Business Process Automation (BPA) in Banking

Business process automation (BPA) in banking is redefining the very nature of the customer journey. Customer expectations have grown towards a digital-first mindset, which has expanded from customer-facing challenges into the bank’s back-end dated workflows.

Considering that slow, inconvenient operations lead to customer dropoff, mobile and web-based bank services are the antitheses to these issues. J.D. Power notes that as the number of digital-only customers increases from a pre-pandemic 30% to an impressive 41%, customer satisfaction has also seen a remarkable boost.

BPA elevates this continuous satisfaction climb with a shift from basic web services to seamless, end-to-end banking experiences. This approach to automation aims to absorb time-draining manual processes from the digital workload, ultimately augmenting the decision power of human staff.

Customer expectations in digitized banking

Banking customers are increasingly aware that digital offers quicker, error-free convenience — whether they are commercial or retail. However, their expectations are rapidly reaching a scale that only business process automation can match.

For starters, many banks opened their wider range of services to web and mobile channels during the pandemic. Necessity sparked the digital shift, but flexibility remains an attractive feature to customers. BPA fits neatly into extending a bank’s flexibility.

The American Bankers Association reports that web and mobile banking are now the go-to for 70% of Americans. Customers eagerly expect that these new delivery channels will grow more robust with time. So far, features from mobile check deposits to online account opening have set new standards for the radical advancements customers crave.

Now as the digital experience becomes the norm, Capco has learned that 72% of customers want the personal relationships they expect with in-person banking. For instance, 34% of Millennials would prefer a tooth cleaning to calling their bank’s support line. Customers now expect their bank to pull context from their account history and past interactions, creating a less cumbersome journey from problem to solution.

In addition, customers feel their bank should offer a frictionless flow across service channels. Even with the expansion of digital, the Capco survey found that roughly 2 in 3 customers still want the option to speak with human support. This just highlights the value of BPA to unite both new and existing platforms for streamlined use when desired.

From the customer view, their bank should remember their past interactions in a seamless, consistent experience — on any platform, at any time, whether:

• Mobile,
• Online,
• Phone, or
• In branch.

In summary, business process automation enables banks these three main areas:

1. Expand mobile and online bank services,
2. Personalize digital services, and
3. Bridge the flow across banking channels.

Addressing banking operations challenges with business process automation

For every customer’s need, an elaborate back-office system of humans and tasks to fulfill a request. Business process automation supports customer requests across four high-level objectives according to William Scott’s 1914 book, Banking:

1. Guarding over their money and other valuables,
2. Facilitating their payments,
3. Enabling their loans, and
4. Fostering their investments.

The back-end functions that fulfill these requests require a balance of customer security, risk, and convenience. However, legacy processes are showing their age as manual, paper-heavy tasks drag far behind BPA-equipped digital competitors.

Often, legacy banking workflows persist due to a substantial mess of co-dependent processes that could only decouple with widespread operations disruptions.

BPA slims down the mess by encouraging processes to go “digital” and peeling away simpler, automation-ready tasks from complex labor best suited for human attention.

Since persistent problems reveal where business process automation can help, the back-office is worth deeply re-examining. 

Customer onboarding

Customer onboarding cross-checks many sources before opening new accounts to gauge and avoid the risks of suspicious customer activities that can compromise a financial institution. Unpacking the customer’s behaviors also opens the door to a customer’s long-term banking needs and preferences.

• BPA challenge: Without business process automation, gathering documentation, cross-referencing, verifying for accuracy, and correcting errors takes many manual labor hours and wasteful follow-up communications to complete.

Lending processing

Lending processing builds cases from a customer’s financial history and identity background to limit any roadblocks to the bank’s reliable repayment. Like onboarding, mortgages and various loans compile many first-party and third-party data sources for a better image of their potential loan recipient.

• BPA challenge: Manual document and data management leading to slow decision turnarounds and customer drop-off. Additionally, strict and evolving guardrails of today’s loan regulations leave banks choosing to either: 1) stay with existing banking processes, or 2) introduce costly, slow-to-implement workflow technologies that only meet a few years of temporary needs. 

Credit and Debit card processing

Credit and debit card processing facilitates customer account activity and maintains the integrity of their accounts to uphold the bank’s reputation for reliability. This ranges from new account applications to daily spending and irregular or undesired events.

• BPA challenge: If teams lack business process automation, departments manually coordinate siloed data with customer support claims, leading to delays in payment processing and fraud resolution.

Core banking functions

Central banking functions are a blend of essential daily operations and proactive customer protections that keep a bank’s services stable. These back-end tasks are fueled by keeping current, accurate data on customers — maintaining bank-wide transactions, account-specific calculations, and customer relationships.

• BPA challenge: Non-digitized and manual transactions leave notable delays in accounting, triggering risks like float-related fraud.  

Compliance and risk reporting

Compliance and risk reporting involves regular evaluations of all banking activity to report any fraudulence, misconduct, and concerning events to industry regulators and internal directors.  

