automation at scale to drive efficiency and experience

Automation is not an altogether new idea in the banking industry. There are three reasons why large-scale automation will be a critical feature in the truly digital banking model.

First, the advent of digital banking has already resulted in an exponential increase in transaction volumes. As the model evolves, the services portfolio will also expand in both volume and variety. Automation solutions will be critical to ensuring that banks are able to handle these volumes without compromising on cost, efficiency, or accuracy. Consider something as fundamental as reconciliation, which is also crucial for financial oversight. Without an extensively automated centralized solution, banks face the risk of expensive manual efforts and delay in account settlements. They are also under immense pressure from an increasingly demanding regulatory regime, to streamline reconciliation and reporting. In 2016, banks pursuing a truly digital strategy will explore the possibility of using emerging technologies such as Blockchain, to automate clearing, settlement, and reconciliation.

Second, automation will become a key driver of consumer experience at the front-end. Banks will be able to deliver a differentiated no-break service experience to their customers, by leveraging large-scale automation across all front-end and back-end systems and processes. For example, customers today expect full banking functionality from their mobile financial services apps. This means that banks must provide a digital experience not only for transactions, but also for account origination. An automated and streamlined account origination experience, with zero manual intervention, can help turbocharge customer acquisition processes. Going forward, a bank’s ability to achieve end-to-end automation across the enterprise ecosystem will be critical to ensuring a smooth, consistent, and rich banking experience.

And third, the shift from a branch-centric banking model to the digital paradigm represents a huge opportunity for banks to reduce transaction and service costs. In order to amplify that opportunity, banks will have to pursue large-scale automation to free up their valuable human resources and refocus them on value-generating activities. Automation, driven by business rules, algorithms, and machine learning, can help standardize recurring, repetitive tasks and enhance overall productivity.

But even as we speak, the banking industry is being challenged by a whole new world of autonomous businesses, smart connected devices, and the Internet of Everything. It is one thing to assess the impact that autonomous cars will have on a bank’s motor loans business. But it is another challenge altogether to imagine the implications of smart refrigerators and kitchen containers that do their own grocery shopping. The only certainty is that there will have to be a significant degree of automation if banking services are to engage efficiently and productively with these emerging smart entities.

Intelligent and automated investment platforms like Wealthfront are already displacing traditional wealth managers to take investment decisions on behalf of their clients. Many traditional banks are experimenting with everything, from robots to cognitive computing, to automate and streamline the digital banking experience.

Many progressive banks have begun exploring the experiential possibilities of virtual assistants and voice recognition services. As early as 2012, Spanish bank, BBVA, had created a virtual banking assistant called Lola. Earlier this year, Ally Bank launched its own Ally Assist – a virtual assistant capable of responding to basic questions about bill payments or recent transactions. Nina from USAA Bank is a voice recognition service that is capable of responding to a range of customer inquiries including requests to transfer funds or deliver spending updates.

Heading into 2016, there needs to be a more concerted effort to automate banking inside-out in order to achieve efficiencies at scale, and also to deliver a consistent and superior digital experience.