increased transparency.

Besides, most of the banks and other financial institutes prefer to switch to automation as most of their operations are done manually. This ends up consuming much time, plus the employees spend their day doing routine monotonous tasks over and over again, every day. Thus leading to loss of productivity and failure to move up the value chain. However, automation minimizes the redundancies in their operations and frees up them to focus on activities that are more productive and require sophisticated skills.

As automation becomes a staple to the finance industry, especially banks, they further need to rejuvenate the ways they deliver value. McKinsey predicts there shall be a second wave of automation and AI emerging in the next few years, in which machines will do up to 10 to 25 percent of the work of these financial institutions. To move beyond the traditional setting, they need to have well-planned strategies at their disposal to make most of the automation opportunity. McKinsey states that such strategy should be based on the grounds of:

• Develop the end state vision and strategy; reimagining how they will be organized and how work will get done—both with the automation capabilities that exist today and those on the horizon.
• Set up a small central team by putting a well-run center of excellence (COE).
• Ensure that IT is a partner through a program of the steering committee and governance structures. IT can help in designing the overall systems lifecycle, manage the rollout against IT priorities, sustain development, and accomplish ongoing maintenance.
• Focus on human resources. This is important as HR has the ability to create new workforce-management practices, proactively manage changes, and use analytics to plan and coordinate the redeployment and reskilling of employees.
• Create detailed roadmaps and anoint change champions to avail the best of opportunities.
• Carefully choose the first pilot area. Initial areas of focus in finance would include accounts payable, reconciliations, template processes, and reporting. When selecting the first pilot area banks should consider the energy level and commitment of the business’s leader, the level of respect she commands in the organization, and other initiatives the firm has in progress that may help or hinder the work.

The most important applications of automation in banks are validating existing customer information, customer information gathering and compiling customer information with customer screening and servicing. Other than that the use cases also comprise regulatory and compliance monitoring, risk assessment, and account opening and account closure. Financial automation further helps in determining the non-payment risks, streamline the credit decisions and ensure data integrity.

We live in a digital age, where no industry is immune to automation. But for banks and other financial institutions, it is the dire need of the hour. The key is to start small and focus on high return on investment (ROI) areas. With simple strategies, banks can reap tremendous results in the long-term. Moreover, other than addressing our 24/7 needs, automation also facilitates scalability during those peak hours.