Hyperautomation in Banking: Going Beyond Robotic Process Automation

One word that the banking and financial services industry takes very seriously is – AUTOMATION. And why they shouldn’t, after all, there are more than 800 procedures on average within a bank. Performing all of them without any errors or missing a compliant requirement is not an easy job but automation makes them happen in the blink of an eye. RPA- robotic process automation- has been the main driver so far but hyper-automation in banking is taking the main seat as the technologies mature. Some of the biggest banks like HDFC, ICICI, JP Morgan Chase, Bank of America, CitiBank, are the early adopters in this new era of intelligent automation. 

Hyperautomation vs RPA

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RPA, or Robotic Process Automation, has become very common in banks to automate those mundane, repetitive tasks that can bog down their workdays. But RPA has its limits. It's fantastic for those straightforward, rule-based tasks, but when it comes to automating more complex processes, it often falls short. Therefore, banks and financial institutions need to go beyond RPA and shift to hyperautomation that includes technologies like ML, NLP, OCR, chatbots, advanced analytics, intelligent BPM suites, and process mining.  

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Besides automating everything, hyperautomation brings in the capacity to integrate human expertise into the automation process. Through collaborative intelligence, technology, and human workers collaborate hand in hand. They get the opportunity to train automation tools and other software, progressively transitioning towards AI-driven decision-making.

Why should banks adopt hyperautomation?

Today, banks and financial institutions are dealing with the challenges that challenge their very existence. Two of them are: 

Hyper personalization

Customers are increasingly using digital channels for all their needs including banking. However, their expectations are not only limited to merely receiving quick banking services on the web and mobile apps. They expect personalization at every step. AI, an important part of hyperautomation, is best at helping banks deliver personalization at almost every channel.

Competition from tech giants

Amazon, Google, and other tech giants to non-bank lenders and startups are giving tough competition to the core banks and financial institutions. They have vast resources and can rapidly expand their financial services. Whether it's in payments, lending, or wealth management, their deep pockets and reach can challenge banks on multiple fronts.

Hyperautomation in banking will not only help them in overcoming these challenges but also make them future-ready. 

Here are a few benefits of hyperautomation for this industry:

Enhanced Operational Efficiency

Hyperautomation significantly enhances operational efficiency within banks. It automates routine tasks, such as data entry, document processing, and transaction reconciliations, reducing the need for manual intervention. This not only accelerates processes but also minimizes errors, resulting in a more reliable and cost-effective operation.

Improved Customer Experience

Banks can leverage hyperautomation to provide personalized, 24/7 services to their customers. Chatbots and virtual assistants powered by AI can respond to inquiries and perform transactions around the clock. Faster response times and the ability to tailor services to individual customer needs lead to improved customer satisfaction and loyalty.

Regulatory Compliance and Risk Management

Staying compliant with ever-changing regulations is a significant challenge in the banking industry. Hyperautomation helps banks adapt quickly by automating compliance checks and monitoring for fraudulent activities. This reduces the risk of penalties and reputational damage while maintaining trust with regulators and customers.

Cost Savings and Scalability

Hyperautomation also results in cost savings. By automating labour-intensive tasks and reducing errors, banks can lower operational costs by up to 30%. Additionally, the scalability of hyperautomation allows banks to handle increased workloads without the need for a proportional increase in human resources.

Areas where Hyperautomation is gaining traction  

01 Customer Onboarding and KYC Processes

Irrespective of the industry, customer onboarding is a lengthy process but it's risky as well for the banking industry. Proper customer screening and evaluating their credit history save a bank from non-compliance and money laundering. Hyperautomation solves both the challenges of time-consuming and the risks involved.

With banking mobile applications, customers can now embark on a self-onboarding journey saving the time of both customers and banking agents. AI systems further make the process safer by doing real-time KYC checks and assessments of applicants’ creditworthiness.

02 Loan Origination and Credit Appraisal 

One of the most time-consuming tasks in the banking sector is loan processing which takes around 30-45 days even with loan origination systems in place. Intelligent automation solutions not only speed up the process but also bring transparency and accuracy with real-time insights into the customer data. It can save up to 70% of loan processing time. 

Read More: 70% Faster Vehicle Financing with Loan Origination Solution

03 Fraud Detection and Prevention

Payment fraud is one of the biggest challenges banks and financial companies face. Last year alone, fraud worth 1.59 billion U.S dollars happened in the United States as per Statista. Preventing these fraud and losses is however time and resource-intensive.

Hyperautomation enables banks to set up automated systems to identify abnormalities in transactions, and timely notify the compliance team in case of fraudulent activities. Not just present but future frauds can also be predicted by leveraging AI and ML in these solutions.

04 Compliance Reporting

The BFSI sector faces a multitude of challenges while preparing compliance reports. From collecting and sorting vast amounts of data from scattered resources and systems to creating and maintaining audit trails. Even traditional automation methods cannot handle the complexity and need for real-time insights into the process.  

In contrast, modern technologies, such as hyperautomation (combining robotic process automation, AI, and machine learning), offer advanced capabilities for compliance reporting. They can handle large volumes of data, adapt to changing regulations, ensure data accuracy, provide real-time reporting, and offer intelligent data validation and transformation. This makes compliance reporting more efficient, accurate, and adaptable to the evolving regulatory landscape.

A Delivery approach to adopt Hyperautomation in Banking

• Find the best opportunities for automation.
• Revamp processes to get the most out of automation.
• Conduct a thorough assessment to confirm the automation plan.
• Create an automation solution and put it into action in the real production environment.
• Assess the advantages outlined for that particular use case and plan further accordingly.

Conclusion

Hyperautomation is empowering the BFSI industry to rethink and reinvent work processes. Moreover, it is paving the way for solutions that could solve not only yesterday’s problems but also future challenges. As technology advances, automation will get advanced too where multiple technologies will complement each other to deliver true automation.

Softude specializes in Artificial Intelligence, Machine Learning, NLP, OCR, RPA, Low-Code, Computer vision, and everything that is required for hyper-automation in banking. Utilizing these technologies, we have offered multiple banking and financial services solutions such as compliance monitoring, contract management, loan origination, and KYC integration.

Check out here: How Softude is bringing a tech-powered change in BFSI sector.