What's on the horizon for banking automation?

This is part one of a series on banking automation.

With the onset of AI tools for the general masses, automation is now common knowledge. Every industry is grappling with how to utilize AI effectively, while avoiding potential legal and ethical pitfalls. The banking industry is no exception, as many either have already or are currently working on deploying automation tools, such as chatbots, virtual assistants and more.

While these tools can certainly cut costs, banks also have to deal with questions of how automation can impact their brand image and the customer experience. They also have to find the balance between delivering cutting edge technology while still keeping the personal touch.

To gain insights into these questions, ATM Marketplace spoke with Sanghost Bhalla, assistant VP and senior consulting principal for banking and financial services at Cognizant.

Q. What sort of ways do you see banks using automation currently?

A. Banks have been increasingly relying on automation to enhance operations and processes, reduce costs, and improve the overall experience for customers and employees. One example of this is the use of Robotic Process Automation for back and middle-office operations, which enables banks to automate repetitive tasks such as data entry, reconciliation, and reporting. Automation is also being leveraged to create new front-office capabilities such as chatbots, virtual assistants, and account onboarding to deliver better client experiences.

Q. What ways do you see banks using automation in the near future?

A. The banking industry is constantly evolving, and banks are now actively developing advanced analytics and decision automation capabilities to proactively respond to opportunities and threats faster. For example, by leveraging these capabilities, banks can detect early warning signs of fraud, streamline payments, improve collections, and manage disputes efficiently. Cloud and data modernization are also critical components that enable banks to implement effective intelligence and automation solutions. With cloud-based infrastructure and modern data management systems, banks can quickly scale operations and leverage data to gain valuable insights that drive informed decision-making.

Q. How can banks balance automation while keeping the human touch?

A. The adoption of automation has rapidly accelerated digital banking, bringing about a significant change in the way consumers bank. While mobile and online channels have gained widespread acceptance, customers still seek personal engagement and targeted guidance for complex banking needs like mortgage or dispute resolution.

However, banks can leverage new technologies such as machine learning and artificial intelligence to provide higher-value and personalized sales and advisory services. By analyzing vast amounts of data with automation, these technologies can help banks identify patterns, predict outcomes and provide customers with customized recommendations that meet their unique needs. Convergence of the traditional (e.g., branch channel and call centers) and digital channels (online, mobile), will provide the best integrated channel experience and engagement.

Q. How can automation improve a bank's reputation?

A. Automation and AI are powerful technologies that can help deliver strategic benefits. First, it can be leveraged at enterprise scale to build effective controls and strengthen first, second, and third lines of defense. Second, it can enable operational resiliency in the system to fight against financial crime and maintain compliance with never ending changes in regulations. Third, it can help build customer intelligence to deliver personalization and drive relationship primacy.

However, these technologies can introduce risks of their own. Banks need to have a systematic approach to ensure that they adopt these technologies in a responsible and effective way. This may involve developing a clear strategy for automation and AI adoption, building the necessary technical capabilities, and establishing appropriate governance and risk management frameworks.