Four Processes That Financial Services Firms Can Automate Now

It is clear to see why automation is an attractive option for financial services institutions. The never-ending pressures of budget and staff reductions, increased offshoring of certain internal functions, the continued growth in fintech providers delivering niche offerings, and the pandemic ensuring that remote working is here to stay —all these challenges can be offset to certain degrees with automation.

To remain competitive, banks and credit unions need to evolve past the manual, paper-based processes that bottlenecked many of their operations. With Gartner suggesting that 66% of CFOs spent more on automation technology in 2021, it is clear that finance institutions are serious when it comes to streamlining internal workflows — but which processes make the most sense for automation?

Below we explore four common processes that are ripe for automation within banks and credit unions today.

1.   Account Opening

Opening a new account is the classic document-intensive process for many financial services providers. Application documents are completed, scans of relevant forms of identification are shared, and the overall process moves forward only once each step has been completed and approved.

Automation can help massively in the streamlining of this activity.

Artificial intelligence (AI)-powered document classification and data extraction enable higher volumes of paper files to be digitally processed than ever before. Robotic process automation (RPA) tools intelligently (and near-instantaneously) perform the mundane, expensive, and error-prone human tasks of data entry. Workflow automation routes scanned documents and extracted information to the relevant people with full auditability. By intelligently automating the reviews and approvals of all but the most complex applications, the account opening procedure may be the “low-hanging fruit” because of the significant speed and accuracy improvements that can be realized quickly.

2.   Risk Management

While the management of financial risk within banks and credit unions is a long-established discipline, operational risk management (the governance of compliance, financial crime, cyber-risk, and IT risk) is growing in importance. With every recent privacy breach and the associated industry or government regulation comes additional complexity and potential risk.

Anti-money laundering (AML) compliance alone costs US financial firms an estimated $25.3 billion per year — and the costs of governing newer privacy-related concerns such as the California Consumer Privacy Act (CCPA) are yet to be fully felt.

Banks and credit unions can reduce their risk exposure by automating aspects of their operations that are most vulnerable to non-compliance, security breaches, etc. A core risk management and mitigation challenge is the ability (or inability) to process the vast volumes of documents and data that contain sensitive or confidential information. Automation solutions provide a range of services such as AI-enabled content classification, personally identifiable information (PII) detection, and intelligent integration with external credit and risk systems to collate the most comprehensive view of risk factors available to the bank or credit union.

Armed with this data, financial services institutions are better equipped to identify fraudulent activity, spot potential bad debts, lockdown PII and other sensitive data, and take a more pro-active approach to risk management.

3.   Subject Access Requests

Privacy regulations such as CCPA and the General Data Protection Regulation (GDPR) enhance the data access and visibility rights of financial services clients. These mandates also add another layer of compliance that banks and credit unions must contend with.

The subject access request (SAR) within the GDPR directive, for example, requires providers to deliver a report containing all data relating to a client (the “subject”) within one month of the request, or face potential fines. For banks and credit unions that still use multiple disconnected legacy systems to manage different account types, pulling this level of information together for clients is a daunting and time-consuming task.

However, many automation solutions have federation capabilities that provide access to multiple information and data sources. With a centralized approach to searching for and accessing data across business systems and repositories, performing comprehensive subject access requests becomes much easier.

4.   Client Engagement

Let’s be clear — you should NEVER automate client management. Bank and credit union customers want (and deserve) a human touch for many interactions – but automation still plays an important role in improving the client experience.

In many cases, the communication between a financial services institution and its client is driven by the client (i.e., to inquire about a new service, to make a complaint, to ask a question, etc.) – and this customer service function is another area of “low-hanging fruit” of intelligent automation.

Robotic desktop automation (RDA) tools provide a customer service representative with a context-based search utility for that specific client’s content as they’re on the phone, as they enter a question using a chatbot, as they submit a form on the website, etc. All of this greatly enhances the customer experience.

Automation can also enable an increased level of interaction, accuracy, and engagement —reminding and alerting staff of the best times to be in touch with clients. Advanced solutions can even suggest topics of conversation such as birthdays, upcoming anniversaries, educational events, and new offerings that the client might be interested in.

The Time to Act is Now

Automation may seem like a topic that has been around for a long time and one that never truly comes to fruition. However, automation technology has come a long way in recent years. Advances in areas such as AI and RPA provide the intelligence to perform advanced document classification and data extraction, the cloud offers the power to process vast quantities of data at low cost, and we now have a workforce that requires digital information to function.

Automation is no longer a dream of the future. The technology, the best practices, and experienced vendors are ready today without heavy licensing, risk, or big project costs. The only question that remains is whether banks and credit unions can afford to ignore automation any longer.

Ron Cameron
Ron Cameron, KnowledgeLake
President and Co-Founder at KnowledgeLake

Since KnowledgeLake's inception in 1999, Ron Cameron, president and co-founder, has taken great pride in creating a positive company culture where employee and customer satisfaction are the highest priority. KnowledgeLake is a cloud-native solution for document processing that enables organizations to capture, process and manage their content in a single platform. The company combines intelligent document capture and robotic process automation (RPA) to increase productivity. Two million users worldwide employ KnowledgeLake to work faster and more efficiently.