Authored by Praveen Paulose, MD & CEO, Celusion Technologies
Hyper-automation refers to the use of numerous technological tools to automate different processes. This is done to achieve enhanced efficiency, streamlined processes, data-driven decision making, reduced operational costs, and a vastly improved customer experience, among other benefits. Some of the technological tools used to achieve hyper-automation include Artificial Intelligence, Machine Learning, Robotic Process Automation, and Data Analytics, to name but a few.
Age of undertaking various processes manually in Banking & Finance Sector
Before adopting hyper-automation, the BFSI sector relied heavily on manual processes that lacked technological tools. Banking processes almost always use paper documentation methods, often resulting in processing delays and human errors. Financial services such as loans usually require physical documents with manual processing. Additionally, many tasks, such as data entry, were labour-intensive, requiring human resources to invest a significant amount of time. Whatever automation did exist did so in the form of minimal functions like ATM transactions.
Challenges following the conventional rulebook
From the point of view of customers, things were even more difficult, as customer support was only available during business hours. Moreover, customers would have to physically visit banking/ financial corporations to have their grievances addressed. The lack of automation in BFSI also led to problems in risk management and detection of fraudulent activities by unauthorized users. Meeting regulatory & compliance requirements was a significant challenge when recording processes manually. This would cause many slowdowns throughout the entire timeline of processes. Decision-making processes would also suffer due to these slowdowns, attributed to manual assessments and the need for human interventions. These manual assessments often incur higher operational costs in the overall processes.
The lack of automation became a glaring problem to the BFSI sector due to the many hassles associated with manual processes. Thus, adoption of hyper-automation transformed the BFSI sector in many ways.
How hyper-automation helps perform the banking & financial tasks seamlessly?
Hyper-automation automated many repetitive and rule-based tasks that used to be performed manually by people. In banking, this includes opening accounts, processing claims, and more. Hyper-automation leverages technologies AI and ML to collect, integrate, and analyze data for various purposes in banking. This data is integral for fraud detection, risk assessment, customer segmentation, etc.
Hyper-automation improves risk assessment by continuously monitoring and analyzing data for anomalies and potential threads. This helps in fraud prevention, credit scoring, and compliance monitoring. Given the highly-regularized nature of the BFSI sector, hyper-automation helps organizations stay compliant by automating regulatory reporting and ensuring that all transactions adhere to the necessary standards & regulations.
Hyper-automation has also been instrumental in personalizing services according to customer financial patterns, recommending investment strategies based on income criteria, and suggesting the best products for their financial well-being. Hyper-automation also optimizes internal processes such as account reconciliation, managing documents, processing transactions, etc. This leads to reduced errors and faster service delivery. Because of all of this, by automating tasks and processes, BFSI organizations can reduce operational costs associated with manual labour and paper-based processes. Simultaneously, hyper-automation allows BFSI organizations to scale their operations efficiently, giving them a competitive edge over others by offering faster, more efficient, and more customer-centric services.
Hyper automation has further revolutionized the banking industry by significantly enhancing decision-making processes. At the forefront of this transformation are the business rule engines, which play a pivotal role in automating and optimizing various aspects of banking operations. These engines employ sophisticated algorithms and artificial intelligence to analyze vast datasets, enabling banks to make real-time decisions with unparalleled accuracy and speed. By configuring business rules tailored to specific scenarios, banks can automate routine tasks like loan approvals, fraud detection, and compliance checks, freeing up human resources for more complex and strategic tasks. Hyper automation, powered by business rule engines, not only ensures consistency in decision-making but also enables banks to adapt swiftly to changing market dynamics, ultimately improving customer satisfaction and operational efficiency in the ever-evolving landscape of the banking industry.