Automation in Banking
Banking and Automation- the two terms are synonymous to each other in the same way bread is to butter — always clubbed together. We live in a digital age and hence, no institution of the global economy can be immune from automation and the advent of digital means of operations. In fact, banks and financial institutions were among the first adopters of automation considering the humongous benefits that they get from embracing IT. The reason why banks and financial institutions rapidly embraced IT is that their operations when done manually take up a lot of time and effort from their staff as well- making them do routine activities and searches over and over again, and in the process, missing the chance to move up the value chain. Automation enables a standardized audit trail, making sure the right people have access to the right systems and guaranteeing that financial institutions adhere to industry standards, while reducing the need for cost involved in keeping legacy IT systems running.
Automation is fast becoming a strategic business imperative for banks seeking to innovate — whether through internal channels, acquisition or partnership. Implementing integrated automation solutions will enable banks to streamline the very tasks that are holding them back — removing manual intervention and ensuring that simple tasks are handled with speed and agility without error.
The financial industry has seen a sort of technological renaissance in the past couple of years. But this has also lead to a complex scenario where the problem has to be addressed from a global perspective; otherwise there arises the risk of running into an operational and technological chaos.
Some of the advantages of software automation are:
- Process Automation: Working in a more abstract level allows not only the automation of technical process but also the automation of traditional business processes. Decision engines, risk based pricing, default prediction and fraud detection are examples of processes that can be improved under this perspective.
- Semantics: The new way of defining programming languages, based on the concepts that structure them, opens the door to knowledge representation.
- Less technical complexity: Again, the higher level of abstraction of the languages allows to solve, automatically, much of the technical details inherited to the different solutions. This automation of complexity results in quality, safety, standardization and other software features.
- Multi-platform: Having the control of programming languages, the same development can be translated into multiple platforms without having to perform a new project for each new device.
- Business oriented: Once the programming languages are closer to the business, developers can focus on providing a solution from the business point of view and not from a technical perspective. It also breaks down the traditional communication barriers between the development areas and rest of the areas of the company.
Fintech is working on multiple areas in which the automation can provide advantages. We can group them into three main blocks: Business Services, Online Services and Data Management.
Business Services: Meeting customer’s new demands and the productivity improvement are objectives that are moving the industry to act over their more traditional structures. Automation provides advantages on:
- Decentralization: To perform the decentralization of services (call centers, back office…), their applications need to migrate to a web environment. This is a major challenge because the systems must keep the traditional desktop applications features: safety, speed and user-experience.
- Portfolio management: The automation of processes provides a more streamlined management. On the other hand, the semantics allows a unified management of heterogeneous portfolios and the integration of external ones.
- Compliance: Semantics, along with the use of business-oriented languages facilitate audit analysis processes and the deployment of its documents.
- Legacy systems: The higher level of abstraction provides a straight forward way to design interfaces with legacy systems.
Online Services: The emergence of new devices, the improvement of communications and a new digital culture have made institutions open their doors in order to supply a more interactive management to their customers. Again automation provides benefits in this area:
- Accessibility: Multi-platform can multiply the ways of interaction.
- Financial education: Semantics gives the systems documentation and visualization capabilities facilitating its handling and understanding.
- Personal management: As a result of the previous points, the customer can perform a more personal management of their data and assets. As mentioned, the semantics play a major role in the interaction with the customer.
- New Banking: Multi-platform, semantics and process automation enable new business lines such as personalized offers, payment platforms, crypto-currencies, proactive risk analysis and others.
Data management: A more interactive relation with the customer and the new methodologies to process that information have revolutionized traditional CRM techniques and the whole data management. Automation benefits:
- Back office automation: The automation of back office means the automation of its workflows. The possibilities powered by semantic to design “smarter” decision engines, together with process automation, are key lines to achieve this goal.
- Reporting: Semantics is increasing being a part of reporting. XBRL is a good example.
- Security: Process automation enhances the security in data processing.
Automate to Innovate
Automation is fast becoming a strategic business imperative for banks seeking to innovate — whether through internal channels, acquisition or partnership. Implementing integrated automation solutions will enable banks to streamline the very tasks that are holding them back — removing manual intervention and ensuring that simple tasks are handled with speed and agility, without error.
Automation enables a standardized audit trail, making sure the right people have access to the right systems and guaranteeing that financial institutions adhere to industry standards, while reducing the need for cost involved in keeping legacy IT systems running. By bringing everything together and connecting loose ends, automation enables the banking sector to deliver the cost-saving that it needs, while simultaneously delivering value to customers.
How does Hexanika make use of automation in Banking?
Hexanika is a FinTech Big Data software company, which has developed an end to end solution for financial institutions to address data sourcing and reporting challenges for regulatory compliance.
Our software platform streamlines the process of data integration, analytics and reporting by cleaning and joining the sourced data through semantics and machine learning algorithms. It simplifies data governance process and generates timely and accurate reports to be submitted to regulators in the correct formats. Our solutions also significantly reduce the time and resources required for everyday-regulatory processes, and are robust enough to be implemented on existing systems without requiring any specific architectural changes.
To know more about our products and solutions, read: http://hexanika.com/company-profile/
Contributor: Akash Marathe
Until 2014, Prakash Jalihal served as Managing Director and senior vice president of Fidelity Information Services (FIS) for Latin America and the Caribbean and was responsible for the direct management of sales and operations for the company’s business in that region The company now operates in over 30 countries in the region and is rated #1 Financial Technology company by FinTech.
Jalihal began his career with FIS, formerly Alltel Information Services and formerly Systematics in 1972. Prior to his current position, he has held various positions: Programmer/analyst, Systems Development Division manager, Planning and Research manager, Little Rock Processing Center manager, Global Client Operations manager.
Before joining Fidelity Information Services, Jalihal was a production control engineer with International Harvester Company in Bombay, India.
He earned a Bachelor of Science in Mechanical Engineering from the University of Bombay in 1970 and a Master of Science in Industrial Engineering from the University of Arkansas in 1972.
From 1995 through 2001, Mr. Jalihal served on the Global Advisory Board for the Thunderbird School for International Management and is currently on Dean’s Advisory Council for the University of Arkansas Engineering School.
Mr. Jalihal currently serves on the Board of EAST Initiative, a non-profit organization established to promote Environmental and Spatial Technology in schools in Arkansas and surrounding states, based on project based learning. He also serves on the Advisory Board of the non-profit Best Buddies Arkansas.
In 2009, he was inducted into the Arkansas Academy of Computing and in 2011, he was inducted into Arkansas Academy for Industrial Engineers.
In 2014, Mr. Jalihal joined the Global Technology Deployment Initiative as a Senior Advisor. The charter of GTDI is to provide funding and deploy technology in the countries that lack funding and do not have a technology distribution channel.
In 2014, he was also elected as a member of Arkansas Accelerator, an economic development advocacy group that promotes creation of high paying jobs and formation of new companies as part of a knowledge based economy.
Originally published at hexanika.com on April 10, 2016.