5 key areas where banks can implement automation solutions

ARTICLE | March 30, 2023

Authored by RSM US LLP

As automation has become more widely available to the financial services industry, banks need to take advantage of automated solutions to streamline manual systems and processes and maintain a competitive edge. Banks should do more than seek out automation for a solution to a specific problem; rather, they should take a holistic approach to automation and craft a strategy that incorporates automation in a variety of ways that could potentially improve many functions of their business.

While commercial off-the-shelf software tools exist for specific automation use cases, banks also need to understand how automation fits into their broader business strategy and how to weave it throughout the organization’s processes. This will empower leadership teams to understand where a customized approach is necessary and where turnkey solutions may be suitable.

Here are five specific areas that banks should assess for automation readiness and efficiency gains:

1) Customer experience:

A frictionless customer experience has become the standard expectation across many industries, and banking is no exception. In the past, if a customer wanted to open a deposit account at a bank one month and take out a loan the next month, the bank might require two interactions with two different employees to gather data from that customer. Process enhancements exist today to automate and streamline these processes to remove redundancy and enhance the customer experience.

Automation can streamline the intake and digital cataloging of customer information, pulling that data together into a single place and data set that employees from various functions of the bank can query and use. The consistency of information makes the experience more palatable for the customer, and more efficient for employees.

2) Credit approval and loan operations:

A typical commercial loan application and approval process can require the loan applicant to submit a significant number of documentation items and pieces of information to the bank. Using an automated tool to gather, process and organize that information can significantly cut the cycle time for the loan application, approval, and origination process. Additionally, with an automated process on the front end, the loan operations process on the back end of a transaction is more efficient and seamless as employees have access to all information obtained electronically and in an organized format.

Automated solutions for credit and loan operations—as highlighted in this case study—can result in better information and quicker decisions using integration with credit bureaus or other data providers via an application programming interface (API), consistent application of credit policies throughout underwriting, and faster loan decisions.

3) Data management:

Most banks have numerous data sets that can be queried separately but not all together. From a lending perspective, for instance, if a bank has a commercial loan system, a retail loan system, and a credit card system and all of those have different outputs, it may be difficult to analyze this data and have a holistic and meaningful view of the relationship, profitability and risk profile of the customer.

Organizations should explore how automation solutions may improve their existing infrastructure and make their data more relevant and useful, enable real-time reporting, and build a more complete snapshot of the customer profile.

4)Compliance:

Automation tools can vastly improve the process for intake and maintenance of data required for compliance with know your customer (KYC) regulations. Automation can relieve the manual process associated with customer onboarding and ongoing monitoring and verification efforts. Compliance automation creates a uniform process and data set that the bank can use over the duration of the customer life cycle rather than on an as-needed basis as onboarding is completed or as monitoring items arise. 

5) Streamlining the audit function:

As we highlighted in this case study, automation can help a bank’s internal audit department “spend less time gathering data and scoping audits and more time on fieldwork such as testing hypotheses, assessing risk management and reaching conclusions using a data-centric approach.” In that specific case, an intelligent automation solution enabled a bank to identify gaps and pain points in how risk is quantified during the audit planning process, accelerate its planning process, and incorporate various data sources such as consumer complaints and regulatory standards into the audit plan. Automation can improve virtually any function of a bank’s business, but organizations may find it daunting to determine where or how to begin implementing such solutions. A third-party advisor can help make sure the bank has a valid and thorough automation strategy that takes advantage of all automated capabilities relevant and available to the organization. This strategic approach can maximize efficiencies and provide a best-in-class customer experience.