Automation in banking: a journey worth taking

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A big part of my work at IBM involves advising clients on automating their business processes.  In that work I have to admit I find inspiration in a quote from inventor and entrepreneur Tom Preston-Werner.  “You’re either the one that creates the automation or you’re getting automated.”

For decades, companies in every industry have focused on developing business processes that can be executed repeatedly with predictable outcomes.  So it should be no surprise that banks and other financial institutions are researching and applying automation to their business processes.

While significant advancements in process automation has been achieved, many banks are saddled with enormous legacy assets that resist such modernization.  In addition, much of the automation has focused more on specific products and offerings and less on end-to-end client experiences. This prevents banks from fully exploiting some of today’s marketplace opportunities.

The time is ripe for financial institutions to embrace process automation and robotics around both their front and back office operations, creating sustainable differentiation in the marketplace.

One such application would be automating all experiences that financial institutions deliver to their customers, making the journey as frictionless and convenient as possible.  Automated customer journeys can be targeted to enhance the brand, focus on profits, cut down operational costs and, above all, help modernize legacy assets for next-generation business capabilities.

As a first step, financial institutions can identify all the customer journeys they would like to automate and deliver consistently across multiple channels. While doing so, they can focus on journeys that deliver superior customer experiences, enhance efficiency and productivity, and allow them to go after new revenue opportunities.

Then, they can begin the critical (and sometimes painstaking) work to identify and define the underlying processes that require automation.  Total automation of journeys is possible only if all process nodes have the right data at the right time to make decisions, compute outcomes and follow defined workflows.

The payoff can be huge.  Gaining deeper insight into customer journeys, their underlying processes, and the identification of key data sets that allow automation can be of great value to financial institutions.

The next step is examining legacy assets to extract the data required to automate those processes and help link them to the customer journeys.

This automated linkage from customer journeys to underlying processes and data to legacy systems is a powerful construct.  It allows financial institutions to deliver digital customer journeys quickly and reliably.  Moreover, the value of assets, applications or systems not improving customer experiences becomes a potential area for cost-cutting.

By focusing on customer journeys and business-led conversations, financial institutions position themselves to focus resources where they matter most. They can enhance existing journeys that improve operational efficiency and productivity, or create new journeys that help generate unique revenue streams.

It seems that new examples of customer journey automation are being introduced almost daily.

  • banorte-mobile-bankApplying automation to intercept real-time purchases of luxury items and extending financing offers to customers in real-time at the point of sale.
  • Allowing the delivery of high-end banking and non-banking products and services to their small and medium-sized business customers. The non-banking set of products and services will be sourced via APIs from 3rd party providers and brokered by banks on behalf of their customers.
  • Integrating customers’ buying and paying needs in an easy-to-use interface by launching a fully contained mobile bank.
  • Deploying robotics in conjunction with customer journey automation to deliver easy-to-consume frictionless financial services.
  • Using voice commands that drive devices to do tasks customers want to do such as pay bills, transfer money, etc.

These diverse, automated journeys have several things in common. They:

  • Help create a seamless brand experience
  • Allow financial institutions to pursue additional sources of revenue.
  • Link to only those legacy assets that provide the data sets to drive required automation of underlying processes.

By following a focused approach to operational process automation and robotics, financial institutions can quickly become more customer centric, improve their brand and create multiple streams of new opportunities.

Vice President - Banking & Financial Markets at IBM. Member IBM Industry Academy

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