Automation is steadily becoming the backbone of business growth as our world dives into the digital-first paradigm. This has been more prominent in India where industries are strongly pursuing innovation – automation has proven to be a critical driver for success time and again.
According to Deloitte’s latest projections, the automation industry is set to surpass $25 billion in value by 2027 with a compound annual growth rate (CAGR) of over 40% – indicative that this isn’t a short-term trend.
But what does it really mean for the BFSI (Banking, Financial Services, and Insurance) sector? Well, we are no longer looking at automating a few mundane tasks to save time. The game has changed, with the new focus on end-to-end automation frameworks – solutions that aren’t just piecemeal fixes but strategic transformations.
These frameworks are now essential for streamlining operations and enhancing customer experiences while offering organizations the competitive edge they desire to thrive. The impact is already visible when we look at the modern banking landscape – from speeding up core functions such as trade finance to AI-powered chatbots revolutionizing customer service, it’s an all-around transformation.
The drivers of change
- Riding the automation wave: So, what’s next in the future of automation in BFSI? – Integration. We’re evolving beyond individual tools into a cohesive, interconnected fabric of technologies – Artificial Intelligence (AI), Internet of Things (IoT), low-code platforms – all are coming together to drive business excellence. This level of automation isn’t limited to simply tweaking processes, but it actually reimagines how banks and financial institutions operate, turning them into agile, future-proof entities.
- Game-changing predictive analytics: This has to be the most transformative innovation happening in the BFSI domain. With gargantuan historical data in the hands of financial institutions, it holds immense potential, waiting to be tapped. Powered by machine learning, predictive analytics allows organizations to anticipate customer needs, identify behavioural patterns, and even flag potential fraud before it occurs. Predictive analytics has transitioned beyond data crunching – it’s about offering personalized, secure, and smart financial services. With automation, this becomes scalable and efficient.
- Robot Process Automation powering digital transformation: This might not sound as fancy as AI, but it’s a key driver of digital transformation in banking. RPA is responsible for automating repetitive, rule-based tasks that are critical but can be time-consuming and mundane – think loan processing, KYC checks, and regulatory reporting, among others. Forrester’s report projects the RPA market to reach $22 billion by 2025, underscoring its growing importance, since it’s helping BFSI organizations cut costs, reduce errors, and free human resources to focus on higher-value activities, making work smarter.
Why BFSI needs automation?
It’s not surprising to see how automation flits like a glove within BFSI. The sector is built atop complex and high-volume operations that demand precision and efficiency. Automation is capable of bringing a level of consistency that manual processes simply cannot deliver by processing millions of transactions, ensuring compliance with ever-evolving regulations, or any other task that comes to mind.
With automation, institutions can overcome ever-growing compliance demands by constantly monitoring transactions alongside producing real-time reports for audits. This not only cuts the risk of penalties but also establishes strong governance and transparency, which is integral for maintaining trust with regulators as well as customers.
Lastly, automation also brings with it substantial cost savings and operational efficiencies, allowing BFSI to gradually scale its processes without spiking overhead costs. Automated data collection and analysis enables organizations to derive real-time insights, significantly improving decision-making and sharpening their competitive edge.
Elevating customer experience with automation
BSFI Customers today have more evolved expectations where they want instant service, experiences that are personalized and crafted specifically for them, and 24×7 availability, among several others that are slowly but steadily becoming the norm. Automation is proving to be a formidable force in helping institutions meet these expectations.
AI-powered chatbots, for instance, take care of routine inquiries, freeing up time in the hands of human agents to focus on more complex and demanding cases. Automation also offers personalized financial services at scale, based on customer data, recommending tailored products and services, which helps in deepening customer loyalty and satisfaction.
Common BFSI processes, such as account opening or loan applications – which traditionally involved a lot of paperwork – have now been streamlined by automation, with digital onboarding and e-KYC processes enabling access to customers in a matter of minutes.
It also helps in delivering proactive support in identifying issues such as overdrafts or missed payments before they occur, alongside timely solutions. With real-time monitoring of the transactions, security is further fortified, allowing financial institutions to instantly detect and respond to fraudulent activity, thereby forging trust with customers.
Ready, set, automate
In today’s BFSI sector, automation has evolved from being a nice-to-have to ‘mission critical’. The upcoming banking and financial services will sit over the AI-driven automation, delivering efficiency gains that simply cannot be ignored. It’s moved beyond the need to improve processes – it’s now about changing the way business is conducted.
Also Read | The Future of Customer Service: Leveraging AI and Automation
Institutions that embrace end-to-end automation have strongly positioned themselves for long-term growth and adaptability. The question is no longer, “Should we automate? But instead, “How quickly should we automate?”, because, in the BFSI world of tomorrow, ones that don’t act today might find themselves left really far behind.
Views expressed by Deepak Visweswaraiah, Vice President, Platform Engineering, and Site Managing Director, Pegasystems, India
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