BFS - Smart Operations Transforming Financial Operations

Abstract

While customer demands and frontend, customer-facing interfaces are evolving at breakneck speeds, the back office in banking still lags woefully behind. There is heavy dependence on paper processes, manual effort, or at best, legacy-era spreadsheets. Back-office automation could help banks eliminate these inefficiencies and discover new opportunities in core functions, such as account opening, credit processing, and fraud prevention.

Banks and Financial Service providers have typically been wary of large-scale transformation, owing to possible disruptions to business. Our robust suite of automation solutions is powered by low code platforms to reduce transformation efforts on the one hand, and advanced AI & RPA integrations for uncompromised performance, on the other.In this white paper, we detail why back-office process automation is critical to a bank’s digital transformation journey, and how we help clients on this pathway.

The Back Office Is Still Stuck Somewhere in the Early ‘80s

While secular technology trends are sweeping through businesses and transforming ways in which customers interact with their service providers, if we lift the hood and look behind the jazzy frontend, what we often find is that middle and back-office operations continue to exist in a time warp. This is not due to a lack of intent, because process automation initiatives are not recent endeavors, but have been around for decades.

We would argue that this is primarily because financial institutions serve customers from every demographic segment, and many of them expect businesses to serve them in ways with which they are habituated. Additionally, it is hard to transform banking business processes that have evolved over decades (some even over centuries). It is not feasible or desirable to bring in drastic changes, and we must remember that these processes still work, albeit in a manner which is slow, error-prone, nonscalable, and costly. Hence, paper, excel-sheets, and emails are ubiquitous across key processes. Finally, the lack of a reliable OCR technology makes it hard to digitize these paper documents.

The examples below from our recent engagements illustrate this point further:

• A UK-based merchant bank employs 100+ backoffice personnel in their Premium Financing business, managing processes involving 3500+ paper documents coming into their mailrooms every day. These paper documents are manually sorted into different categories and then ferried across to the respective owners and redistributed for further action.
• A US-based leading provider of self-directed IRAs, received most of their evidence in the form of papers, and similar interrupted workflows were executed to validate and process the documents. This resulted in increased risk exposure and a high degree of inefficiencies.
• A leading US provider of retirement investment products had a frequently interrupted onboarding process.
• A leading provider of wealth management platforms and OCIO provider employed a large workforce for fund administration. Again, this process was interrupted due to undigitized and unstructured data feeding into the system.
• A leading high street bank with exemplary front office interfaces, highly rated for its tech-driven business, had no insights into its contractor workforce – because the workforce management was manual and excel-based, making it difficult to support analytics.

So, What Can Banks Do?

Banks should take a fresh look at automation in the enterprise, taking an end-to-end customer-centric view. Thanks to new software-backed development methodologies, significant improvements in BPM platforms, and the ability to integrate process orchestration with RPA and AI out-of-the-box, it is now possible to bring in rapid acceleration to enterprise automation programs in Financial Services firms.

In our experience, a low-code BPM platform can be very useful in providing enterprise-wide, scalable smart automation by integrating people, process, and technology with out-of-the-box integrations with AI and RPA platforms.

We have built several solutions using loosely coupled frameworks to address common process automation challenges in short timelines. In one such recent instance, we designed, developed, and deployed an end-to-end automation solution for a paper-based Credit Approval process for the premium financing arm of a leading UK-based merchant bank in five days.

Requirements to Demo in 5 days in Collaborative Agile mode

However, it is important to note that there is no onesize-fits-all solution. And that’s understandable. Every enterprise is unique, since they have evolved through acquisitions, the introduction of new products and services, the adaptability to new regulations, and the expansion of emerging markets.

We recommend a two-pronged approach: first, a complete assessment of the enterprise landscape (including people, processes, and tools) to build an enterprise automation roadmap in line with business objectives. Second, an innovation capsule should be set up, comprising an Agile team to execute quick proofof-value programs, identifying the right combination of products and establishing a scalable framework.

Why Banking Processes Are Ready for Automation

Several traditional banking processes are prime candidates for end-to-end automation. Here are a few areas where we helped our clients eliminate manual processes and interruptions.

Account Opening By automating account opening processes, banks can eliminate costly and error-prone manual tasks, ensure high-quality and accurate data capture, and speed up overall processes. For a US-based leading investment firm, we implemented a robust digital solution for onboarding new customers across 17 departments, 20 different systems with 170 varied tasks resulting in over 500 emails per customer, in a record timeline. We used our proprietary client onboarding framework, using a low-code BPM platform with out-of-box integration with leading AI and RPA platforms. This achieved maximum automation in a minimum timeframe.

