According to a recent McKinsey report, A new wave of automation in banking is set to increase productivity, while allowing employees to spend more time focusing on high-value projects. In order to maximize this opportunity, banks are beginning to look at strategic approaches.
According to the report, automation a huge focus of intense interest in the global banking industry.
Many banks are looking to quickly get on board and deploying the latest automation technologies in order to deliver the next innovative wave of productivity, significantly improve customer experience and more importantly cost savings in many areas of their business.
While the results have been fairly mixed so far, McKinsey expects that early issues will ultimately develop into a huge transformation in the banking and financial sectors, with massive gains for any organizations that are able to master and successfully harness the new capabilities.
Looking to deploy the kind of strategic transformation required that delivers the full benefits of automation could benefit from the ways below.
Develop the end state vision and strategy
Successful banks will be looking to totally restructure their organization and how the work requirements will be delivered. If they are working smartly, they will work bit only with the automation capabilities that exist today, but also those on the horizon.
Turning their focus to automating the processes that are essential to their long-term competitiveness, and looking to work with FinTech’s to automate internal for the processes, such as routine finance functions and basic reporting.
According to Deltec Bank, “Looking to set ambitious targets, banks and financial institutes can aim to lower costs and use the cost savings to create a more competitive advantage.”
Set up a small central team
Putting a center of excellence or COE in place is vital to the long-term automation story. A COE administers an enterprise-wide approach to transformation and plays a number of important roles, such as managing any vendor relationships, building capabilities and interfacing with the business, including some of the major support functions, such as IT and human resources.
Ensure IT is a partner
In most cases, automation at scale needs to be sponsored by each individual business and function, but a close partnership with IT is particularly important.
IT designs the overall systems lifecycle, manages the rollout against IT priorities, supports development, and performs ongoing maintenance. A successful partnership thus requires early and ongoing engagement with IT through a program steering committee and governance structures.
The change predicted to the Human areas of business and implementing a full-scale automation program while realizing the full potential, has a huge value to businesses.
New automation technologies will touch on many roles within the bank, and new ways of working will be required by various teams and employees within the business.
While automation can have significant benefits in terms of the experiences of clients, revenue and also the risk areas of the business, many automated roles work that is currently being done by people will benefit substantially by automation.
HR, therefore, plays an essential role, creating new management strategies, proactively managing changes, and using analytics to plan and coordinate the changes necessary, in terms of training of its employees.
To sum up…
However, while automation represents ingenuity and advancement in knowledge, machine learning is not a straight replacement for human interaction with clients
According to experts at global bank and finance, the fintech industry now needs to find an equilibrium between automation and manual practices so that one compliments the other.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.