Tag: center of excellence

Seven high-impact automation targets for financial institutions | Bank Automation News

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It’s 2023, and technologies like machine learning, robotic process automation, natural language processing and artificial intelligence are fast becoming ubiquitous in both customer-facing and back-office digital infrastructure, bringing financial institutions a wealth of opportunities to leverage automation across the business.

Bucky Porter, financial services industry analyst, Windstream Enterprise

As these technologies and the automation capabilities embedded within them evolve and mature, it’s up to institutions and their IT decision-makers to identify areas of the business where these capabilities can deliver the most bang for the buck in terms of impact on customers, employees and the bottom line. Based on my work supporting financial services organizations in their digital transformation initiatives (with an emphasis on network connectivity, communications and security), here’s a look at seven of the most impactful ways institutions can tap into the power of digital automation in 2023 and beyond:

Enriching the customer journey

Automation across the communications channels that institutions and customers use to interact with one another is critical to providing the rich, disruption-free experiences that customers today expect. Using AI and ML technology along with advanced analytics tools, institutions can develop a full understanding of a customer’s (and a household’s) preferences, then tailor their journey with automated, hyper-personalized offers and recommendations, human-like automated chat/virtual agent interactions and the like. Many of these tools and capabilities can be found in the current generation of unified communications as a service (UCaaS) and contact center as a service (CCaaS) platforms.

The mortgage line of business is one area that’s especially ripe for automation, given the bottlenecks that continue to plague processing and the customer journey. Building more workload automation into the mortgage process, from application to booking, can minimize human interaction and human error, shrink approval times, simplify compliance with reporting requirements, move pipelines along faster, and ultimately translate into the kind of elevated customer experience that gives an institution a clear competitive edge.

Securing network as well as data, apps and users attached to it

First, the bad news: In 2022, according to fresh data from Contrast Security, 60% of financial institutions were victimized by destructive cyberattacks, 64% saw an increase in application attacks, 50% experienced attacks against their APIs, 48% experienced an increase in wire transfer fraud and 50% detected campaigns to steal non-public market information.

The good news is new multi-layered cybersecurity strategies like secure access service edge (SASE) and security service edge (SSE) use automation to thwart ransomware attacks and other types of attacks that pose a threat to banks. SASE and SSE can be deployed in tandem with a software-defined wide-area network (SD-WAN), and typically employ firewall as a service, secure web gateways , zero trust network access and cloud access security brokers, with a portal to manage and automate deployment of these elements. These comprehensive security frameworks can also be architected to have automated intelligent resiliency, ensuring service continuity without human intervention. The result is a unified framework to intercept, inspect, secure and optimize all traffic across a network that includes multiple branches.

Simplifying network management

Not only does SD-WAN provide institutions with access to advanced security strategies like SASE and SSE, but it also comes with automations that make the task of managing a network across multiple branches simpler and much less time consuming. It does so by automating tasks traditionally set manually. For example, an SD-WAN can automatically detect network conditions and provide dynamic path steering and forward error correction to ensure high-priority apps get the performance they need. Via a single network interface, many of the moving parts of the network can be centrally managed with automated capabilities, including prioritization of network traffic to optimize bandwidth, which increases reliability and app performance while maximizing network capacity at a lower cost. Benefits like these explain why a November 2022 study found that more than 95% of enterprises already have deployed an SD-WAN or plan to within the next 24 months, and why, anecdotally, I’ve seen so many financial institutions shift to SD-WAN recently.

Improving employee productivity

In the years I spent working as a bank executive, I can recall myself and other managers spending hours on duplicative manual data entry and document-shuffling — time that would have been much better spent on higher-value pursuits. Automating workloads and processes unburdens employees of monotonous, unnecessary busy work.

A financial institution also can impact employee productivity with how it manages the bandwidth across its communications network. With an SD-WAN, for example, an institution can use automation to enforce policies that allocate less bandwidth (or restrict access) to apps that can distract people from their work (personal social media, etc.).

Strengthening the employee experience

Automations also are proving their value on the HR side of the business, for example, where institutions are using portals through which employees, enabled by automation, can access self-service capabilities to manage their benefits, as well as to access training, upskilling and other resources.

Uncovering cross-selling and other opportunities

By automatically capturing and applying analytics to data from customer interactions and transactions, institutions can quickly identify opportunities to market highly targeted additional products and services to existing clients, while also developing personas that help them zero in on the right prospects. Then they can reach out and/or deliver highly personalized offers.

