A Practical Guide to Automation in Banking Sector

Automation in Banking Industry Challenges in Banking Sector by Credgenics

automation in banking sector

The banking industry is one of the most dynamic industries in the world, with constantly evolving technologies and changing consumer demands. Automation has become an essential part of banking processes, allowing financial institutions to improve efficiency and accuracy while reducing costs and improving customer experience. We will discuss the benefits of automation in each of these areas and provide examples of automated banking processes in practice.

But leveraging the AutomationEdge RPA solution made the process a lot simple and helped the banking staff t bring down the time spent on a loan application from 40 minutes to 20 minutes. Intelligent automation combines the strengths of humans and machines to perform repetitive, manual, and rule-based tasks while also providing insights and decision-making capabilities. They employ automated systems to streamline their day-to-day operations, from processing transactions to managing customer accounts. This automation enhances efficiency, reduces human error, and ultimately improves customer service. As the banking landscape evolves, scalability and flexibility are crucial attributes for success.

What are the challenges for banks today?

It can include everything from software that handles routine tasks like data entry and account management to robots that perform physical tasks like sorting and counting money. It takes about 35 to 40 days for a bank or finance institution to close a loan with traditional methods. Carrying out collecting, formatting, and verifying the documents, background verification, and manually performing KYC checks require significant time. This article will explore the importance of intelligent automation in banking, its applications, benefits, challenges, and future trends. According to a report by Accenture, the adoption of intelligent automation technologies in the banking industry could result in annual cost savings of up to $70 billion by 2025.

Banks are speeding up the adoption of automation technologies to ride the wave of cost-effectiveness, productivity, and improved customer experience. Automation in banking sector in India gives banks a unique opportunity to maintain a competitive edge by transforming a core part of their strategy and delivering a comprehensive banking experience. The goal of business process automation is to increase the productivity of business processes with the help of software.

automation in banking sector

Chatbots and virtual assistants provide round-the-clock support, swiftly addressing customer queries and concerns. Automated processes enable quicker loan approvals, account openings, and fund transfers, reducing customer wait times. Furthermore, data analytics powered by automation empowers banks to gain profound insights into customer behavior and preferences. This knowledge can be leveraged to offer personalized financial solutions and recommendations, ultimately fostering stronger customer relationships. Today, the competition for banks is not just players in the banking sector but large and small tech companies who are disrupting consumer financial services through technology. Lovingly called “Fintech” companies by the business world, these organizations are focusing on the digitally savvy end consumer to perform financial transactions from their fingertips.

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The elimination of routine, time-consuming chores that slow down processes and results are a significant benefit of automating operations. Tasks like examining loan applications manually are an example of such activities. The paperwork is submitted to the bank, where a loan officer then reviews the information before making a final decision regarding the grant of the loan.

Banks need to digitise and store the documents filled up by the customers in bank servers. Once an application is approved or denied, use data routing to send a custom message based on the application status. Any files uploaded through the application can be safely stored in your storage provider of choice. For those accepted, create personalized terms documentation featuring their credit limit, card choice, and APR.

automation in banking sector

In addition to the knowledge of bank services, we need to understand the typical activities that happen in a bank. Once we know the operational activities in a bank, identifying the ones that require and benefit from workflow automation will be easier and more effective. ● Putting financial dealings into an automated format that streamlines processing times. Income is managed, goals are created, and assets are invested while taking into account the individual’s needs and constraints through financial planning.

Reasons why you need to add automation to your bank

This program involves the use of digital workers for automating administrative tasks. COIN exploits machine learning to interpret, analyze, and derive information from commercial loan agreements. As a result of its implementation, an operation that formerly took loan officers and lawyers 360,000 hours per year is currently performed in seconds. RPA downplays the curse by entirely excluding manual processing by humans and thereby avoiding previously error-prone work — or even exploring sensitive data on payments and customers. Hexanika is a FinTech Big Data software company, which has developed an end to end solution for financial institutions to address data sourcing and reporting challenges for regulatory compliance. This level of user engagement is not possible at scale without automated systems.

