Guest blog: Leveraging test automation and AI How banks and building societies can innovate themse

Exploring the Transformative Impact of Data Analytics on the Banking Industry

automation in banking sector

While GPT chatbots offer numerous benefits, ethical aspects must also be taken into account. Banks must ensure transparency in disclosing the use of chatbots to customers, clearly stating the limitations and capabilities of the chatbot. Additionally, privacy and data protection should be a top priority for banks that consider deploying a chatbot for their operations. Banks must implement robust security measures to safeguard customer data and comply with relevant regulations, such as data encryption, access controls, and strict data handling protocols.

automation in banking sector

Banks can respond more quickly to changing conditions and circumstances by increasing automation. For example, we saw the benefits of this during the earlier stages of the pandemic when automation helped

banks streamline application processes for mortgage payment holidays and bounce-back business loans. Banks may find that they need this same level of efficiency again as the energy and cost-of-living crises begin to bite. For example, a bank may use data analytics to identify customers who are more likely to switch to a competitor, based on their transaction history and other data points. The bank can then take proactive measures to retain these customers, such as offering them incentives to stay or providing them with personalized offers that are tailored to their needs.

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Our suite of services can be deployed to build tailored solutions that maximize the use of data-driven processes in the automation of the loan origination lifecycle. This White Paper looks in detail at how these technologies are transforming the ways banks operate. It considers the huge process improvements that can be achieved by automating manual tasks; how digital technology can help banks cope with regulatory demands, as well as the crucial cost savings that can be made through digitalization. For retail and commercial banks, low interest rates in many countries are keeping loan margins thin.

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Meanwhile, FinTech businesses are eating into banks’ market share by offering various banking products, including payment services, loans and wealth management, at highly competitive rates. These algorithms enable the analysis of vast data sets, identifying patterns and anomalies indicative of fraudulent behaviour. AI-powered fraud management systems excel at detecting and preventing various types of fraud, including payment fraud, identity theft, and phishing attacks.

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What’s more, banks can drastically increase the frequency with which they conduct repeat KYC checks, allowing virtual workers to execute on a periodic, out-of-hours basis. BPA, along with leading automation technologies like Hyperautomation, AI (Artificial Intelligence), and ML (Machine Learning), empower banks to define their financial offerings and customer journey. Here we take you through the top 6 use cases that assert the critical role BPA will play in financial services. As the curtain rises on this technological revolution, AI has become an indispensable part of the Banking, Financial Services, and Insurance Industries, transforming the very fabric of products and services.

  • They claim that the most significant shortcoming in the banking industry today is a wide spread failure on the part of senior management in banks to grasp the importance of technology and incorporate it into their strategic plans accordingly.
  • One of the significant advantages of GPT chatbots is their ability to automate various banking processes while also ensuring that crucial data isn’t breached.
  • For example, thanks to automation, predictive analytics, and artificial intelligence, customers won’t have to fill out lengthy forms during onboarding procedures, which will lower consumer friction and increase the onboarding success rate.
  • Developed by open AI, GPT is an advanced language model that uses deep learning techniques to generate high-quality responses based on the prompts given to it.
  • Innovate with a complete digital platform capability that integrates with core banking platforms and new Fintech solutions.

Increasing the coverage of online services ensures higher efficiency and better customer experience. We can help you build digital banking software solutions in order to improve customer onboarding experiences. With AI, ML and analytics applied throughout the customer life cycle, businesses can identify trends, protect identities and assets, and provide personalised customer experiences. For example, large language models can recognise, summarise, translate, predict and generate text and other content based on knowledge gained from massive datasets.

By switching to automation, a typical commercial bank would see around $100 million in one-time savings from automating customer onboarding tasks. The same bank would see another $100 million in savings every three years from the automation of ongoing monitoring processes. Multiple banking teams interacting with clients at various stages of the onboarding process increases the likelihood of costly clerical errors. 31% of compliance decision-makers list false positives as the greatest operational challenge related to AML.

How to use AI in banking?

Banks could also use AI models to provide customized financial advice, targeted product recommendations, proactive fraud detection and short support wait times. AI can guide customers through onboarding, verifying their identity, setting up accounts and providing guidance on available products.

However, it is imperative that business people within financial services appreciate the importance of proper KYC, which is something often still not realised, as the implications of not doing so – both operational and reputational – can be costly. In this customer-oriented world, customers’ diverse needs, priorities and preferences are forcing banks to redefine how they interact with them to offer the most relevant services, whenever they want. AI algorithms now are able to track, analyse customer data (behavioural, demographics, location etc.) to determine the customer identity and in addition to recommending the best service, they are able to understand and solve a problem immediately. Since Machines are not only used in simple tasks but also started to determine giving loans, or recommending investments to customers; recently, a common concern in the industry seems to be ‘robots are going to take all the jobs’. In fact, an Accentura survey ‘Benefits of Robotics in Financial Services’ indicates that in some areas in the Banking industry, time to perform tasks was reduced by up to 90%. Also JP Morgan Chase & Co has managed to cut time spent on mundane tasks such as interpreting loan agreements down to literally seconds rather than a total of 360,000 hours a year, using machine learning.