Sharing insight across open banking ecosystems

Open banking allows for customers to connect their various accounts and control the sharing of their financial data through APIs that interface with other financial institutions and fintech companies. Automations can ensure that data and insight is securely shared among the various partners within an open banking ecosystem, a must to provide a seamless experience for customers across the various apps they’re using within the ecosystem.

Bucky Porter is a financial services industry analyst at cloud-enabled connectivity and communications provider Windstream Enterprise.

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March 20, 2023
3 keys to successful fintech-bank collaboration, CX | Bank Automation News

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LONDON – Banks continue to grapple with idea of buy vs. build, but partnerships with fintechs allow the entities teach each other about innovation and customer experience. “Banks can learn from fintechs how to be agile, innovative and customer-focused, while we offer them a big installed base and learnings on how banking [and regulation] works,” […]

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Neil Ainger

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March 16, 2023
Measure Twice, Cut Once: Quantifying the Value of Automation Programs | Bank Automation News
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The old carpentry saying “measure twice, cut once” is a reminder to make doubly sure that you know exactly what size you need from your lumber before you take out your saw. It aims to keep you from making mistakes, from cutting pieces that don’t fit properly, and ultimately, from wasting time and money. You can apply this advice to your automation programs, but instead of measuring lumber, you’ll measure the value they create.

Many automation programs deliver meaningful returns on investment but it’s easy to miss the opportunity to properly measure these returns. Many programs begin with the basic understanding that the outcomes will be beneficial, but they fall short of trying to quantify these benefits. Why is it important to think about the value a program of automation will create? There are several reasons:
- If you don’t define what you set out to achieve, how will you know you’ve achieved it? If you had no targets in mind, you’ll have a hard time claiming you’ve met them.
- Without setting measurable targets you will very likely spend a lot of time making changes to what you have delivered, since you aren’t able to declare you’ve met your objectives.
- How will you know you’ve solved the right problem if you don’t have a vision for the impact your automation program will create? Without trying to plan a set of measurable goals you may end up building solutions that are different than what they replace but do not provide a measurable benefit.
- Finally, doesn’t it make sense to focus your efforts on delivering the most value first? How can you design an automation program that front-loads value delivery if you haven’t tried to estimate the potential value of your solutions?
Understanding how your automation program will deliver value, and setting goals before you begin work is not only a smart way to work efficiently and with impact, but also a great way to demonstrate success to your sponsors.

So what can you do to begin quantifying the value of your program? Here are a few easy steps:
- Decide which metric(s) you will use to define the value of your solution. Common metrics are time and money, but you can use any factor that you can measure.
- Collect the baseline metrics that exist today. For example, how much time or money does a business process take to complete?
- Establish targets for your metrics. Do you want to spend 50% less time completing a unit of work? Will you aim for a lower-cost process?
- Figure out how you will measure these values after you have built your solution.
- Measure the results, compare to your target objectives, and iterate as required.
A great way to get a head start on measuring your as-is and afterward metrics is to use a platform like Appian to automate your business. Appian not only lets you build and automate complex workflows faster, it includes a process mining capability that will help you to quantify how your processes behave.

Using the Appian process mining tool you can discover exactly how a business process works today and in the future. It can make value measuring easy, helping you to measure twice and cut once.
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March 1, 2023
Transparency for Transformation Initiatives | Bank Automation News

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Transformation initiatives often seek to provide greater efficiency through process optimization and cost reduction or to elevate the customer experience and drive growth. Sometimes they accomplish both. In either case it’s important to consider the need for transparency in newly deployed systems and processes. Optimization efforts that lack transparency can fall short of delivering on their promise.

Transparency can support several important goals and objectives. It can provide visibility into the status of work, answering common questions for multiple participants in a process. To start, the team that is performing the work benefits greatly from transparency. Providing clear and timely information about tasks and their status keeps them informed of critical blockers and dependencies they can work to resolve. Visibility into pending and incoming work items can help ensure that tasks are being actioned, and that SLA’s are being met.

For management this transparency provides important insights into how well a team performs and allows them to act with impact when they see key performance indicators begin to dip. Line managers need insight into the work their team is doing in order to keep driving better results. Providing visibility into operational processes and how they are performing allows a manager to step in and assist where needed and can give them the confidence that the work within their remit is being conducted quickly and efficiently.