• BPA challenge: Even with $514  billion in IT products and services investments, including many task automation efforts, audit teams are still too rigid to adapt to rapidly changing regulations and internal quality standards. Business process automation is incomplete if only isolated tasks are addressed.

Takeaways on banking operations challenges

As it stands, banks attempt to outsource their business processes to treat some of the following persistent issues: 

• Case escalation is often delayed because simple, repeatable tasks clog human staff workloads.

• Coordinating data across many internal and third-party sources slows down approvals and review processes due to manual decisions on disparate, siloed systems.

• Suspicious activity discovery tends to be delayed due to lag time between time-of-incident and staff notification.

• Adapting to industry changes is slow as teams juggle compatibility issues between legacy core systems and modern ad hoc solutions.

• Staff and customer communications lack organization due to the absence of centralized real-time progress visibility, causing redundant and error-prone activities.

Banks are now looking to BPA as an upgrade from the over $49.4 billion business process outsourcing (BPO) industry.

By letting bots fuel the more repetitive functions of their organization, banks keep their processes and sensitive information close to home. More importantly, process automation is far more efficient at addressing these banking challenges than human staffing.

How does BPA benefit banks and their customers?

BPA underpins the key value in an increasingly digital banking landscape: agility.

Banks leave behind manual processes to embrace automated flows, and the resulting upgrade in reliability and speed is felt by all involved — from customers to frontline employees and executive decision makers. 

• Less wasted time with faster decision and action times end-to-end.

• Fewer uncontrolled costs with less paperwork and manual labor hours.

• Keep more customers via more responsive, desirable customer support interactions. 

• Gain more new customers by improving customer acquisition and retention during new account phases like onboarding. 

• Elevate staff focus by alleviating bloated workflows to grow each stakeholder’s decision-making power.

• Record and organize all documentation as daily processes occur to enhance industry-regulated compliance.

By streamlining and integrating the flow of data via bot-driven actions, BPA frees bottlenecked banking teams to repurpose their time and resources for more valuable tasks.

Ultimately, business process automation keeps banking operations visible and easy to redesign for a more responsive business structure.

How BPA operates in banking

Banking leverages business process automation by building a network of real-time reflex activities between digital systems. It turns information into immediate decisions and actions that outpace any human team, while remaining easy to “rewire” for any business changes.

For instance, consider how a retail customer requests to open a new savings account with your bank.

1. Onboarding this customer typically requires many redundant requests for documentation across multiple departments.
2. BPA bypasses this pain point by instantly sharing information on-collection to a central repository and offering valuable insights along the way.
3. Not only do customers no longer have to resubmit information that’s already been provided, but teams can rapidly begin their respective reviews to turn decisions in record time.

This simple use case for BPA covers a banking process from end-to-end in a way that provides invaluable visibility and accountability. As a result of back-end efficiency, bank’s enable a customer’s seamless journey across their full lifecycle.

When banks are planning to implement their business process automation strategy, they ensure success via a multi-stage plan.

1. Target

Make your goals clear. You’ll want to know precisely what outcomes you’re seeking from your automation. 

2. Dissect

Learning your processes as they are today is essential. Your “as-is” workflows may have shadow tasks, steps that add no true value, and assumed tasks that are rarely or never completed.

3. Take action

Putting your newfound process knowledge into a comprehensive step-by-step map, you can now mobilize BPA with a clearly defined workflow.

4. Re-examine

Business process automation is a cyclical process that can only improve after being implemented. Once in production, both banking teams and analysts can determine what’s effective versus what aspects may need revision.

5. Iterate

A reinvented process is a thriving process that pushes your bank towards setting the pace of industry progress. By continuing to expand process knowledge, you’ll find new ways for BPA to augment your teams’ decision-making.

The end goal of automating your bank’s business processes is to lighten human workloads. Ultimately, this allows staff to spend more time on the work they were hired to do. 

Robotic process automation in BPA

Robotic process automation (RPA) is a core technology that enables machines to absorb tasks in business processes. RPA is currently a go-to investment for many organizations seeking to automate, even beyond banking. With Gartner forecasting the RPA market to grow by “double-digit rates” into 2024 despite COVID-19 impacts, automation is a clear priority for enterprises globally.

At the heart of business process automation, RPA robots drive the reflexive actions. This component of BPA aims to drive individual tasks in workflows across the front-office and back-office, ultimately automating processes end-to-end. Let’s explore some practical uses for robotic process automation in BPA.

Coordinating KYC data collection in customer onboarding

Intended outcome: Banks confirm that a customer is who they claim and that their past and current financial activities have little to no red flags.

Process: Banks assign risk factors to customers and may investigate further if a customer shows any signs of unsavory behavior or identity inconsistencies.

Business process automation opportunity: By tethering banking data requests and intake to a central repository, an RPA bot can use early stage customer data to trigger additional KYC requests and follow with any adjacent collections from third-parties. Once information is in the bank, a central store allows other departments to instantly utilize it — potentially using BPA to augment their duties as well.

Application approvals in lending operations 

Intended outcome: Banks verify that a customer reliably repays their financial obligations and approves them for a loan matching their repayment abilities and financial needs. 

