United States

The growing influence of automation in financial services companies


For many companies, automation can be a scary term, summoning ideas of robots similar to those seen in movies. However, automation initiatives for financial institutions most often involve leveraging a computer application to perform tasks that otherwise require manual efforts. Automation projects can have a positive effect on efficiency, and risk and regulatory processes, and can start with platforms that institutions typically already have and use every day.

Automation can take very simplistic forms. For instance, Microsoft Excel is often an initial step into automation, utilizing macros that record keystrokes. A more advanced process within Excel involves using Visual Basic tools to further automate tasks and gain more insight into data.

The key to automation is finding non-value-added tasks that are performed in a repetitive way that a computer program can learn to do. For example, financial firms historically work heavily within spreadsheets, with some institutions manually cutting and pasting performance data or records from singular files into a master document. This is a process that is ripe for automation, with potential solutions that already exist.

Automation becomes even more beneficial for financial services companies when it goes beyond applications such as Excel spreadsheets and into more critical business functions. For example, today’s banking environment includes many restrictions about with whom banks can do business. One manual process that takes place at many institutions involves employees visiting government websites, downloading files and determining if doing business with specific people or organizations is prohibited or may require additional reporting.

However, many organizations may not know that the Powershell application within the Windows operating system can automate these and other routine tasks. In addition, the Windows Scheduler application can be used in conjunction with Powershell to create automated processes that download files and automatically import necessary information at a scheduled time, as long as the computer is on and connected to the internet. This operation uses only free tools and can potentially save weeks of employee time per year.

From a risk management and a regulatory perspective, automation can help alleviate several challenges related to physical contracts and documentation. There is a lot of paper within many institutions, and optical character recognition (OCR) software can scan documents and significantly support both internal and external contract reviews.  

Instead of only reviewing a random sample of contracts, an institution can scan each document and utilize the OCR application to search for specific required terms or phrases. An audit can then focus on those documents that did not include the necessary information, increasing efficiency and reducing risk.

A similar process can be implemented within an institution’s call centers by integrating speech-to-text technology that mines calls for certain information. This can be particularly effective to uncover fraud characteristics when a criminal is trying to obtain an account holder’s password or banking information. The software can flag situations where someone calls repeatedly to gather information, escalate those cases and enable a more effective response to those risks.

In addition, automation can help institutions better manage anti-money laundering (AML) regulatory demands. Organizations are required to have certain systems in place, but from an audit perspective, those systems must identify specific practices in an independent analysis. Those necessary AML processes can be automated to identify any suspicious behavior and significantly reduce manual efforts and potentially harmful errors.

Ultimately, many of the processes today’s institutions must adhere to are better served with the visualization that automation can provide, instead of traditional rows and columns. For instance, institutions must serve the entire community, and not just select areas. Automation can take census data and show bank activity and applications that are approved and denied compared to area income levels. This helps to ensure that institutions remain in compliance and continue to provide service to all people.

Instead of manually reviewing several spreadsheets, a compliance manager can simply view a dashboard to closely monitor such risks. Leveraging technology to view relevant information with an on-demand map creates a better understanding of key data and helps to identify issues that could otherwise be lost in volumes of raw data.

A scenario where people will completely disappear within financial services organizations is not likely, but computers and software applications will become even more important. Institutions should participate in conferences and consume collateral to understand opportunities and how other organizations leverage automation. Even strategies from other industries can have some characteristics that can spark ideas for financial institutions.         

Automation should not be intimidating for financial services companies, as the opportunities for greater efficiency and regulatory compliance are vast. Improvement can start quickly by identifying repetitive tasks and utilizing tools that are readily available and very cost-effective. The biggest opportunity for many organizations is using their own creativity to leverage automation to solve their problems.