How Automation is Changing the Banking Industry
The world is today at a point of digital explosion. Everything is headed towards digitalization and the banking sector is headed towards automation. The financial industry has been slower than others on the uptake, but over the past few years has warmed to the automation idea.
The improvement of digital devices has led to a change in the way clients transact with their bankers. Banks, on the other hand, are steadily picking up digital blocks, otherwise called the “ABCD of digital technologies.” The ABCD stands for:
A- Artificial Intelligence/ Robotic Process Automation
B-Big data and advanced analytics
C- cloud computing
D-devices in different processes such as Know Your Customer (KYC), trade finance and cross border transactions.
Automation is changing the banking industry in several ways:
Financial institutions through automation have gained a personalized forum, which ensures timely and much better execution of all banking processes. Automation has changed the back office procedures for the better. There are usually employees in their thousands going through client requests, which are slow and costly, with a higher rate of errors. Automation efficiently solves this problem, by cutting down on time used for processing.
Most banking institutions have adopted the “ABCD of digital technologies” because they are easy to adopt into existing systems. Cost efficiency and Customer experience are the reason why automation is fast gaining traction.
Cloud computing is becoming very popular because of how possible it is to bring AI (Artificial Intelligence) and Big-data solutions together. The use of mobiles means that back offices can look at options of bringing mobile independence for clients and staff members as well.
Better Customer Experience
With automation, clients are promised a better customer experience because of the high speed that decisions are made. Automation reduces the waiting period, and it is possible to track a transaction faster than it would have taken without automation. IoT, being an intricate web of devices, make it easier to track each transaction to its source
Faster fraud detection and protection
Banking institutions can deploy an automated fraud detection program. The banks can also increase the rate of accuracy in detecting fraudulent credit card transactions, and a money-laundering prevention program.
Automation can track down suspicious emails to their sources, which can predict and prevent security threats.
ATMs watched by cameras, which provide real-time images and instant Face recognition by using sophisticated AI techniques like deep learning used to prevent and detect fraud. The banking industry is constantly searching for ways to better customer experience, comply with laws and regulations, risk reduction and increased efficiency. For these reasons, many banks have already embarked on the automation process.
Potential threats with more automation?
In as much as automation is advancing the banking industry, data leaks remains a real threat. IoT devices are indispensable when it comes to collecting data for analysis. With more internet-enabled gadgets collecting data in real-time, companies have more to lose by the day. IoT devices increase the potential risks of customer data and privacy being compromised not only because it’s growing in numbers, but the devices themselves also are not particularly secure, which makes the network a piece of cake to hack. This is the one fear that might hold back automation in the banking sector. However, there are many measures to counter the hacking threat that the industry can put into good use, and the pros of automation far outweigh the cons.
The future of automation
The future of automation in finance and banking is bright. Currently, banks and other institutions are integrating automation into their services, and their clients are sold to the idea. Automation has the potential to disrupt the finance world, ensuring all financial institutions embrace it.
IoT products from Google and Apple have taken automation to a completely different level. Smartwatches connect to a client’s account and enable a client to get notifications from the bank such as balance, reward points, or alerts.
Automation is making banking more efficient and improving the customer experience. This technology has many potentials, which will do the banking experience many good. The customer-waiting period is thing of the past, and chatbots are now able to give the customers solutions, unlike in the past where you had to wait for days for a response.