These chatbots can be highly capable of understanding and responding to customer queries conversationally. Al., (2016), E banking has become an important channel to sell the products and services and is perceived to be necessity in order to stay profitable in successful. There is a growing interest in understanding the users’ experience (Pyun, 2012), as automation in banking sector e-banking is observed to be a larger concept than user satisfaction. From this perspective, assessing the user experience is essential for many technology products and services (Salehi, et. al., 2014). Customers have started perceiving the services of bank through internet as a prime attractive feature than any other prime product features of the bank.

automation in banking sector

Long story short, banks and financial institutions can improve customer satisfaction by speeding up loan/mortgage applications and approvals using robotic process automation. Let’s first take a look at IT departments, which Banks have been using AI automation for a long time. In an Accenture Technology Vision survey, nearly half of the banks indicated that they have achieved 15% or more in cost savings from automating systems in the past two years. In some financial services areas, costs were reduced by 80% and time to perform tasks was reduced by up to 90%. Another challenge faced by the banking industry in Ethiopia is the limited financial resources of some banks, which can make it difficult to adopt new technology and innovations.


By using our Lending and Leasing Risk Management Dashboard built-in Microsoft PowerBI, leaders in Risk, Finance and Operations and departments can track financial performance in a visual manner and spot key trends shaping the business. Other AI-powered tools can help to secure user identities and control access, identify and protect sensitive data and govern critical data and communications channels, as well as protect against external cybersecurity threats and insider risks. It comes as no surprise then, that analysts including IDC FutureScape, predict that 10 per cent of attempted identity fraud will be reduced thanks to more sophisticated AI and ML technologies in open banking sources.

Generally, banks use data analytics to determine the frequency and volume of cash withdrawals and deposits, to determine the appropriate level of liquidity required for their ATMs. This helps them to ensure that the ATMs always have sufficient cash, and that customers are not left without access to cash due to a lack of liquidity. By analyzing historical cash flow data, banks can identify patterns and trends, which helps them to forecast cash flow and manage their liquidity. Banks can also use data analytics to identify potential cash flow gaps and take proactive measures to address them, such as issuing short-term loans or increasing credit limits. This significant macro group includes the banking, financial services, and insurance industries. Automation also allows institutions to reduce their operating costs by hiring fewer people and streamlining their back–end processes.

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The quest for survival, global relevance, maintenance of existing market share and sustainable development has made exploitation of the many advantages of ICT through the use of automated devices imperative in the industry. The e-banking is transforming the banking and financial industry in terms of the nature of core products /services and the way these are packaged, proposed, delivered and consumed. It is an invaluable and powerful tool driving development, supporting growth, promoting innovation and enhancing competitiveness (Gupta, 2014; Kamel, 2015). Banks and other businesses alike are turning to IT to improve business efficiency, service quality and attract new customers (Kannabiran and Narayan, 2015). Financial institutions are now  focusing  on  new  delivery  channels  include  virtual  public  and  private  networks,  dial  up connections, personal computers and ATMs. The implementation of digital and automated banking systems has allowed banks to streamline their operations and reduce manual errors.

Also, 75% confirmed that their bank was leveraging Cloud computing to enable them to enable their digital transformation. Given the high costs of managing the back-office via legacy systems, embracing Banking Automation is an indispensable step in modern banking’s evolution. As banking undergoes significant transformation, particularly in the post-COVID19 era, the value of digital channels and Banking Automation strategies is more evident than ever. In light of pandemic-induced business and employment shifts, reducing costs to offset pandemic-related losses is paramount. But research suggests financial services could be among the most heavily affected industries in the short term, notwithstanding the fact new employment opportunities will be created as a result of automation. Robotic process automation (RPA), which relies on bots and AI workers to perform business processes, is also gaining momentum worldwide.

The impact of those challenges can be reduced if using Workato, which we will talk about in the next point. 1 – Anti-money-laundering analysis

Currently, banks spend huge amounts of money resourcing teams of anti-money-laundering analysts to investigate post-transaction alerts. One bank Thoughtonomy recently spoke to had an anti-money-laundering bill of £1.2bn ($1.5bn) per annum. It employed more than 1,500 analysts and investigated 60,000 transaction alerts every month.

automation in banking sector

Learn how market leaders are using technology to reduce operating costs while offering their customers fast personalised experiences. Independent automation expert Kieran Gilmurray looks at how technology, rising customer expectations and competition is driving digital change in the banking sector. SAS enables banks to embed real-time intelligence in every interaction, helping them make smarter, faster decisions that transform the customer experience. Hyperautomation holds the key to banks delivering fast, relevant and safe experiences across the entire customer journey.

  • With the ability to comprehend complex financial queries and ensure absolute security, GPT chatbots empower customers to receive accurate information, reducing the need for lengthy customer support calls.
  • These chatbots enhance customer engagement, streamline banking operations, offer personalized recommendations, and act as intelligent virtual assistants.
  • While chatbots are providing customer service management, understand a problem and give recommendations, they are not developed enough to provide services fully unassisted yet.
  • Organisations that upskill and retrain their staff to work alongside emerging technologies should be well placed to take advantage of the growth opportunities that automation provides.
  • A business process management (BPM) solution is an integrated platform brining real-time process monitoring, modelling and optimization together onto one system.
  • Faster query resolution, expedited loan processing, and real-time assistance are just a few examples of how customers benefit from the increased efficiency brought about by these technologies.

According to surveys, banks and insurance businesses anticipate an 86% increase in AI-related projects’ expenditures by 2025. Although investing in cutting-edge technology can have a big payoff, there’s a chance that this rush to adopt artificial intelligence is leaving some critical gaps. By bringing transparency to complex corporate structures and identifying ultimate beneficial ownership, Encompass delivers accurate and comprehensive KYC due diligence on demand. Let’s outline the key benefits of the Encompass platform for automating and streamlining the due diligence in banking.

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What is the purpose of automation?

With automation, we can reduce costs, time, and waste as well as increase productivity, reduce mistakes, and control all the processes of the business in real time. You can replace manual activities with automated ones or reuse the software and systems to support numerous other tasks.

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