Unity Small Finance Bank is pioneering the use of hyperautomation to streamline its operations, improve productivity, and elevate customer experiences. In a competitive financial landscape where the cost- to-income ratio (CIR) can heavily influence profitability, Unity sets a new benchmark by leveraging advanced automation technologies to reduce costs and drive efficiency. This article explores the transformative potential of hyperautomation in banking, the technology and strategies behind it, and Unity’s success in achieving measurable gains.
Peer Comparison: Cost-to-Income Ratios in Banking
In the banking sector, the cost-to-income ratio (CIR) serves as a critical metric for financial efficiency. Traditionally, small finance banks (SFBs) in India report CIRs in the 60-75% range, reflecting high operating expenses compared to revenue. However, with Unity Small Finance Bank implementing hyperautomation, the bank is piloting a 27% cost reduction in targeted areas, directly impacting its CIR. Unity aims to improve CIR further by deploying end-to-end automation in multiple departments, setting an example for all employees aiming to achieve similar operational efficiencies.
Understanding Hyperautomation and Its Potential
Hyperautomation is an approach to business automation that combines robotic process automation (RPA), artificial intelligence (AI), machine learning (ML), and advanced data processing to achieve extensive automation across functions. Unlike traditional automation, hyperautomation creates a system where workflows across various departments are integrated, automated, and optimised. The potential of hyperautomation lies in its ability to handle complex, end-to-end processes, reduce human intervention, and enable data-driven decision-making at scale.
Emerging Technologies Powering Hyperautomation
Hyperautomation relies on a blend of the latest technologies that enable banks to achieve holistic automation. Key components include:
- AI and Machine Learning (ML): These technologies enable predictive analytics, customer personalisation, and intelligent decision-making.
- Robotic Process Automation (RPA): Automates repetitive, rule-based tasks, freeing employees to focus on higher-value work.
- Process Mining and Monitoring: Identifies bottlenecks and optimises workflows based on real-time data.
- Low-Code Platforms and Orchestration: Tools like Microsoft Power Automate facilitate seamless integration of systems, making automation easier and faster to implement.
- OCR/ICR and Intelligent Document Processing: Enhances data extraction from documents, crucial for automating processes like customer onboarding and KYC.
The ROI of Hyperautomation: Methodology and Metrics for Success
Unity Small Finance Bank’s hyperautomation journey follows a three-phase methodology:
1. Imagine: Define high-impact use cases and assess automation potential.
2. Deliver: Implement targeted solutions, beginning with quick wins for immediate cost savings.
3. Run: Scale automation across operations, continuously optimising and integrating new AI tools.
Key metrics to gauge the success of hyperautomation include:
- Operational Cost Reduction: 27% cost reduction in targeted processes.
- Efficiency Gains: Faster processing times and reduced error rates.
- FTE Reduction: Fewer full-time equivalents needed, allowing resources to be reallocated to higher-value tasks.
- Customer Satisfaction Scores: Enhanced service speed and quality improve customer experiences.
Top Value Use Cases for Hyperautomation in Banking Operations
Unity Small Finance Bank has strategically targeted high-impact areas for automation, including:
- Customer Onboarding and KYC: Hyperautomation streamlines the onboarding process with OCR/ICR for document verification, AI for fraud detection, and BPM tools for seamless customer journey management.
- Loan Processing and Underwriting: Automates application review, eligibility checks, and underwriting, reducing processing time and improving loan turnaround.
- Fraud Detection and Risk Management: AI and ML analyse transactions and flag suspicious activities, improving security without adding to manpower costs.
- Regulatory Compliance Automation: Simplifies compliance reporting and audits by automating data collection, tracking, and reporting.
- Core Banking Operations: Integrates and automates core banking functions to provide 24x7x365 availability for customers and employees.
- Customer Service and Support: Chatbots and intelligent assistants handle routine inquiries, while escalated issues are directed to human agents, ensuring 24/7 service.
- HR and Payroll Automation: Automates payroll processing, employee data management, and onboarding, freeing HR teams to focus on strategic functions.
- Back-Office Automation: Processes across finance, procurement, IT, and shared services are automated to reduce costs and improve productivity.
Key Phases of Hyperautomation: From Quick Wins to Full-Scale Transformation
Unity’s approach to hyperautomation begins with Quick Wins—identifying processes with immediate automation potential for rapid ROI. Next comes Process Optimisation in which repetitive and complex workflows are streamlined for maximum efficiency. Finally, Full-Scale Transformation enables the bank to connect every department and continuously integrate AI for ongoing improvements.
With each phase, Unity emphasises Employee Upskilling to help its workforce leverage
new tools and maintain digital agility. This commitment to upskilling not only empowers employees but also fosters a more resilient, adaptable organisation.
Key Tools and Partnerships
- RPA Tools: Microsoft Power Automate, Automation Anywhere, UiPath for automating routine tasks.
- OCR/ICR for Document Processing: Allows accurate extraction of information from customer documents.
- Process Monitoring and BPM Tools: Streamline workflows and enable process tracking.
- AI and Machine Learning: Drive insights, predict trends, and assist in decision-making.
- Cloud Infrastructure: Offers scalability and security, supporting seamless operation.
Conclusion: Transforming Service and Productivity Through Hyperautomation
By embracing hyperautomation, Unity Small Finance Bank is not only reducing costs but also enhancing productivity, customer satisfaction, and employee engagement. The bank’s phased approach, with an emphasis on ROI and continuous optimisation, positions it as a leader in digital transformation within the banking sector. As Unity scales up its automation, it demonstrates that by combining technology with human expertise, banks can achieve unparalleled operational efficiency, empowering both their customers and employees in today’s competitive financial landscape.
Views expressed by Santanu, Nalini Kumar, Head Digital Hub, Unity Small Finance Bank
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