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Pacing ahead to conquer the next-gen technology & drive business growth

Rewiring Bank for the New Normal with Intelligent Automation

Swati Rai | JUL 24, 2020

The magnitude of aftermath of COVID-19 is still unknown as banks and other financial institutions are still navigating through it. But this global pandemic has shown some major loopholes which enterprises have in their current digital setup. Looking at the bright side these loopholes have also given way for some great upcoming opportunities and technological innovation.

But the need-gap analysis done on these cracks in the current digital setup shows, how they could majorly impact bank's operational efficiency, revenues and the risk management. Having a complicated working process with multiple legacy systems embedded with manual interventions, makes it difficult for banks to carry out their processes in busier days but operating during COVID - the pandemic where customer inquiries are at the peak with lesser staff in branch has given rise to new sets of challenges and risks all together.

By far the greatest and most complex impact of COVID-19 for banks will be the rise in defaults as cashflow of many consumers and business is collapsing due to lack of demand flows and sudden break on the business and its operations thereby giving rise to defaults. Then the rippling effect of the same is going to be in the form of Margin Pressure which banks have to face, as due to slowdown in the economy interest rates are expected to reduce which would therefore negatively hit the margins of the banks. The undue margin pressure would lead to the Cost Pressure as shrinking margins and looming crisis and reduced interest rate (to support customers with loan moratoriums) is going to directly hit the bottom-line of the banks. All these factors sum up to put pressure on banks to change the modus operandi i.e. operating model on which it was running and functioning from so long. Be it embracing the work from home model or in general branch operations with the social distancing norm or the sudden spike in volume of contacts centers, or the lack of digital alternatives, or the increase cybercrimes it has become a challenge for banks to maintain the same level of efficiency and go head strong with their current business continuity plans.

In a recent surveys of U.S. financial institutions, “less than 45% of retail banks and credit unions felt they had a high or very high degree of readiness in mobile technologies and digital platforming, with approximately 20% stating they had low or very low level of readiness.”

A recent HFS study reveals that majority of the enterprises have planned to increase their automation budget in the wake of the COVID 19

Today banking sector as a whole is on the cusp of disruption their vision needs to be purpose-driven, value- generating and operationally innovative and they need to do away with the traditional way of carrying out business built on manual processes to support the operations and functions. This has therefore kick started the Digital Strategy and digital transformation journey for many banks. Banks that were ahead in the digital maturity curve were better positioned to handle the crisis vis-à-vis to those who lagged behind.

Increased operational efficiency coupled with cost optimization and backed by technology can prove to be the right catalyst under the current situation and this can be achieved with the help of Intelligent Process Automation.

Intelligent Automation transforming Key Business Process in Banking

Intelligent Automation in its simplest form at its origin is a technology enabler that is used to automate tasks that can be repetitive, routinal and tasks which emulates human actions. It can also automate complex decision-making processes. Be it back office applications or the customer facing operations, IA can intelligently takeover all the tasks with little or almost no error.

The evolution of banking automation from rule-based to intelligence has been tremendous. But that doesn’t mean that rule-based automation is not relevant anymore infact Intelligent Automation is a sum of AI and RPA. IA can help banks to reduce operational cost, turnaround time and can easily detect any potential fraud or human error. Intelligent Automation can help banks to navigate through these challenging times but also help them build a resilient ecosystem and simultaneously increasing customer experience and maximizing cost savings for banks. Following chart provides a bird eye view of all the banking processes which have a high potential for automation and can be considered in upcoming banking automation strategy.

Following are some used cases where Intelligent Automation is making real difference in the Banking ecosystem

  • Digital KYC or e-KYC solution today helps banks automate, streamline and standardize Client Due Diligence (CDD) and Know Your Customer (KYC) processes. The solution leverages advanced analytics/AI, RPA and integrations to solve various operational challenges. This has reduced 75% manual effort, thereby decreasing costs.

  • Due to Covid there has been a tremendous increase in customer inquires as they can visit branches physically, there’s been a spike of 150% in the online inquires with thousand of types of requests, and numerous corresponding actions that must be performed for each type, the abilities of AI to understand the various nuances of individual inquires - the intent of the request and each request’s relevant data - is critical for automation. Customer inquiries were automated with Intelligent Automation and it has improved overall performance by 60% of what was previously done manually, cutting customer wait times from weeks or days down to hours or minutes.

  • Digital customer onboarding process which would take days and weeks can now be finished up in minutes rather than days or week, with Intelligent Automation. Thereby reducing the overall application processing time and improving applications processed per day to about 3 times and improving overall savings by 30% - 50% with it.

  • Conversational Banking- AI based chatbots - To allow customers to access banking from home, bank account opening can be completely done sitting at home, while a bilingual voicebot will help you with over 100 banking services. A leading private bank says its chatbot has handled more than 3.5 million queries from over 1 million unique users with 93% accuracy. Apart from handling more queries, these chatbots can be well integrated with various other channels like WhatsApp, Google Assistant and Alexa.

In the end, these are historically challenging times, and the COVID-19 global pandemic will fundamentally change how we work and engage with customers, now and into the future. The banks that will survive and thrive will be the ones that are able to react and adapt quickest to these environmental changes. Digital is at the epicenter of it all. Find some easy ways to get started with intelligent automation that can assist banks in improving business operations and customer experience. Now, as the new normal transpires, it is critical to address these opportunities.

NSEIT is amongst the early adopters of the Intelligent Automation solutions as we understand the BFSI industry closely and have been empowering them to be future ready.

Go to Business Transformation and understand how you can emancipate from conventional business process approach and step ahead in your Digital Transformation journey.

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