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3 Processes Ripe for Automation in Banking

The banking sector is experiencing significant forces of change. FinTech is redefining the customer experience, and regulatory pressure has opened a $4billion RegTech Market.

The emergence of new FinTech players makes it possible for the new entrants to “act like a bank” without the end-to-end processing capability (or regulatory constraints) that incumbent players have.

Many incumbent banks are responding with automation and investing in technology to enable the customer experience, protect their banking services, and ultimately gain competitive advantage against new FinTech players.

Refining the customer experience will be the main catalyst for technology that drives core transformation and automation. But fraud prevention and adhering to regulatory frameworks will also be important accelerators in the digital transformation journey. Read on to find out how these three areas, in particular, can be transformed with the help of a low-code automation platform.

 

1 – Customer experience

Right from the beginning of a bank’s relationship with the customer, it’s important to define the relationship with exemplary customer service. So, the onboarding process is an important place to start. Yet only 55% of banks and credit unions have a “structured” onboarding process.

Digital capabilities for customers have moved from an advantageous convenience to a complete necessity for banks. However, most don’t permit customers to open a new account entirely online or on a mobile device. And branch-based ID verification and/or signatures or supporting documentation are required at the majority of organizations.

A poor onboarding experience can cut your relationship with a customer short. Conversely, when you get these moments right, you create the basis for long (and profitable) relationships. Keep in mind that your employees expect the same user-friendly experience, or you risk losing them too.

A low-code automation platform can connect the myriad of data stores and technology across your organization. With a single place to view real-time information, you can create a common starting point from which to develop new applications. Once you’re connected, you can be more agile. And that’s when you start engaging people inside and outside your business.

Citizens Bank used Bizagi to connect its disparate systems and orchestrate data to improve its commercial lending process and customer onboarding. Coordinated data and a 360-degree view of customer information has helped employees to pass responses to customers in real-time, and accelerated the customer onboarding time from 59 days to just 9 days.

 

Discover how Bizagi can modernize your banking operations.

2 – Fraud prevention

According to PwC’s Global Economic Crime and Fraud Survey, 49% of global organizations report having been a victim of fraud and financial crime. Over half of victims recover less than 25% of fraud losses, demonstrating that fraud prevention is key.

Banks particularly struggle with fraud due to the way that their infrastructure has built up over the years. The siloed storage of information has made it hard to (literally) connect the dots and detect fraudulent patterns of behavior.

The inability of controls to ‘talk to one another’ among different parts of the organization is a top barrier to improving fraud prevention, according to a survey by iSMG Information Security. Businesses need to develop an infrastructure that offers a secure, holistic view across all their information if they want to detect patterns that may indicate fraudulent behavior.

Suspicious Activity Reporting (SARS) is a great fraud prevention method and can be deployed using process automation to make it even more effective. If someone passes a check, they deem potentially fraudulent, by law they must fill out and file a report with local authorities i.e. a SARS report. An intelligent automation platform can speed up that process by auto-populating and submitting the form electronically and leave an audit trail to help report it to the authorities and process it across departments.

Intelligent automation can also help with banks’ case management and understanding the history of account claims to look for patterns that indicate fraud, such as false credit card fraud claims. Banks can then link analysis to find patterns in their claims data to help reduce fraud, avoid risks, and identify crime.

Only 11% of banking risk leaders felt highly confident in managing financial crime’s impact, according to Accenture. A low-code automation platform allows you to easily create processes to manage fraud from detection to resolution, while also allowing cross-department cooperation and information sharing that helps reduce fraud.

 

3 – Regulatory framework

Regulations impact essentially every part of banking operations. From marketing material and vendor relationships, to trading applications and customer contracts: all are subject to tough scrutiny by regulators. Every road leads back to compliance, yet two-thirds of banks do not have an overall data governance framework,according to PWC.

Banks tend to handle regulatory requirements in a siloed and disparate manner. Different documents that are required to achieve regulation of various items will often be located in different systems or locations. The process is not viewable end-to-end and is certainly not trackable.

It doesn’t have to be that hard. A low-code automation platform allows you to unite processes into a single workflow with automated features to save time and ensure compliance. For example, an easy win is to automate handoffs between teams into and out of the legal and compliance department. Orchestrating these processes through a platform that can act as a single source of information and connect all departments involved provides transparency, efficiency and leave an automated audit-trail, which all help to ensure compliance.

 

3 – Process Automation in action

For example, the loan origination process, which has multiple touchpoints and approvers, can be difficult to streamline. Loan authorization may be carried out on a different platform to other products, such as credit cards cards, mortgages, and savings – all of which could present data that affects the outcome of the loan. By introducing a Bizagi to the process, financial institutions can gain a more holistic view of their operations and processes and ensure compliance.

Old Mutual Bank had 11 disconnected systems with no single view of the customer. This created an unnecessarily long onboarding process as staff relied on individually coded variables to approve the customer data in a compliant manner. They used Bizagi’s low-code automation platform to establish a compliant way of approving loans and reduced their customer onboarding time ten-fold.

Having clear documentation of processes to identify all material aggregate risks, and how those risks are being managed while automating manual tasks within the processes is a great way to ensure that regulatory frameworks are properly laid out and executed.

 

Transform your operations with low-code automation

If would like to learn more about how automation can accelerate your bank’s transformation efforts, download our free ebook, The Essential Guide to Modernizing Banking Operations. 

In addition to insight on processes that a primed for automation, you will also learn how to:

- Create frictionless customer experiences
- Respond to regulatory pressures
- Bridge gaps in your system with automation
 

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