This archive report was first published on 4 December 2019.
Published on December 4, 2019, the banking industry is undergoing a significant transformation with the help of automation. This concept has been met with a mix of skepticism and hope, but when done right, it has the power to revolutionize the industry.
According to McKinsey, banks that successfully implement automation strategies will be in a stronger position to innovate and disrupt the market. They will be able to free up resources and focus on higher-value tasks, ultimately leading to increased efficiency and cost savings.
Andrea Tucker, Research and Development Head at e4, a fintech software specialist, emphasizes the importance of automation in the banking industry. She notes that new entrants have had a significant influence on the disruption of traditional banking models. These start-ups claim to offer a digital, modern, and technology-led approach, which allows them to scale quickly and provide a seamless online client on-boarding experience.
Automation lies at the heart of these new approaches, and as the technologies used mature, the application of robotics and artificial intelligence for bank processes will assist banks in transforming. Tucker believes that local banks have met the challenge head-on and have invested heavily in digital strategies and new technologies to become more competitive.
“Automation should not be seen in a negative light, it plays a vital role, making it easier for a customer to bank digitally, ultimately improving engagements and ensuring the bank’s service is more efficient,” says Tucker. She emphasizes the need for a strategic initiative to educate customers and encourage them to make use of these more efficient digital options.
McKinsey predicts a second wave of automation and AI emerging in the next few years, where machines will do between 10 to 25 percent of work across bank functions, increasing capacity and freeing employees to focus on higher-value tasks and projects. To capture this opportunity, banks must take a strategic, rather than tactical, approach and design new processes that are optimized for automated/AI work.
