Business Process Automation in Banking & Finance Industry


Finance and Banking industries are amongst the crucial when it comes to economy, and most importantly both of these factors are predominantly driven by sensitive data and information. Enormous volumes of data and intense regulations within the marketplace made it mandatory for these industries to embark upon the digitization journey, to sustain their viability and ensure competitiveness. Nowadays, automation technologies are progressively evolving, and being rapidly adopted by the banking and finance industry in attempt to enhance overall industry performance and productivity. This blogpost elucidates how business process automation can be used within banking industry to enhance overall operational performance and profitability. But before this, let’s have a quick introduction of business process automation.

What is Business Process Automation?

Business Process Automation (BPA) or digital transformation is referred to the procedure of handling and managing business process by using automated processes that are innovative and technologically driven. Process automation replaces and reduces the effort, time and costs that are required to perform the task manually. It also provides enhanced accuracy and remove potential human errors. Automate business processes are especially designed to increase the overall productivity of business process with the help of modern technologies and computer software.
BPA has become the emerging trend in all the industries due to its remarkable abilities to simplify redundant and complex tasks, improve efficiency, enhance service quality, achieve target quickly, reduce operational costs and accomplishing digital transformation. BPA also helps improving business workflows and achieving higher levels of efficiency. All the major industries including banking and finance sector are widely implementing BPA as an integral part of their business strategy in order to adopt the changing needs of the industry, while redefining job responsibilities and roles and reducing human errors.

Fundamental Principles of Business Process Automation

There are 3 core principles of Business Process Automation which include the following’;

i. Orchestration

BPA allows organization to design their personalized business enterprises systems based on their specific business requirements and needs.

ii. Integration

BPA spread all across the organization and it is not limited to a certain department, unit or operation, which helps sustaining a common goal throughout the form along with improved efficiency and focused performance.

iii. Execution

BPA reduces the overall human efforts and intervention so that employees can focus on other complex and important tasks.

Common Uses & Applications of Business Process Automation in Banking & Finance Industry

BPA is commonly used for;

 Automating repetitive, data-intensive and redundant activities and tasks.
 Automating Analytics and problem-solving.
 Enforcing industrial standardization and policies.
 Working in abidance of company rules and procedures.
 Enhancing employee efficiency.
 Organizing internal operations and working processes.
 Reducing overall operational costs.
 Lowering overhead count.
 Complying with the industry standards.

Business Process Automation in Banking & Finance Industry

Machine learning, artificial intelligence and robotic processes automation (RPA) are some of the significant automation technologies that are leading the smooth digital transformation within the finance and banking sector. Biometrics and Blockchain are some other technologies that are turned out to be transformative within the banking industry. Some of the major breakthroughs that are introduced to the industry are because of these automated processes. Below we have discussed few that we found most important.

1. KYC (Know-Your-Customer)

In the banking and financial sectors, the information related to the customers is of utmost importance. Financial and banking services require customer data not only for account opening but also for other banking processes. This information is required to be passed through the internal banking process, to ensure its regulatory compliance with other regulatory agencies. And, to ensure that, multiple checks such as ID Verification, Background Checks, Reference Checks etc. are imposed. Applying the entire process step-by-step every time for every single customer, whenever they open an account or request a loan, become a very heft task for banks. This is where the efficient automated processing comes into play within the banking sector. Modern banks are now using automated systems to create a centralized information network which allow quick and easy access and push and pull of the information. These systems are using machine learning to extract information from disparate data sources.

2. Risk Analysis & Compliance

Audits are inevitable in banking operations, and this is why financial institutions and banks are significantly investing in process automation technologies, in order to automate and improve their operation that are potential to risk and compliance issues. These automation technologies not only improve the overall performance and efficiency, but also reflect amazing adaptability in relation to other IT platforms. This helps banks to better check the frauds, report risk, and check quality etc.

3. Core Banking & Finance Operations

There are numerous automation technologies available now that are being efficiently used in blend with BPA to modify and improve the back-office banking and financial operations such as ID verifications, data updates, accounts reconciliation, documentation and much more.

4. Mortgage Loan & Credit Processing

Mortgage loan systems have been amplified by the technological transformations, but especially by the process automation. The loan approval process used to take more than 60 days before the process was automated. But now, as soon as the ID checks and employment status are checked and verified, you get your loan approval. BPA has made the process a lot easier and simpler. The entire loan approval procedure has been accelerated by BPA with reduced processing time and quicker response.

5. Customer Request & Support Services

Customer service is amongst the top most priorities for banks. With scorching competition within the banking industry, banks are continuously striving hard to provide exceptional customer service to their customers. BPA has enabled banks to provide remarkable service and customer experience. For example, with automated processes, banks are now capable of responding thousands of queries everyday while offering the best possible solutions at the earliest.

6. Fraud Detection

Terrorist activities and fraud concerns have been significantly increased along with the digitization. However, RPA (Robotic Process Automation) is amongst one of the process automation technology which offer great fraud prevention by using predictive analysis and steps any data breach.

In Conclusion

Business Process Automation is playing a drastic role in improving several aspects of banking including accounting origination, approvals, collection, receivables, underwriter, general ledger, account closure etc. With BPA, banks can still do a lot more. These are only some way in which BPA can be implemented, and there is a long list of benefits that banks may reap with the help of BPA.