Finally, customers who are kept informed can experience greater satisfaction and confidence that their needs are being met, and this transparency can prevent the noisy follow-up questions that simply ask for a status update. It is not uncommon for a customer (whether internal or external to your organization) to wonder if their needs are being actively pursued. Providing real-time visibility into the status of their requests can provide them with a measure of satisfaction that enhances their relationship.

Building transparency into your transformation projects can support both efficiency and customer experience goals. Teams will work more efficiently, and customers will be more satisfied. Delivering transparency can be made easy by choosing a platform like Appian that makes it easy to present timely data to the right audiences in a format that is simple to understand. The Appian platform combines powerful data fabric capabilities with the power of low-code and is a great way to transform your operations while realizing the value of transparency.

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February 22, 2023
Why the most essential element of digital banking is human | Bank Automation News

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Although it may seem counterintuitive, as financial institutions push further into the digital realm, the human element of banking is all the more important.

Chris Tremont, chief digital officer, Grasshopper Bank

Digital is becoming the go-to method for managing finances; in fact, 79% of consumers use their mobile device at least once a month to manage their bank account, according to research from the American Bankers Association. So, it is important for FIs to not overlook the human aspect of the profession when planning for digital expansion. While we may not immediately think of digital banking as human and personal, human relationships are irreplaceable when it comes to creating a superior customer experience. What’s more, human guidance remains critical for ensuring banks get the most out of the technology they use.

Digital-native FIs and those that are expanding their digital offering need not sacrifice the human relationships and decision-making that are at the heart of successful banking to make technological progress. In fact, the institutions that prioritize unifying technological advancement with human connections and intelligence will create personalized customer experiences that separate themselves from the pack and benefit all parties. There are several areas where FIs that are making a digital push should consider the importance of human skillsets.

Hiring the right talent

What’s perhaps most critical to tying together human expertise and digital innovation is ensuring that the right team is in place within the financial institution. Importantly, financial institutions making a digital push should not restrict hiring to those within the banking industry; new, valuable insights and ways of thinking can come from many different sources beyond bankers.

Assembling the right team is the crucial first step, and from there, the group can go about finding and implementing the right technology stack that improves the customer experience and automates much of the day-to-day banking operations. Freed from the daily tasks that would otherwise use up large amounts of time and energy, a skilled team can focus both on the customer experience and the factors that have a direct impact on the FI’s bottom line, such as unit economics and exploring how to reduce costs while increasing revenue. In this way, tech and talent form a combination that has benefits for customers and the overall business health of the financial institution.

Customer experience

Building a strong customer experience underpinned by human relationships creates a number of benefits for financial institutions and customers alike. For any digital product to be truly successful, there needs to be a team of specialists and other resources available to make the process run smoothly to the benefit of the client. Having trained industry experts on staff to advise businesses on loans, real estate purchases, and other important decisions can create an environment where customers feel their FI is acting more as a guide than a salesperson.

Personalized customer experiences should resonate throughout the banking journey through a mix of digital tools and inclusive, human support. In addition to having professionals on staff to support the long-term financial well-being of customers, digital programs like banking-as-a-service (BaaS) and virtual cards can help businesses manage and generate revenue.

As financial institutions become less likely to interact face to face with customers, creating a customer experience that blends digital with human is imperative. Using automated chatbots as a first line of customer support can help remove the burden of answering FAQs and performing simple tasks. According to research from Userlike, more than half of customers are willing to talk to a chatbot initially in order to be transferred to an agent. This means that using chatbots to answer basic questions and ensure customers are connected with the right support staff that can offer guidance can be a successful strategy. Furthermore, chatbots reduce the amount of work agents have to take on, allowing them to more efficiently help customers: at Radius Bank, we saw chatbots reduce chats sent to a live agent by 20%.

As research from Insider Intelligence shows that only 42% of consumers trust their financial institution to provide them with banking services — a 6% drop from 2021 and lower than the percentage of consumers that trust PayPal to provide those services — having a team of professionals available to assist customers supplanted by automated solutions can forge a mutually beneficial partnership, where the customer trusts that their FI has their best financial interests in mind.

Personalized tech requires human guidance

The human element of digital banking extends beyond having a team of professionals ready and able to assist customers. Personalized technology requires human decision making to be most effective. The use of data in banking has exploded: research from Alkami shows that 86% of banks and credit unions are using data to drive better customer experience. However, using customer data to create a personalized experience still requires human guidance. Technology can sift through and analyze data to provide automated recommendations, but having humans advise customers on which banking solutions best fit their needs creates an added layer of trust. For example, institutions that serve small businesses can use digital integrations to gain a clearer view of these customers’ financial outlooks and combine that data with industry expertise to produce clear recommendations that benefit the business.

