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Banks turning to orchestration for automation

Automation in banking is something of a match made in heaven. Aside from the fact it is a sector that processes billions of transactions daily and therefore has a phenomenal amount of process to automate, it also happens to be perhaps the most regulated sector on the planet.

According to reports, some institutions are now spending as much as 10% of their operating costs on compliance-related functions. Rising operating expenses, compounded by fines along with increasing regulatory requirements have acted as a drag on performance and impacted on customer experiences as well as the bottom line. For example, earlier this month it was announced that Danske Bank, the largest bank in Denmark and a former Fortune Global 500 member, is facing a fine of 10 million Danish kroner for General Data Protection Regulation (GDPR) violations pertaining to data storage.

All of which, combined with the recent pace of change to digital banking on account of the pandemic means banks are now turning to orchestration for automation.

Right tool for the right job

The size of the automation market within banking is staggering. Globally, the RPA market size was valued at $1.57 billion last year, and is expected to grow by nearly a third over the next seven years, data from Grand View Research shows. Companies that provide banking, financial and insurance services make up the dominant share of users of this technology, accounting for almost a third of the market share just a couple of years ago. 

This is because everything from data entry to loan form processing is done by machines using basic algorithms. RPA enables banks to save money, reduce human error, and speed up procedures. In addition, it also helps financial organisations improve compliance and auditing by having all data in one location. 

Essentially, it has organically evolved to such an extent and is now a business-critical function so banks must critique if they have the right tool for the right job. For example, how to more effectively manage handoffs between man and machine, and where typical process redesign/reengineering can be put off or even skipped in favour of automation, particularly where systems are likely to be replaced. 

The good, the bad, and the ugly

Put simply, not all automation is equal. There is no one-size-fits-all approach and, like anything, it can deliver the good, the bad, and the ugly. Also, poorly selected or programmed automation can create more problems than it solves. This piece in the New Statesman is a good read on the potential impacts when things are not done correctly.

If you look at any bank, at any given time, automation will be in place; Anti-Money laundering investigation processes, onboarding and Know Your Customer, loan and credit card applications, security and identification and more.  All of these critical elements of banking require automation in their own right, but they also need to be orchestrated to talk to each other appropriately. This is a good piece from Lloyds Banking Group on how it uses automation throughout its operations.

Delivering direct debits of a major UK bank

We work with one of the UK’s major banks and were brought in to deal with this specific issue. Historically it has used Pega to orchestrate its processes and, while this has been effective to a degree, the hard-coded nature of the platform means it has limitations for many of the nimble processes that require automation.

As a result, we were brought on board to orchestrate its monthly direct debit processes because of Enate's speed to value and citizen development approach. Many of the direct debit processes happen on the first of every month. Members of staff were having to work through the night to process these payments, and there simply weren't enough hours to get this time-limited task done. Using Enate, the bank has not only orchestrated this process to deal with exceptions (rather than the entire process) but it sits on all devices and can be accessed by members of the team irrespective of time or location. It means the direct debit process is done in the required timeframe and members of staff are getting a good night's sleep while it does.

Not an either/or choice

As this example demonstrates, it’s not an either/or choice for banks to make. The point is, just because it’s there now - either through legacy, apathy, or purely contractual terms - doesn't necessarily make the software in place the best tool for the job. The world today is totally different to what it was two, three or four years ago when the initial foray into automation may have happened so banks should be asking themselves - can we do this process better, cheaper, quicker and more effectively in line with the other automated elements in the business. 

The answer may well be ‘no, we can’t’. But at least it has gone through the process of validation through the lens of the new and latest tools on the market. Having said that, chances are, there will be improvements that can be made.

And that’s what we’re here for. If you have any process, no matter how small, that isn’t working as well as you think it should be, we can help. Not only in improving it but also in highlighting how using Enate can positively impact elsewhere in your institution. That’s something you can bank on.