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Increasingly, teams are coming up with revenue generating ideas that tap into this treasure trove of insights. Here’s a specific case study on how HSBC made its query resolution process faster and more efficient. At first, it implemented an RPA software to track queries – from the originating point to various departments of the bank until it reaches the one that resolves it. Over time, the RPA software was able to find a pattern in how queries were resolved. This enabled the software to route specific queries to specific departments directly – the queries stopped bumping from one irrelevant department to another. Since bank documents are usually in a structured form, an RPA bot can read the data off it and store the data in the desired digital format – without manual intervention.

Here are the primary benefits organizations have seen from implementing business process automation. In 2019, anti-money laundering compliance costs totaled $31.5 billion for financial institutions in both the US and Canada. According to studies, highly skilled analysts who are supposed to uncover such crimes are wasting around 75% of their time collecting data and another 15% entering it into the system. Both tasks can be automated allowing anti-fraud professionals to focus on their main job. In addition to helping employees generate reports, RPA in banking can also assist compliance officers in processing suspicious activity reports (SAR).


Companies in the banking and financial industries often create a team of experienced individuals familiar with the entire organization to manage digital acceleration. This team, sometimes referred to as a Center of Excellence (COE), looks for intelligent automation opportunities and new ways to transform business processes. They manage vendors involved in the process, oversee infrastructure investments, and liaison between employees, departments, and management. Today, many of these same organizations have leveraged their newfound abilities to offer financial literacy, economic education, and fiscal well-being.

Instead, it approaches the organization on a holistic level to check which processes could be improved through automation. That’s why it requires an in-depth analysis of business inefficiencies and areas for improvement. Most of the time, it involves building a solution from the ground up instead of adjusting and optimizing existing processes.

Banks must address challenges and considerations when implementing intelligent automation solutions. Intelligent automation can significantly enhance banking platforms by improving agent performance. To do this, organizations can define key performance indicators such as the number and value of loans, and IA can model the behavior of top-performing agents.

Customer Support and Query Resolution

The central team, on the other hand, is having trouble reconciling the accounts of all the departments and sub-companies. [Exclusive Free Webinar] Automate banking processes with automated workflows. One banking organization has used automation to apply a rule in the loan origination process that automatically rejects loans that fail to meet minimum requirements. This reduces employee workload and enables them to focus on the customers that will generate profit. Banks can leverage the massive quantities of data at their disposal by combining data science, banking automation, and marketing to bring an algorithmic approach to marketing analysis.

The result is a significantly more efficient, dependable, and secure banking service. Automating compliance procedures allows banks to ensure that specified requirements are being met every time and share and analyze data easily. This frees compliance departments to focus on creating a culture of compliance across the organization. In addition, automated systems can identify and flag suspicious activity that poses a threat to the bank and its customers. As RPA and other automation software improve business processes, job roles will change. As a result, companies must monitor and adjust workflows and job descriptions.

automation in banking sector

OCR can extract invoice information and pass it to robots for validation and payment processing. To comply with regulations, laws, and guidelines, financial institutions must compile reports on their performance to inform the board of directors. Such reports often contain human-introduced errors and are time-consuming to create, as they are based on enormous volumes of data. ICICI Bank adopted RPA for 10 operations, which increased to 200 operations during the first year to support numerous businesses such as those in the retail, corporate, treasury, agribusiness, trade, and forex spheres. To date, ICICI Bank has automated 1,350 processes with 750 bots performing over two million transactions a day.

  • They are now seeing annual cost savings of over 30 percent in certain functions.
  • Automated systems can easily send out surveys to collect as much data as possible about customers’ satisfaction with their banking experience.
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Various divisions within banks, from operation and marketing to finance and HR, are implementing RPA. RPA addresses the key challenge of attaining efficiency but keeping costs as low as possible. But within the banking sector, this goal comes with an additional complexity of maintaining optimum security levels.

automation in banking sector

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