How the banking and financial services industry can benefit from automating its processes

The banking and financial services industry has changed significantly over the last few years. These industries have always been consumer driven and have long been shaped by the wants and expectations of customers. Today, however, these wants and expectations have shifted.


Customers now expect to be served almost instantaneously, with no delay or period of latency. This has put banks and service providers under significant pressure, stretching traditional ways of doing business to breaking point. There is only one way to meet this increased demand — through automation.


But banking and financial service providers are already utilizing automation, often more comprehensively than their peers in other industries. So, how can these businesses take this a step further? How can they push the boundaries of automation to achieve the Cognitive Enterprise?

What is the Cognitive Enterprise?

Before we look at the practical benefits of advanced automation, we first need to understand just what the Cognitive Enterprise really is. This is a term coined by IBM to describe a new way of doing business — a way that is equipped to meet developing customer demand.

The Cognitive Enterprise incorporates a broad variety of leading-edge concepts — including artificial intelligence, blockchain structures, 5G connectivity, the Internet of Things and edge computing, as well as automation — to achieve evolving business aims.

Benefiting from advanced automation

Automation is evolving. In turn, this represents a world of possibility for organizations in the banking and financial services industry.

  • Easing the resource burden with RPA

Robotic Process Automation, or RPA, brings together the worlds of AI and automation to create something wholly new. This is sometimes referred to as smart automation or intelligent automation, and it consists of programmable and interactive systems and applications that carry out tasks previously handled by human operators.


Financial institutions and banks will find that their resource burden is greatly reduced when they draw upon RPA. RPA-capable applications and systems work upon a pre-programmed foundation of data but build upon this over time as they develop their understanding of the task.

Research carried out by McKinsey in 2018 found that around 42% of banking activities can be fully automated, while a further 19% of activities can be automated at least to a significant extent. Other research projects have found that RPA bots can handle around 30 times the work volume of a human operator.


This results in significant savings in terms of time, resource and cost budgeting. It also accelerates the process at the client-side, delivering them the rapid functionality they have come to expect.

  • Leveraging internal analytics

Human personnel still have a significant role to play in the new automated environment, and it is vital that these human operators are properly supported. With this in mind, we can expect to see the benefits of automation in this area of business too.


Human Resources teams are finding that internal data volumes are increasing at an almost exponential rate — something that is both great news and a cause for concern. The great news: it provides ever greater insight into the organization’s personnel. The cause for concern: it’s very difficult to process all of this data.


Automated analytics are making life much easier for these HR teams. Data is collected, processed and analyzed by powerful systems of automation so that insight is delivered quickly and painlessly. This also helps to ensure that human teams are properly supported. 


  • Balancing security with frictionless functionality

Security is going to be a key aspect of financial services and banking in the future. While this is already a critical consideration, the accelerating threat landscape means that organizations in this industry need to move quickly to outpace cybercriminals.



Complicating matters further is ease of access. The consumer expects a secure service, but they also need to be able to access functionality without delay. Somehow, businesses will need to balance both of these elements in an effective manner.


Automation of access functions is going to be key to achieving the best of both worlds. Via multi-factor authentication and automatically generated and encrypted access credentials, financial institutions will be able to ensure that only authorized users can access functionality — without compromising on speed and efficiency.


  • Supporting better functionality for digital-native consumers

Customers are becoming increasingly savvy, as banks find themselves serving a growing number of digital-native consumers. This has been reflected in a number of unprecedented challenges in the modern market, including declining in-branch traffic, increasing customer expectation, more competition from disruptors such as Amazon and Google, and regulatory changes.


With automated functionality, financial service providers can meet these increasingly complex needs. Automated service bots put a range of different capabilities right at the fingertips of the consumer, supporting a better, more digitally focused experience.

  • Establishing a forward-thinking set of ethics

A key battleground for businesses in this industry is reputation. Financial service providers need to be able to show the consumer that they are on their side rather than simply out to get ahead of the competition. As the industry becomes more and more focused on smart automation, ethics needs to go beyond the minimum standard of regulatory compliance and become an intrinsic part of the corporate identity.

IBM recently reported on the application of artificial intelligence in “debugging biases.” They argued that AI systems can be created with fairness, transparency and empathy at their core, effectively bypassing human prejudices and fostering a better way of dealing with customers. Building this kind of AI into automated processes could usher in a new age in the finance sector, making interactions far more positive for all customers.

  • Achieving an important component in the Cognitive Enterprise

As we’ve discussed above, automation is one of the underlying tenets of IBM’s Cognitive Enterprise. Embracing the capability of and potential of automation is going to be a fundamental part of business in the coming years.

Financial service providers and banks who get a head start on this technological shift stand to gain the most. They will find themselves able to out-position their competitors and secure a better deal for their valued customers.

Discover more about how IBM's products support effective automation

IBM is one of the leading proponents of forward-thinking automation for the financial services sector. As an IBM Platinum partner, we are perfectly positioned to offer advice and guidance on how you can leverage the very best results from these offerings. Reach out to our team today to discover more.

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