Loan/Credit/Financial Processing Our solutions help banks and financial institutions optimize and accelerate loan, credit, and mortgage processing through application capture, supporting documents classification, and backend export phases. We helped automate the home loan origination process for one of Australia’s largest diversified financial services group. The loan processing across 15 white labels and multiple products were operating with manual interventions impacting efficiency, increasing risk exposure, and leading to unsatisfactory client experiences due to lack of transparency. We provided a consistent, secure, paperless, and scalable solution using a BPM platform integrated with AI/NLP and RPA.

Fraud Prevention and Risk Management

We help improve the fraud prevention process by optimizing the validation and proof of financial documents. Companies can now integrate signature comparison, ensuring legal validity.

Today, banks are trying to reduce paper check transactions, given that handling paper documents is expensive. However, customers continue to use checks in record numbers, leading to the rise of fraudulent check activity. By automating check processing, banks can achieve significant cost savings and reduce turnaround time. We are working on an end-to-end solution for check fraud prevention, using the proprietary SLICE/ DICE platform and our data lake AI platform, DLXpress & ML Express.

Apart from the above, we have implemented automation solutions in other operations such as asset transfer, inter-bank reconciliations, fund administration in the middle and back Office, payment investigation and exception handling, card dispute management, and current account switching, among others

The Solution Approach

We are uniquely positioned to help financial institutions automate their back offices in response to these diverse and complex challenges. Our global talent pool combines deep industry and domain knowledge with a record of successful operational implementations of bespoke automation solutions.

Our enterprise automation framework connects people, applications, devices, and information – so you can provide an engaging experience as demanded by customers. Our process automation solutions, including out-of-the-box integration with our AI platforms and easy integration options with third-party NLP/AI and RPA platforms, enable financial institutions to replace traditional paper with digital documents. These are easy to search, access, and manage, while processing and orchestrating legacy applications to provide end-toend automation with real-time dashboards. As a result, it is possible to attract new business and customers, serving existing clients, reducing costs, increasing profits, preventing fraud, and adhering to regulatory requirements.

For institutions at key stages of embracing enterprise automation, we offer the following bespoke expertise, input, and delivery support:

Business Consulting: We use a proven process reengineering framework, ProcessGymTM, for process selection and prioritization to identify, score, and rank business processes against business-defined criteria. This helps to select the most fitting candidate(s) for automation. Further, we highlight available options and make clear recommendations against defined success criteria, informed by industry benchmarks and our own experience in executing several largescale enterprise automations for Financial Services firms. We also aid in vendor assessment and selection to determine the most effective third-party solution for our clients’ unique needs.

Intelligent Automation Services: Our Intelligent Automation Services bring together people, processes, and data with AI and RPA, delivering maximum value and fast-tracking digital transformation. We use proprietary frameworks such as SLICE for content extraction from unstructured data, DICE for image recognition (used for signature validation, company logo validation, and other use cases), TESSTM for RPA delivery, iCOB for client onboarding, TRON in IT operations, and several others.

In addition, we offer our extensive partner ecosystem to architect bespoke solutions for clients.

Data Solutions: Creating an appropriate data supply chain is essential to the realization of the full potential of enterprise automation. Our proprietary zero-code data platform helps to create data lakes in days rather than months, combining it with machine learning and advanced analytics. This helps to derive insights from the dark data in the enterprise. A useful implementation of DLExpress is to ingest data from back-office call centers and combining it with customer and transactional data sources. This will make customer service process automation-friendly, accurate, personal, direct, productive, and less costly in terms of employee time. DLExpress can be used to integrate analytics with bank workflows, preemptively avoiding potential issues.

The Opportunity to Automate is Now

The acceleration of process automation in banking is no longer unattainable. In a world where reducing costs and improving customer service is necessary to survive, it is imperative to automate processes from front to back. Fortunately, there are several technologies in the marketplace that could address this problem. Integrated BPA frameworks and platforms, combined with the new approaches to work, can unlock rapid, large-scale automation of business processes. Clearly, banks cannot afford to miss the opportunity to automate right here, right now.

As you embark on your digital transformation journey, we can help you lower costs, increase throughput, and improve margins and profitability by bringing back-office automation to the forefront.