Data can be used for more than just cross-sell opportunities, though. Other important use cases include reducing fraud and keeping clients’ finances and personal information safe in the digital world. Here, too, human guidance works hand in hand with technology to create superior results for financial institutions and customers alike: automated programs sift through mountains of data to produce alerts regarding possible fraudulent behavior and security risks, so that human security professionals can respond accordingly.

Hyperpersonalized banking technology also yields broad insights into customer patterns and behaviors as well as the trends driving the markets. In this instance, the human element becomes critical for driving a financial institution’s business plan and path forward. Through human analysis of the data they collect, financial institutions can determine the risks and rewards of different strategies and reach decisions that meet their business goals while satisfying customer needs.

A virtuous cycle

Blending innovative technology and human relationship management creates a virtuous cycle for financial institutions and customers, where FIs can drive revenue and deposits as customers’ financial needs are satisfied with personalized solutions. This strategy not only wins business, but also establishes meaningful connections that develop into loyal relationships.

Going all-in on digital banking doesn’t mean sacrificing the human element that’s long been central to success in the industry. On both the customer experience and business operations fronts, the institutions that meld innovative, personalized technology with human expertise will emerge as leaders and create solutions that will power the future of banking.

Chris Tremont is the chief digital officer at Grasshopper Bank. He will join the panel discussion “Automation and the pursuit of efficiency: A frank discussion on cost/benefit” at the Bank Automation Summit U.S. 2023 on March 2. Learn more about Bank Automation Summit U.S. 2023 and register here.

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February 3, 2023
How to bridge the banking and wealth management gap with modern technology | Bank Automation News

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People across the country are paying closer attention to their finances as predictions for an upcoming recession persist. This economic uncertainty, coupled with lingering financial impacts from the pandemic and rising inflation, have made many uneasy about their financial fitness.

Jennifer Valdez, president of the Americas, intelliflo

In fact, according to a recent intelliflo survey, conducted by The Harris Poll, less than half of Americans (48%) say they are comfortable with their current financial situation given the state of the U.S. economy.

Many Americans have established banking relationships that can help them with financial planning. After all, banks are best positioned to have access to deep customer data that can help identify key indicators warranting a wealth management discussion. For example, they have access to see when a customer opens new accounts, when someone maintains a high cash balance and frequent deposits, or when a younger individual starts accruing more wealth that simply sits in a low yield account.

However, these insights are meaningless unless the technology infrastructure and required data integration are in place to properly serve customers throughout the financial advisory lifecycle. Because so many financial institutions lack budget or the resources to deliver robust support, Americans are increasingly turning to nontraditional sources, like social media or fintechs, to meet their wealth management needs. This is a missed opportunity for both banks and customers: banks miss out on deeper relationships and additional revenue streams while customers miss out on personal service from an institution that already knows them.

To fill the gap and seize this opportunity, more advisors are looking to technology to help them efficiently offer comprehensive advisory services. The challenge is that the industry has traditionally been fraught with fragmentation, filled with a collection of bespoke software from multiple vendors with limited integration, which often leads to a disjointed, inefficient customer experience. However, recently more institutions have started looking for a single platform approach, one that relies on the cloud and open APIs to facilitate seamless integrations with third parties of choice and complement and support the front, middle and back office.

Streamlining the customer experience

An all-in-one solution that provides a consistent, uninterrupted user journey will be a main priority as banks try to deliver advice in a way that is efficient, provides value to the customer, and will ultimately be profitable. However, building this type of infrastructure in house is extremely costly and time consuming; in response, many are looking to strategic technology partners that can offer this type of modern, end-to-end platform delivering on the promise of an elegant user experience.

Such technology also must meet the customer where they want to be met by providing a hybrid advice model, a strategic mix of human and digital elements that automate more surface-level interactions, enhancing efficiencies and freeing advisor time to grow their customer base. Offering self-service digital options can effectively engage customers who are often near the beginning of the financial advice cycle in a way that’s simple and doesn’t require additional resources in branch. This could be as simple yet engaging as providing a calculator embedded into a bank’s mobile app that helps users compute their financial fitness score. Or maybe it’s presenting straightforward options for investing a nominal sum of money, then adding reporting to help monitor performance. Such tools boost efficiencies and save advisor time for more high-touch, complex interactions.