Process: Banks rate the risks across a customer’s history — including employment, asset, credit, and taxes — against both internal decision-making rules and industry-wide requirements. 

Business process automation opportunity: Loan applications require many repetitive decision processes that can be easily assigned to an RPA bot. On receipt of a digital application, another RPA bot can funnel all initially gathered data into push-pull processes with third-parties to build a customer’s risk profile. Banking information collected at this stage can trigger rating advice to help a human lender make a better-informed decision.

Lost or stolen card claims in credit and debit card processing

Intended outcome: Banks provide convenient spending and balance management that customers expect, with the secure fraud prevention that both the bank and customers require — all in real-time.

Process: Bank departments track activities and update their records as new events occur, flagging and forwarding suspicious activity to appropriate review teams.

Business process automation opportunity: From the moment a card incident is reported to the banking support team, an RPA bot can create a case file and take action in relevant systems for immediate security precautions. Once the card has been deactivated, RPA can work with the wider BPA to compile any suspicious activity complete with suggested actions for human staff to review.

Account monitoring and updates in core banking functions

Intended outcome: Banks keep all customer transactions flowing and reconciled, making accounts transparent and reliable.

Process: Core banking teams reconcile any funds entering or leaving customer accounts, complete interest calculations, service customer loans, credit information, and other back-office maintenance activities.

Business process automation opportunity: Any activities requiring repeated calculations can be trained into an RPA bot’s rule-based decisions. Similarly, customer follow-ups for loan payment reminders and customer information updates can easily be automated to establish BPA via text and email.

Audit preparedness in compliance and risk reporting

Intended outcome: Banks trace and document all activity as it occurs, addressing issues as they appear, and simplifying recurring reporting into a clean, instant workflow.

Process: Teams complete each audit by retrieving and validating documentation of all banking activities and customer backgrounds via general ledgers, third-party reports, and validity testing to ensure high quality of every audit. 

Business process automation opportunity: Rather than wait for audit time to scramble for documentation, an RPA bot can compile and label every activity for tidy, rapid review. With everything already digitized, the bot can generate scheduled reports — with all data sliced exactly as needed — resulting in BPA with minimal human input.

Expanding RPA: The DigitalOps Toolbox in banking business process automation

In the above automation opportunities, RPA does not work alone. RPA in business process automation requires a wider toolset to:

1. Automate more task types, and
2. Orchestrate task automations into process automations.

Problem 1: RPA only works with data like accounting info and addresses that easily fits into databases — known as structured data. The future of banking needs to fuel task automation with unstructured data — like emails, photo documentation, and speech recognition audio.

Problem 2: RPA also focuses on automating specific tasks, rather than full processes. Banks have to integrate more robust tools into their process management roster to reach a successful BPA.

By enabling an ever-expanding suite of modern workflow alternatives, RPA technology allows teams to abandon many outdated methods of the banking industry.

As a concept coined by Gartner, The DigitalOps Toolbox goes includes a range of compatible technologies (including RPA) that reinforce:

• Better business process automation, and
• Better chances at success in digital transformation.

Process mining and discovery monitors your digital processes “as-is” in real-time to make your operations more transparent. 

iBPMS, or intelligent Business Process Management Software, gives you adaptive tools to model, assess, and re-model your processes with less human intervention.

iPaaS, or intelligent Platform-as-a-Service, simplifies how you build, implement, and manage your cloud-based workflows, software, and data.

Low-code allows your frontline employees to directly design tailored processes and tools for their daily work — with minimal IT assistance or technical experience.

Decision management suites help you plan, create, maintain, and reform the vast decision pathways bank-wide.

Business rules engines automate your bank’s consistent and repetitive decision-making across full processes.

Artificial intelligence (AI) and machine learning (ML) enhances BPA by finding context and drawing smart conclusions from patterns in banking data — both structured and unstructured.

Often, one of these business process automation technologies will accompany others when deployed in the workplace. For example, iBPMS and iPaaS are typically made “intelligent” by some form of machine learning or AI. Similarly, RPA and iBPMS work well together to drive automation efforts.

Fully orchestrated, the DigitalOps Toolbox is the optimal vehicle for rapid end-to-end business process automation — known as hyperautomation.

Improving data security, personalization, and cross-channel customer journey relies on effective use of these technologies.

Elevating your business process automation with a centralized platform

In summary, the next era of banking will rely heavily on dynamic digital experiences. Customers expect a faster, personal approach across every touchpoint, while easily picking up from their last interaction. 

Humans alone cannot operate at the pace and scale needed to deliver on these expectations.

Better digital processes begin at the core and back offices of a bank. Business process automation kickstarts this effort by driving manual bottlenecks out of the customer journey.

By offloading processes onto bots and other complementary tech, BPA augments human staff to repurpose admin time and costs towards high-value work.

ProcessMaker delivers an integrated central platform that fits neatly into the goals and requirements for successful process automation. Learn more about our banking BPA solution and feel free to reach out if you’re looking to explore your options further.