Do you remember the great 2009 recession period?
It stimulated the finance technologies and left finance institutes with no choice rather than technology adoption!
That was the time when finance technologies went viral and the term – FinTech – became the talk of the town.
Same way, the COVID-19 has already stimulated a big disruption in the finance industry and a few industry experts have already discovered it. It is none other than software-based automation.
Why is software-based automation evolving as a big disruption in the finance industry?
COVID-19 changed user behaviors in almost every industry. It also made business owners realize that high dependency on manual processes which is eating up time and promoting errors will be now more dangerous.
Talking specifically about the finance industry where many repetitive tasks result in a bored workforce which does not perform the task accurately, it is now a zero scope for any human error.
Many financial institutions have already started planning to add up time for staff to make some important decisions that actually require human intelligence. Several similar requirements of the companies entertaining finance industry can only be fulfilled by software-based automation which is called robotic process automation.
One of the factors which are fueling the adoption of software-based automation is the recent advancement in the RPA industry that is making software bots way too affordable.
It is also now within the reach of developers to combine groundbreaking technologies such as artificial intelligence and machine learning with software robots to make intelligent decisions rather than making decisions based on if-else logic.
A few jaw-dropping facts of finance automation
- According to Capgemini’s new report, the finance industry can reap up to $512 billion in global revenue using software-based automation.
- A financing business can save 10-25% easily by applying automation.
- One-third of financial institutions have already seen a 2-5% top-line growth with automation.
- 64% of financial institutions across the sector experienced an improvement in customer service with automation.
This is not all. With new automation trends influencing the finance industry in post-COVID-19, we will soon get some more jaw-dropping facts. But before that, let’s first discuss the top 5 automation trends in the finance industry.
Top 5 Automation Trends in Finance Industry
Let’s start with the basics. The automation can be actualized with software bots. For that, we need to first develop software bots using automation tools such as UIPath and Winautomation and then install developed software bots on the computers where we want to automate a task or the process.
These software bots work similarly to humans. They open the email, open the attachment, download it, and save it in a folder. The software bots can perform more complex tasks than this. However, it has one limitation – it can only work perfectly on processes with fixed input and output.
To automate a process with variable input and output, we need to use AI and machine learning technologies to give software bots the intelligence.
So, now when you know the basics of software-based automation, let’s come to the point – automation trends in the finance industry.
1. Automation in mobile apps
Generally, a software bot is deployed on a computer or on a system to process back-office tasks automatically. But now with the increasing number of people who utilize financial services using mobile apps, it becomes crucial to provide them with good user experience on mobile apps.
The challenge is that finance for users is boring and the poor UI of the mobile app makes it worse. Software-based automation solves this challenge by automating many manual tasks on mobile apps.
For example, it is really tedious and time-consuming to add several spending data in a budgeting app. It does not only take time but over the period, the user gets bored and stops feeding data to the app.
Thus, there are multiple budgeting or spending tracker apps with built-in automation. It automatically adds spending data including spending type, date, and category into the app whenever a user spends somewhere.
Such automation makes boring finance apps fun and purposeful by reducing the efforts of users.
2. Automating entire process rather than a task
During the early stages of software-based automation, companies including financial institutions preferred to only automate a few tasks. One of the reasons behind partial automation was the high cost and less reliability.
But in the last two years, the software bot industry evolved so greatly with new easy features in automation tools that help developers to develop software bot accurately and in less time. That ultimately reduced the development cost and made software bot more error-free and reliable.
Another reason why finance institutes automate the entire process is the shift in their automation goal. In the past, their automation goals were limited to cost-saving. But now, they want to eliminate the bottleneck from the entire workflow to achieve high productivity without wasting any resources. And of course, to eliminate the bottleneck from the entire workflow, we need to automate the entire process, not a single task.
3. Automating Customer Service
This is a real pain of both FinTech startups and financial institutions. Even after hiring a number of customer service executives, they fail to solve customer problems rapidly and assist customers properly.
Not getting personalized experience, no first-call resolution, slow service delivery and long waiting time are some of the problems customers face when they contact a customer service executive with a query.
To get rid of these age-long problems, financial institutions are now adopting active and passive AI-based automation solutions. The active AI-based automation solutions understand customers’ queries and give personalized answers within seconds.
Whereas, the passive AI-based automation solutions streamline the customer service workflow and help customer service executives to carry out only less complex tasks while software bots perform labor-intensive tasks. Such collaboration adds up time for executives which they can utilize in delivering remarkable customer service.
4. Giving priority to processes with high error possibilities
An error is very common and very expensive in the finance industry. An error in a single task does not affect the end result significantly. But when there is an error in one phase of the process and it goes unattended, it creates havoc and affects the company very severely in terms of financial and reputation loss.
To avoid such a disaster because of human mistakes, almost all finance institutes are now planning to replace humans with software bots to perform processes with high error possibilities.
One such process is invoicing. At the end of every month, finance companies have to send several invoices to their large customer base. This is by default a very tiring and time-consuming process eating up many days of an entire team.
Since the process is repetitive in the case of every customer, the employees get bored over time which eventually leads to errors. Data collection from multiple sources also creates possibilities for errors.
But the software bot performs the same process with very high accuracy and in very little time. The financial institutes cannot only send error-free invoices to customers but also save huge on the HR budget.
5. ‘Human First – Robot Second’ Approach
There was a time when everyone was talking about how robots will replace humans. It is, of course, a fact but up to one extent. But if we think with a broader sense, we can easily understand that a software robot can never be able to replace humans because of the intelligence a human has.
Financial institutions have already realized that and thus, they are not aiming to replace humans anymore. Instead, they want to build the collaborative work environment of the humans and software robots to reduce the efforts of humans on labor-intensive tasks and allow them to utilize their intelligence on some critical processes where human intelligence is actually needed.
Hyper adoption of automation in the finance industry does not come as a surprise. Many have predicted a long before then the pandemic that FinTech startups and financial institutions have to utilize software-based automation on a large scale to reduce human errors, productivity hours loss and to solve deep-rooted problems with customer service.
However, the pandemic is altering this prediction a bit. Now, FinTech companies are automating mobile apps, automating the entire process rather than just tasks, giving priority to processes with high error possibilities, and promoting a collaborative work environment.
But we are still far from reaching an end to the tunnel. The ongoing pandemic may alter these trends too. The game is now becoming nail-biting!
Parth Patel is a serial entrepreneur and CEO of SyS Creations – a leading robotic process automation development firm. Operating the IT Infrastructure of SMEs and startups keeps him on his toes and his passion for helping others keeps him motivated.