There is a massive opportunity for institutions to deepen their relationships with customers and positively contribute to the bottom line through comprehensive financial advisory services. However, to do so effectively requires the right technology stack and a hybrid advice model that strategically leverages automation. Those that embrace the challenge will be well positioned to generate revenue, help customers improve their financial wellness and widen access to financial advice, a mission that has never been so critical.

Jennifer Valdez is president of the Americas for intelliflo, a leading cloud-based technology platform for financial advisors.

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January 26, 2023
Listen: How banks can use ChatGPT to improve financial literacy | Bank Automation News

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Banks are looking to use AI to improve their financial literacy following Microsoft’s $10 billion investment in OpenAI and their ChatGPT technology. ChatGPT technology is “a forerunner and a new class of artificial intelligence that’s basically composing written dialogues and could lead to endless possibilities for banks,” Joe Robinson, chief executive, and co-founder at customer […]

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Brian Stone

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January 24, 2023
US Bank validates innovation efforts at CES | Bank Automation News

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U.S. Bank executives attend the Consumer Electronics Show to discover new technology that could have applications within the financial services industry – tech the bank’s innovation teams should pursue. Last week at the consumer technology event Las Vegas, U.S. Bank Chief Innovation Officer Don Relyea and Head of Applied Foresights Todder Moning explored metaverse technologies, […]

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Whitney McDonald

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January 11, 2023
Google Cloud predicts 4 trends driving change for financial services in 2023 | Bank Automation News

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This year the financial industry is in for big changes.

Financial institutions that successfully expanded digital versions of their products and services to deal with COVID-19 are figuring out ways to bring value-added personal touches to online finance.

Zac Maufe, head of financial service solutions, Google Cloud

New fintechs launched products, seeking growth over profitability, a strategy almost certain to change. And regulators are extending new controls over a range of functions and jurisdictions. All of this is happening during a time of technology transition, one more reason why security and risk management matter more for banks, capital markets, insurers and every other part of our industry.

Change is opportunity, and there is plenty of great innovation out there. It’s pretty clear, though, that artificial intelligence, security and resilience, and a refocus on basics, will be the currency of this year’s financial world.

Here are four critical ways you’ll be seeing it happen.

1. Hyper-personalization drives growth

Incumbent banks went digital and learned new ways to sell and new efficiencies, along with the new importance of data. Now they need to add the personalized, relationship-based engagement that is core to their brands – but at scale.

This is where AI plays a key role in driving personalized responses and recommendations. This matters for customers seeking mortgages or financial planning, and for businesses seeking lines of credit. The same holds for other businesses, like insurance. Money is very emotional for most people, and that personal connection — feeling known and understood — will be key to loyalty and driving growth.

Financial institutions will need to work harder on building strong and unique permission-based digital customer profiles. The data needed to do that may well exist already, it’s just in silos. By breaking down these silos, applying a layer of AI and leveraging human engagement in a seamless way, financial institutions can create experiences that address the unique needs of their customers while scaling efficiently.

2. New perimeters in regulation

As global regulatory expectations continue to increase, the historical approach to having siloed data across operational, financial and cyber risks is no longer going to work. Rising complexity and compliance costs are placing significant pressure on an industry used to developing or sourcing point solutions for specific regulations. In fact, when comparing compliance spending to pre-financial crisis levels, Deloitte estimates banks’ costs have increased by more than 60%.

Regulators are requiring more precise and consistent data, with increased breadth, depth and lineage to preserve the effectiveness and transparency of financial markets. In 2023, institutions will need to start to break down silos to enable more precise and consistent regulatory reporting that meets the regional and global requirements across all risk disciplines.

Like the companies they monitor, regulators will increasingly use tools that look across various reports, spotting data anomalies. That means, both for cost purposes and to avoid trouble, institutions need a single source of data truth that reports numbers in the same form. Reporting is quickly becoming platform-based, and both the companies and their technology providers will need ways to modernize and streamline their data architecture using the best of cloud technology and open-source tooling.

3. New era of security risks

For years, financial institutions have invested in point security solutions, on-premises security solutions, which resulted in a proliferation of tools and siloed data systems across their enterprise, making a holistic view of the threat landscape hard to compile.

As we enter a new era of increased security risks, we’re going to see a significant shift toward a platform-based security approach underpinned by zero trust which allows financial institutions to have a comprehensive view of cybersecurity. By doing this, financial institutions will be able to unlock insights from the data, detect and remediate threats in a more timely manner, and add a layer of automated controls.

