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Automation in the Truly Digital Bank

Posted by Venkatramana Gosavi (View Profile | View All Posts) at 9:28 AM

The banking back-end is no stranger to automation. However, in a digital banking model, automation will play a more prominent role both in terms of scale and sophistication.

There are three reasons why large-scale automation is absolutely essential to digital banking.

First, it will be critical in enabling banks to cope with the exponential increase in transaction volumes in the digital era without compromising cost, efficiency or accuracy. Without a centralized and automated solution, even something as fundamental as reconciliation will be prone to expensive delays or inadequacies in compliance reporting. Automation enables banks to centralize reconciliation across channels, reduce costs and enhance productivity, efficiency and accuracy.

Second, large-scale automation across all enterprise systems and processes will be required to deliver a differentiated no-break service experience to customers at various front-ends. For instance, as banking increasingly becomes mobile-only, banks will have to enhance the functionality of their mobile apps to go beyond merely enabling transactions. This means that even account origination, which currently requires a significant degree of manual intervention in most banks, will have to be completely digitized. So the level of automation across the enterprise ecosystem will have an impact on the banking experience at the customer interfaces.

And third, digital banking is shifting the focus away from the branch. This presents a huge opportunity for banks to release valuable human resources from mundane repetitive tasks and reassign them to more value generating activities. Large-scale automation, driven by business rules, algorithms and machine learning, can help banks standardize recurring tasks and enhance the overall productivity of the workforce.

Automated investment platforms or robo-advisors are already making a substantial impact on a specialized function such as wealth management. Even incumbent banks are experimenting with robots to cognitive computing to automate and streamline the digital banking experience. But without a concerted and comprehensive effort to automate banking, banks will find it challenging to achieve any tangible improvement in efficiency or experience. In a world where many consumer devices are becoming more autonomous and smart, a significant degree of automation will be required for banks to engage well with all these entities.

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