How HyperAutomation is Transforming Banking and Finance

Blog: ProcessMaker Blog

While banks were already moving towards hyperautomation, COVID-19 has accelerated their efforts. According to a recent Deloitte report, the pandemic has been “reshaping the global banking industry on a number of dimensions, ushering in a new competitive landscape…prompting a new wave of innovation, recasting the role of branches, and of course, accelerating digitization in almost every sphere of banking and capital markets.”

In this article we will briefly look at what hyperautomation is and the role that it is playing in transforming several core banking processes.

Hyperautomation, explained

Hyperautomation is a term that was coined by Gartner in 2019. Hyperautomation refers to the use of advanced technologies like machine learning, and robotics process automation (RPA) to automate manual tasks. It is important to note that hyperautomation is not meant to replace human workers but loop them into the process. According to Deloitte, “using collaborative intelligence, technology and humans work together. Employees can begin to train automation tools and other software. Through ML, they can get to a state of AI-enabled decision-making. With hyperautomation, companies can begin to reimagine work…”

Regulatory Reporting within Banks

In another recent report by Deloitte, the entire regulatory reporting process will likely be automated from end-to-end in the near future. Many banks are already using robotic process automation (RPA) and cognitive intelligence (CI) technologies. Some benefits of these banking automation technologies in regulatory reporting include:

Automating manual tasks on a 24/7 schedule with limited human supervision
Improvements in data quality and documentation
Redeployment of human workers to higher value tasks

Yet as the report notes, technologies like RPA are not a “one-size fits all panacea for the end-to-end regulatory reporting landscape. Complete automation would require a complex, multi-year implementation and transformation in the mind-set and culture of the organization.”

The key for banks is to focus on activities that can be automated in the short-term while continuing to adapt to increasingly complex regulatory reporting requirements and implementing innovative new technologies.

Marketing

Manual marketing tasks like sending email responses and posting content are repetitive and time-consuming. With marketing automation employees can focus on performing higher-value tasks.

For example, a prospective customer may signup to receive a newsletter or express interest in a banking product. This could trigger a series of emails that move the customer further along the customer journey. It could also trigger a workflow that directs sales to follow up, as well as increase collaboration between marketing and sales teams.

More and more banks are turning to marketing automation to reach customers on a greater number of channels. And research suggests that it works. 80% of marketers report that automation platforms produce some 451% more qualified leads.

Sales & Distribution

The banking industry is searching for distribution models that align with cross-channel consumer preferences and behaviors. A recent study by Boston Consulting Group explored future retail banking distribution models. According to the study, branch-centered distribution models will evolve by 2025 in nearly every country.

Reformed “branches that conduct in-person and remote relationships – along with customer contact centers and specialist sales teams – will play second fiddle to a digitally dominated proposition.” The authors conclude that banks can use five levers to increase profitability by as much as 25%:

Shifting from contact centers to customer care platforms
Implementing the intelligent routing of customer requests between digital and assisted channels
Embedding “distribution” on partner platform services through APIs – banking as a service (BaaS)
Reducing branch networks while optimizing the remaining branches
Harnessing the creativity and passion of frontline workers to satisfy customer needs

Lending Operations

Two factors that have contributed to the move towards automation in lending operations are cost reduction initiatives and improving customer experiences. Both the consumer and commercial loan processes have traditionally relied heavily on inefficient paper-based processes.

Technologies like RPA can automatically extract relevant loan data from voluminous records, doing in seconds what may take a human worker most of his or her week. JPMorgan Chase’s contract intelligence platform, COIN, is a great example of this. Using AI-powered bots that can analyze complex commercial loan agreements, the bank has cut out some 360,000 hours of labor each year.

There is strong customer demand for more self-service options. For example, one study found that 44% of retail banking customers are using their primary bank’s mobile app more frequently. As banking customers increasingly steer-clear of local branches, banks must expand their digital offerings to improve the lending experience.

Back-Office Operations

Much of the hyperautomation movement in banking has involved customer-facing processes. Yet back-office operations are full of inefficiencies and human error, which negatively impact the customer experience.

One reason that banks have shied away from automating back-office operations is that the sheer number of processes and level of complexity can be overwhelming. Consider that the average retail bank has between 300 and 800 back-office processes.

Yet with the emergence of intuitive and comprehensive solutions like low-code business process management (BPM) platforms, it is easier than ever for banks to automate their back-office operations.

Financial institutions located all over the world rely on ProcessMaker’s industry leading BPM software to transform their banking processes. Learn how your organization can embrace hyperautomation in banking with ProcessMaker.

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