Why is process automation important in finance?
The finance industry is slowly being democratised, with competitive pressure emerging from a range of sources. Whether it’s crypto currencies or buy-now-pay-later (BNPL), new entrants with new products are surfacing everywhere and they tend to have a fraction of the regulatory and legacy (technology and process) burdens that industry veterans do. Technology, and specifically automation, is at the heart of their value propositions.
User experience expectations are high and a stop/start, paper-based, manual process just doesn’t cut it. The financial services industry has a phenomenally low loyalty rate, so giving consumers the experiences they want is and should be part of most strategic agendas.
The need for good process automation strategies
However, the real race that most people don’t see being run, is that of compliance. There’s nothing like a Royal Commission to draw attention to the absence of good process automation strategies. There are significant obligations being imposed on financial organisations, whether it's lending, deposits, or markets. The obligations are cumbersome, expensive and do not have a direct line to revenue. Ouch.
Throughout 2019 and 2020 a number of financial institutions invested heavily in employing process automation to support regulatory compliance, recognising that the need was only going to get more onerous over time, and the only way to sustain it is with efficiency of process and reliability of data – two things at the core to any compliance program.
Additionally, for decades finance organisations have relied upon manual assessment of risk. Regardless of whether it is fraud risk, collection risk, credit risk, or claims risk, these functions work off an approved way of measuring and accepting risk and in the past have had little to no process automation to support them.
The issues with the current approach to QA and compliance
Take the good old contact centre as an example. A typical ratio of Quality Assurance Agents in a contact centre is 1:20 – one QA agent for every 20 contact centre agents. The primary role of a QA agent – listen to calls, usually a random subset of calls, ensuring scripts and guidelines are followed. Scoring each call and escalating for remediation or agent training where something falls outside of tolerance.
A common responsibility for a QA agent in financial services is to detect any evidence of advice being provided to a consumer, where that agent or organisation is not authorised to do so. Big reputational and financial consequences apply where this occurs and become even worse if left unchecked for too long. Picture a scenario where a customer is provided with incorrect information or poor advice from the credit card sales agent, leading to a debt that the customer could never really afford. Terrible, right?
Can organisations really afford to have dozens or more QA agents in a room doing nothing but retrospective (i.e. it’s too late to prevent an issue) and subjective (QA agents make mistakes too) assessment of risk? Sure, you can throw people at the problem if scale is a concern, but that doesn’t guarantee the integrity of the result.
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How can process automation be used in QA?
Phone calls can obviously be transcribed now faster than ever before using very accurate speech to text technology. Then, performing automated analysis of transcriptions using AI models or decisioning platforms like Decisions with fast and flexible integration and decisioning capabilities, organisations can build in extremely fast and accurate identification of keywords or phrases that might imply something has been stated incorrectly or if advice has been provided where it should not have been.
Imagine if the sales agent could immediately get notified in real-time that they're on the verge of providing advice due to certain words or phrases being used, where seconds after an agent has started to lean towards providing advice there could be a little warning popping up on their screen, in real-time, to either correct what they’ve just said to the customer or change the course of the conversation altogether. The point is, sometimes we need to stop iterating and instead pause to rethink our approach altogether using modern means.
The role of process automation in compliance
Automation for the purposes of enhancing user experience for a competitive edge is a commonly held strategy. However, for the compliance battlefront, recognising that prevention, as a first line of defence, goes beyond merely training employees and can instead be about rapid, intelligent detection, can put consumers in a much better position, empower and protect employees, and provide new heights of assurance for the modern financial services organisation looking to leverage the benefits of process automation.
At Digital Experience Labs, we are experts when it comes to process automation and have in-depth experience in the finance sector. As specialists in no-code and low-code automation and digital transformation we’re also the lead partner of the powerful rules and workflow automation platform, Decisions. Throughout Australia and New Zealand we’ve helped financial organisations define their process automation goals and are here to help you do the same for your business too.
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