There are various complex business processes involved in BFSI, especially in handling and processing loads of customer request. These processes mainly still rely manually on human-staff and paper, which are less effective considering that banks have many incoming customer requests to be processed every day. Therefore, it takes many people at back offices to process loads of customer request, not to mention any other works that they must do such as managing sales, financial, and administrative reports. Consequently, there is a high degree of manual processing in terms of that matter.
Manual processing is no longer an option for BFSI
Manual processing is considered less effective since it takes more time to do and costly, also it possibly leads to an inconsistent result with high error rate due to human-staff’s fatigue of handling and processing loads of document work. These factors lead to shift perspective of banks to adapt digital and automation solutions to enhance and improve their internal business processes, especially customer-related front-end operations.
The desire and needs to achieve a rapid, effective, and efficient, large-scale up automation to improve business processes are leading to the rapid and expanding growth of automation itself. This may also due to the shift in back-office processes of many BFSI sectors, which leads to competition of one another of who is effectively and successfully optimize their business processes by harnessing automation.
Since customer is the key of business growth, companies should consider the most convenient way of customer-facing operations. Cognitive automation arises as a cutting-edge technology that compromises and offers customers convenience and much more effective business processes.
Cognitive Automation as solution
According to 2014 survey done by PMG IT, 98% of IT professionals view the automation of business processes as vital to driving business benefits in today’s corporate environment. Based on research done by McKinsey, about 60% of all occupations have at least 30% of activities that could be automated.
Based on Gartner, Intelligent automation is number 1 strategic technology trend for 2020. This will stay relevant and surpass the traditional rule-based Robotic Process Automation (RPA).
Cognitive automation, or also known as intelligent automation, deals with the incorporation of advanced technologies, including Artificial Intelligence (AI) and Machine Learning (ML) to improve how this technology automates processes. This extension of features arises from the challenge of how to automate processes that require human knowledge. The solution is intelligent automation.
Improving Processes in BFSI
How possible it is to implement cognitive automation?
Here are how BFSI can leverage intelligent automation to automate, simplify, and streamline their recurring manual tasks:
Banking and Financial Services
Study by PwC shows that financial services realize that 15% from overall cost reduction on process comes by eliminating manual steps and rework. For banking, they can have KYC/AML and loan approval processing to automate.
According to Council for Affordable Quality Healthcare, claims processing in insurance companies run 5x faster and are nearly 3-4.5x cost-effective. Some possible area to implement automation in insurance can be automating policy administration, on-boarding new customers, underwriting automation, and claims processing automation.
Transforming operations in BFSI
There are possible ways to adapt and implement cognitive automation in order to achieve a two-way effective business process for both company and customers.
1. Automate loan processing
Loan processing involves of time-consuming screening of high amount of information. Implementing cognitive automation can reduce the tasks and minimize the time to process loan prediction for customers. Cognitive automation has capabilities to speed up but not miss out the process of loan processing prediction and create an improved and effective business processes for both company and customers.
Enabling cognitive automation in loan processing prediction includes automatically give predict chances for an approved loan, managing the process flows, and prioritize the loans applications. It also has the ability to predict the abnormality of a customer that is beneficial for fraud detection and prevention.
Cognitive bots will predict loan approval proposed by a prospective customer. Cognitive bots will make a decision whether the proposed loan is approved or rejected. This capability is possible as Cognitive bots is enhanced with A.I. Machine Learning, which allows cognitive bots to learn the pattern and trend of historical data to make future predictions.
2. KYC Process Automation
Cognitive Automation in banking can define the ability to replace human operations within banking with the use of robots and other forms of automation such as machine learning, artificial intelligence, and robotics.
This allows us to automate data synchronization without the cumbersome integration of solid investments. This technology is likely to change the regulatory and compliance landscape for banks, but it is still the area where automation by cognitive bots may be most effective.
One of the best examples of Cognitive Automation in banking is the automation of complete KYC processes. By automating document identification, cognitive bots can help streamline and automate the most important components of KYC compliance.
3. Improving Customer On-boarding Process
Customer on-boarding process is an important matter to consider, as it’s about engaging new-customer to keep the business in circle. A complex and various process that a customer needs to experience can form in dissatisfaction and therefore inflict a financial loss.
We can apply cognitive automation concepts into the customer on-boarding process in a practical way. With the objective to improve customers experience better.
Cognitive automation can leverage multichannel capabilities to authenticate submission, process documents faster automatically, detect and prevent fraud based on verification and validation of data and information. Cognitive automation can digitize and automate inbound and outbound communication, also eliminate manual processing of human-works to increase operational efficiency and most importantly, responsiveness.
4. Automate Policy Administration in Insurance
Cognitive bots can collect and combine important data of customers, as well as log into the company’s system to input information or data. This will create convenience for customers and staffs for a faster and smoother application submission process, as well as securing accuracy with data-entry.
When updates need to be sent out to customers and designated departments, cognitive bots can send out emails to customers. In addition, sending update emails of reviewed applications to all parties involved. Cognitive bots can process high-volume of emails. This means help companies to save more time and ensure that information are updated without delays.
5. Intelligent Document Processing/Extraction
Banking, financial, and insurance sector archive and store large volumes of documents, and with the advances of digital technology, companies have opened up ways to make these documents more efficient. Traditionally, companies have edited documents manually, but advances in digital technologies have opened up a new window of opportunity for companies to create documents in ways that make them more efficient.
Intelligent Document Processing is a powerful tool to extract text and data from documents. It can be used to read and identify target data fields, extract them, and then categorize them. IDP automatically extracts data from PDF invoices and automatically places the extracted data in Microsoft Excel based on the corresponding data field. For example, we have an invoice in PDF format that we can extract into certain data – fields.
Supported by A.I. Machine Learning, this technology identifies, understands, and identifies data fields to extract them accurately, and provides self-learning capabilities such as classification, categorization, and classification of data fields. This flexible and tailored document processing can be tailored to your needs with flexible, adaptive, and flexible data extraction options, while A.I. Machine learning enables a robot to handle documents even under the most difficult conditions.
6. Customer Service/Support
Customer service or support department receives loads of incoming emails every day, which is time-consuming to sort out emails and classify them based on the issues. Moreover, fatigue might happen to human-staffs in terms of many emails they would need to handle, and this might also lead to missed-out important emails. Therefore, there is a desire to implement cognitive automation with key capabilities to reduce and minimize human-works, such as automatically classifying emails based on the issues, forwarding emails to specific department, responding to customers emails and giving solution to their issues. Amazingly, cognitive automation can fulfil these needs.
In a nutshell, cognitive automation offers a solution for a bright futuristic chance for BFSI, that brings many values proposition for both companies and customers. Adapting and implementing this cutting-edge technology will shift business processes to a more effective and efficient way, as harnessing cognitive automation will theoretically save more FTEs (Full-time Equivalent).
Are you ready to shift your BFSI processes more improved by cognitive automation?
Written by: Kezia Nadira