Intelligent automation, often called “smart automation,” is transforming the financial services sector. The business values associated with implementing intelligent automation in financial services are substantial and range from reducing operational costs to boosting efficiency. Financial institutions stand to benefit from streamlined workflows, enhanced decision-making, and improved customer service. Significant productivity improvements are possible by leveraging advanced technologies, including artificial intelligence (AI), machine learning, and robotic process automation (RPA).
The Value of Implementing Intelligent Automation in Financial Services
Boost operational efficiency – one of the most significant advantages of intelligent automation in financial services is operational efficiency. By automating routine tasks, companies can save time and resources. Applying intelligence to this automation process can amplify performance by 3-5 times the level of simple automation. For example, processing loan applications or financial reporting with the intelligence of understanding the needs of different prospective clients or the consideration of risk-based pricing analyses done in high volume. This type of advanced automation can be handled much faster than traditional automation, allowing staff to focus on high-value tasks.
Improved Accuracy – automation, on its own, reduces the chances of human error. This is particularly important in finance, where mistakes can lead to regulatory issues or lost revenue. Intelligent automation ensures that processes such as data entry, reconciliation, and reporting are not only accurate and consistent – but can be used to help gain new insights into possible business changes or fraudulent activity.
Enhanced Customer Experience – with smart automation, financial services can deliver personalized experiences to their clients while doing so quickly and efficiently. AI-powered chatbots and data analytics allow institutions to provide timely responses and anticipate customer needs, improving engagement and satisfaction. Broader patterns can also be detected helping to provide new insights into issue resolution with greater accuracy and effectiveness than “simple” automation applied to common processes.
These benefits are undeniable, but they cannot be fully realized without proper implementation. It’s crucial to understand the differences between process automation and intelligent automation to deploy these technologies successfully.
Process Automation vs. Intelligent Automation
Process automation refers to the use of technology to perform repetitive, rule-based tasks. Robotic Process Automation (RPA) is a perfect example of this. RPA can mimic human actions such as data entry or invoice processing, but it follows strict rules and doesn’t “learn” from data. Despite these shortcomings, Finance RPA offers significant opportunities for improving operational performance, as explained by Gartner in this excerpt.
In contrast, intelligent automation incorporates advanced technologies like AI and machine learning. These systems can analyze data, make decisions, and continuously improve over time. While RPA handles repetitive tasks, intelligent automation manages complex workflows, making decisions based on patterns and insights drawn from vast data sets.
The Importance of Expert Implementation
No matter how advanced technology is, achieving the full potential of intelligent automation in finance requires skilled implementation. A trained team, ideally with expertise in deploying automation solutions, is crucial. Financial institutions must consider not only the technology but also how it will integrate with existing systems and the workforce.
If your organization is planning to deploy or refine its intelligent automation strategy, here are seven common pitfalls to avoid.
Seven Common Pitfalls in Implementing Intelligent Automation
1. Dealing with Legacy Systems and Data Silos
One of the biggest challenges in implementing intelligent automation in financial services is integrating with legacy systems. Older infrastructure often lacks the flexibility needed to adopt new technologies. Additionally, data silos within organizations can limit the potential of automation. If data is scattered across systems, automation tools will struggle to work efficiently. To avoid this, institutions should conduct a thorough audit of their IT systems and ensure that data is easily accessible.
2. Underestimating Data Security and Privacy Concerns
Automation introduces new security risks, particularly concerning sensitive financial data. As more processes become automated, cyber threats also increase. Therefore, ensuring strong data security measures is crucial. Compliance with privacy regulations, such as GDPR and CCPA, is also necessary. Organizations must invest in secure systems, encryption technologies, and regular audits to ensure data integrity and privacy are maintained.
3. Failing to Train and Upskill Employees
Implementing intelligent automation changes the nature of many jobs within financial institutions. Employees need to be retrained to work alongside these technologies effectively. Failure to provide adequate training or support for staff can result in resistance, operational delays, or inefficient use of automation tools. Upskilling employees should be a priority during the deployment phase to ensure a smooth transition.
4. Choosing the Wrong Processes to Automate
Not all processes are suitable for automation. Attempting to automate overly complex or non-repetitive tasks can lead to inefficiencies or even failure. Financial institutions must carefully assess which processes can benefit the most from automation. By starting with simple, high-volume tasks, institutions can realize quick wins and gradually move towards more complex implementations.
5. Neglecting to Plan for Ongoing Maintenance and Support
Automation solutions are not “set it and forget it” systems. Regular maintenance, updates, and continuous monitoring are required to ensure they run smoothly. Ignoring the need for ongoing support can lead to breakdowns or diminished performance. Financial institutions should plan for a dedicated support team to handle issues as they arise. Note this also includes incorporating application or system updates, which include the necessary integration updates as APIs or key record changes happen over time.
6. Overcomplicating the Implementation Process
Attempting to implement too many automation tools at once can overwhelm your system and staff. Instead, financial institutions should adopt a phased approach. Start small, measure the results, and then scale up. This ensures that the organization can handle the transition smoothly and learn from each phase before moving forward when implementing intelligent automation in financial services.
7. Ignoring Compliance and Regulatory Challenges
The financial services sector is highly regulated. Introducing automation without considering regulatory requirements can lead to legal complications. It is essential to work with a legal team to ensure that the automation strategy complies with all relevant laws and industry standards. Additionally, regular compliance audits should be part of the automation process to avoid costly fines or penalties.
The Benefits of Partnering with a Third-Party Systems Integrator
Given the complexity of deploying intelligent automation, many financial institutions find it beneficial to partner with a third-party systems integrator, such as Axis Technical Group. These professionals specialize in implementing and optimizing automation solutions. They bring valuable expertise in managing the transition from legacy systems, addressing data security concerns, and ensuring regulatory compliance.
A third-party integrator can also help institutions navigate the training and upskilling of employees, ensuring a smooth transition to a more automated workforce. They assist in identifying which processes are best suited for automation and developing a long-term strategy for scaling the technology within the organization.
By working with a skilled partner, financial institutions can avoid many of the pitfalls mentioned above and maximize the return on their investment in intelligent automation.
Next Steps
Implementing intelligent automation in financial services presents significant opportunities for improving efficiency, accuracy, and customer service. However, successful implementation requires careful planning and execution. Financial institutions must be mindful of challenges such as legacy systems, data security, and employee training. By avoiding these common pitfalls and partnering with a third-party systems integrator, businesses can fully realize the benefits of intelligent automation and stay competitive in a rapidly evolving landscape.