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How to Improve Banking Processes using Workflow Management Software?

Maria Christine Johnson

Feb 28 2022
workflow management in banking

According to Baker Institute for Public Policy, it is found that the total non-interest expenses of the US banks have been increased to more than $50 billion a year after passing the Dodd-Frank act. If automation is introduced in the banking process, it will facilitate the process by minimizing errors whilst adhering to the rules and regulations. Since financial industries provide a multitude of services with various front and backend processes, implementing automation will improve the overall banking process. Account opening, account closure, accounts payable, credit and debit card processing, loan processing and customer service can be automated to provide a smooth customer experience. 

Now, financial institutions around the world have many processes that are regulated by rules. These rules change often depending upon the economic situation of the country. Banks have to satisfy compliance rules that have been set in place. Every transaction and process have to be tracked, executed and recorded. This increases the load on banking staff who have to work on countless spreadsheets and ensure they are true to their data. Process consistency has to be maintained no matter how complex the process is, which thereby increases the labor costs. Therefore, banks and financial organizations are spending a lot of money just to compile the information and construct the data. No access to real-time data, human errors and incorrect information costs money to the financial institutions. 

Why Do You Need to Automate the Banking Process?

The introduction of automation in the banking process will increase overall productivity, reduce costs and enhance customer experience. Let’s discuss how workflow automation will have a great impact on the various shortcomings of the banking sector.

Disparate Data systems: 

Disparate data systems are said to be the main reason for inefficiency in the banking processes. Our data-driven world looks at key numbers and analytics for insights. These methods may change in the future as they are constantly evolving. So, financial institutions can utilize various Business Intelligence (BI) tools that are available in the market. They can be developed and deployed based on the institution’s needs. Using Robotic Process Automation (RPA) bots for collecting, compiling, and integrating data will help in consolidating huge chunks of data at a low cost.  

If data is not accurate, it will be directly related to the increase in waste of revenue. As human errors constitute about 60% of inaccurate data, the final cost to rectify the disparate data is increased, thereby negatively impacting the customers’ relationship with the banks. Therefore, it is best to invest in a workflow management software that will help in streamlining the workflow, accessing the key data, integrating and cleaning up the data by applying RPA for collection and assimilation of the data.

Some banking firms still use spreadsheets and shared folders to handle the data present outside the system. As collecting and assimilating the data manually is a tedious process, using workflow automation in financial institutions can help in integrating and automating the data collection process. 

Low Productivity: 

Banking institutions have employed many people to handle their processes. Even though some of the organizations have improved their processes, most of them still use emails, paper-based applications or reports, spreadsheets, and phone calls. This sometimes causes discrepancies and friction between customers and financial institutions. Based on the report by WorkMarket, it is said that 90% of employees believe that using automation has aided them in completing their tasks up to 42% quicker than before. Automation has also reduced manual errors (48%) and ensured better work quality (38%). Streamlining various banking processes with the help of workflow automation will greatly reduce work pressure on the employees at the same time increase their productivity with minimal errors.

Adhering to Compliance

Failure to adhering compliance laws has cost up to $ 180.9 billion in the global market. The global average in the distribution of compliance costs is technology (40%), labor (57%), and others (3%). Financial institutions will face a negative impact on productivity due to the issues caused by compliance laws. This stresses the managers where they have to go extra to ensure they help in retaining skilled professionals. Introducing workflow automation with predefined compliance rules and regulations will reduce stress on the companies. It will ensure financial institutions have transparency about the entire business process. It will also greatly reduce costs spent on failure to adhering compliance laws by the banks.

Scalability

There might be a sudden influx in processes if there’s a dire socio-economic situation. It will be difficult for the employees to handle such a sudden change. This might lead to a lot of manual errors, quality of productivity, and an increase in wastage costs. However, if companies incorporate workflow automation, the machines can handle heavy volumes during peak hours with minimal errors while adhering to rules. This will allow the employees to handle tasks where manual intervention is needed. Banking and financial institutions have combined together to bridge the gap between processes by implementing workflow management software that can be customized according to the companies’ needs. 

Use Cases/Examples of Banking Workflow Automation

Customer Service

Banks usually deal with multiple situations like account enquiry, loan processing, credit card queries and so on. Workflow automation resolves low priority queries on its own and helps the customer service team to focus on high priority tasks. It works by comparing and verifying the data available in the bank with the customer on call. Chatbots like A8Chat(link our A8chat here) play a vital role by reducing the waiting period and answering the customer’s questions which improves customer relations.

KYC Process

Know Your Customer (KYC) is a mandatory process that exists in every bank. US banks have spent about $384 million a year on KYC compliance, says a Thomas Reuters report. As it involves huge costs for the KYC process, banks have started to automate by collecting the customer data, screening and validating them. An Indian Bank has used RPA bots for automating various KYC tasks. From automatically processing the data from various receipts and documents to archiving and generating MIS reports, the bot handled every KYC task. This has caused about a 60% increase in productivity and a 50% reduction in manual work.

Accounts Payable

Accounts payable digitizes invoices from the vendors with the help of Optical Character Recognition (OCR). This monotonous process works by extracting data from invoices, verifying and processing it. When this process is automated, it automatically credits the payment to the vendor’s account by validating. 

Card Management

Workflow automation can handle processes such as debit and credit card processing, card replacement, reversal of charges, billing and card blocking depending on customers’ requests. These repetitive processes demand a lot of time and attention from the employees. With the help of workflow automation in card management, cycle times and customers’ experiences are greatly improved and reduced workload on employees. A private bank in Turkey used automation in credit card operations which reduced customer feedback handling time significantly. They processed over 4 million transactions in 2020 alone. 

Related article: 11 Important Banking Processes to Automate with Workflow Management Software in 2022

How does Autonom8’s workflow management software improve the Banking processes?

Our integrated platform at Autonom8 aids in automating business processes. Banks can use BI tools that automate customer journeys using chatbots, automation workflows, and data analytical tools.

Customers can use A8Chat to converse with the bots easily. They can also send specified chat task flows to separate departments if human intervention is needed.

A8Chat aids in transforming the integrated document scanning and securing image recognition system. Our chatbot platform will mask sensitive information by identifying the type of content and match patterns for diagnosing missing or incorrect documents.

Our customers can effortlessly manage multiple accounts via dashboard using A8Chat and A8Flow, which shows various stages of the entire mortgage process. To know more about the services we offer, contact us at https://autonom8.com/contact-us/

 

FAQs on Banking Workflow Management

What is Bank Workflow Management?

A bank workflow management software allows you to automate business processes by defining how to perform tasks and when they should be performed. The entire process is determined and each task is defined as a step in the workflow.

Which Banking Workflows Can Be Automated?

1. Loan processing
2. Account closure process
3. Know Your Customer(KYC)
4. Anti-Money Laundering(AML)
5. Accounts payable
6. Credit card application processing
7. Fraud detection
8. General ledger
9. Mortgage processing
10. Bank reconciliation

What is a Banking Customer Journey Map?

Customer Journey Mapping helps us understand what customers are doing when using our services. It can also let us identify potential areas of improvement and anticipate new ways to improve our service with the customers.

What is a Customer Journey Automation in Banking?

Customer journey automation in banking sets a predefined route to aid customers with any help that they may need. It helps in improving customer engagement, messages and other interactive features. It enhances the customer experience using tools that assess and enhance your data with programs to provide relevant timely targeting and communications.

How Automation is Changing the Banking Industry?

Bank workflow management software allows banks and financial institutions to offer better customer service with reduced human effort. BPM software mitigates various risks by automating processes that need human intervention. Compliance costs are also reduced by automating manual tasks.