Automation in banking enables banks to respond quickly to changes in the market such as new regulations and new competition. Are they ready?
At a time when neobanks and fintechs are capable of providing fast, efficient and 100% digital responses to their customers, banks are facing the challenge of modernizing their infrastructures and processes.
It has been no secret that 2020 was a challenging year for financial companies, especially in the area of technology, in which it was necessary to generate major changes to meet the needs not only of customers but also of the institution. Great challenges were generated, among which we have: process optimization, service through digital channels and data security.
The need to adopt new digital processes in unique times of pandemic, led to analyze different actions and at the same time to focus attention on the value of infrastructure and digital technology, in order to achieve a better reception.
According to research conducted by International Data Corporation (IDC), investments in Digital Transformation will reach 6.8 trillion dollars between 2020 and 2023; and with a revenue of 5 trillion in the IT sector worldwide.
Digital transformation investment projection
We are in a time where the world has changed and companies need to restructure in order to meet the demands of the market and their consumers.
The main challenge is to move from face-to-face to digital, and to achieve this goal they must resort to platform-driven technology architectures that include: data, intelligence and security. Three fundamental pillars to achieve success and receive a return on the effort made.
The financial sector is the most suitable to take advantage of the opportunities, advantages and benefits offered by automation. The consulting firm McKinsey estimates that between 10% and 25% of banking tasks will be performed by automation and, according to the consulting firm KPMG, it will reduce costs for firms by up to 75%.
Technology evolves and with it, the technological infrastructure adapts to new requirements, where processes are simplified and the margin of human error is reduced, which means that the infrastructure is relieved of the burden and its life time is extended.
During the confinement, the banks needed to remain operational, regardless of the limit of personnel and to cope with the load they resorted to the immediate automation of certain repetitive tasks, promoting the use of RPA Robotic Process Automation or Robotic Automation of Processes.
Automation in banking: 3 key characteristics
Scalability of operations: financial institutions can continue to gain clients, without the need to hire new collaborators, allowing them to have a higher percentage of profits.
Minimize errors: automations reduce human errors, such as entering the wrong data when typing, a very common problem.
Integrations: by optimizing processes through ARP, banks can invest in an integrated platform for better control of all financial operations and avoid having information scattered with applications that do not integrate with each other.
According to Cliff Justice, “In the next 15 years it is possible that 45% and maybe even 75% of current offshore jobs in the financial sector will be performed by robots, to be more precise ARP”.
Any financial institution can automate its processes. By designing an adequate automation strategy and having the know-how for a correct implementation, as well as the necessary technology.
Technology is fundamental, since it is the one that carries out the automation process, but there is more. Experts consider that the strategy is the most important thing. As well as a technological partner with the capacity, knowledge and experience to automate business processes. And even better if it works first hand in the financial sector.
It is important to emphasize that process automation is a highly technological solution. With the ability to bring countless benefits to organizations. However, to achieve success, it is essential to understand that it is not just an IT tool that will mysteriously solve everything. But it is a management and business improvement solution.
Examples of automation in banking:
- Track customer transactions and identify suspicious activity to uncover potential fraudulent activity
- Bots can confirm the consistency of data in bank account records. To detect duplicate entries and adjust accounts more accurately, in a fraction of the time it would take a person
- Banks perform constant audits to ensure the level of service. These reports can be automated to be generated periodically according to the requirements of each institution
- With the transactional information that the bank maintains on its clients, it can cross-reference the information with their income. And project the risk involved if the person obtains a loan
It is crucial to highlight that the traditional infrastructure is becoming too small to meet the current digital demands. Therefore, it is necessary to accompany automation with new cloud technologies and micro-services. To achieve an immutable infrastructure; which leads us to be able to provide self-sufficient capabilities and automatic recovery through software.
Global IT industry predictions for 2021 highlighted that, by the end of 2021, 80% of enterprises will implement a method to migrate to a cloud-based infrastructure. These predictions set the standard for institutions to take into account the importance of IT infrastructure. And to adopt container-based architectures, artificial intelligence and cloud banking.
To conclude
Cloud Banking is the trend that allows to secure the banking system. So that the data used by the institutions are stored in the cloud, helping to enhance and streamline activities.
The previously mentioned processes will prevent failures in the technological infrastructure of banks. And reduce losses due to any error. Likewise, with the new technologies, flexibility and proactivity are sought, simplifying processes, providing value and customer loyalty.
To take advantage of this opportunity, banks can rely on technological experts such as Interfaz. Who have the experience in the sector and the necessary technology to automate processes. And transform, from within, the total way in which they operate, always seeking greater efficiency and agility.
Discover more about Interfaz and our full-stack of technological services.
Source: DevOps LATAM | GratatuCloud | Equinx | Technological Trends