4. Refocusing on the basics

In recent years, incumbent financial institutions moved rapidly to close out any gaps they had in their digital experiences. Often this led to a lift and shift of existing processes to digital experiences.

In 2023, organizations will need to reflect on their digitization journey, and assess what is working and what new digital experiences or processes would need to be built from the ground up. This evaluation will also drive a reassessment of the right distribution mix across channels as more tasks are completed digitally.

Fintech companies face a similar “back to basics” year but are focused more directly on profits. Rapid growth was fine when money was cheap. Today, a path to profits is more compelling. This dictates a greater focus on costs of customer acquisition, cost of customer maintenance, and cost of operations.

Zac Maufe is the Head of Financial Service Solutions at Google Cloud, bringing over 20 years of banking experience to the role which is focused on transforming financial services around the world using the power of Google.

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January 9, 2023
How banking as a service unlocks opportunity for the banking sector | Bank Automation News

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As banking as a service (BaaS) nears mainstream adoption, there is a significant opportunity for banks to join the BaaS ecosystem, develop new relationships with fintech firms and create new revenue streams for themselves at the same time.

Amit Dua, president, SunTec

The mobile industry is one sector where we will see BaaS become readily adopted by mobile providers, fintech firms and banks. Smartphones — there are about 6.6 billion globally — have given people access to instant communication, and the financial services industry is beginning to understand that by offering smartphone users BaaS, they can facilitate day-to-day living and help families and businesses financially plan for everything from long-term goals to unexpected emergencies.

Most mobile operators around the world offer the ability to make payments via phones but they don’t offer access to banking. Nearly 1.2 billion people worldwide want access to savings accounts and insurance, for example, both of which BaaS can enable.

BaaS, while in its early stage of evolution, is fast becoming part of our day-to-day lives. As consumers, we are used to using apps such as Uber for frictionless transactions. We moved from cash to card and now to digital payments with relative ease, and our spending has probably increased as a result. Overall, all the players in the BaaS system will benefit — the banking provider, the technology company with a banking license, the charter or fintech, and the end consumer.

BaaS benefits far outweigh short-term challenges

The business of banking is moving out of the exclusive realm of banks and into a comprehensive ecosystem to bring personalized, customer-centric offerings to market faster. BaaS can enable banks to reach more customers, bring up their economies of scale and drive down costs. Accessing the data captured via BaaS leads to more personalized services and better customer relationship management and retention.

As BaaS becomes more mainstream, regulators have noticed. Neobanks and fintech firms are providing a seamless digital banking experience, and they need a bank to offer cards, lending, money transfers and other banking services. Fintechs also have limited experience with compliance processes. A BaaS model, therefore, becomes critical in a highly regulated and competitive market. Banks have responded by enabling fintech firms and neobanks to have a bank’s resources and infrastructure to expand their offerings while lowering operating costs.

In addition, banking services offered through APIs increase the risk of cyberattacks and security breaches if not carefully managed. Technical and operational constraints, like legacy infrastructure, can delay implementations and may require costly manual processes to overcome the limitations. Banks can align their business models and reduce risks by partnering with an experienced fintech that offers a secure digital layer that integrates seamlessly with multiple systems and offers end-to-end connection of business data.

BaaS is developing globally

BaaS is in its infancy, but adoption is growing. In the U.S. — where it is more challenging to receive a banking license than it is in Europe — BaaS providers are emerging.

Meanwhile, in Indonesia, an enterprise software supplier that provides software for managing gyms must also allow the management of memberships, heavy machinery or equipment, and payment processing. The gym chain, along with a licensed bank, becomes a BaaS provider — another example of BaaS being employed by commercial enterprises.

Customer expectations have changed: they want contextual, hyper-personalized, integrated banking experiences and on-demand access to banking. BaaS presents a new opportunity for financial institutions to acquire customers at lower cost, reach new customer demographics, grow revenues and deliver customer satisfaction.

Amit Dua is the president of SunTec Business Solutions where he leads sales, business development, client engagement, alliances and industry solutions.

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January 3, 2023
Buy vs. build in 2023: Preparing to partner | Bank Automation News

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The recent collapse of crypto exchange company FTX might have banks and fintechs reevaluating their partnership-vetting processes in 2023 to avoid potential reputational damage. “As a result of the recent circumstances arising in the digital asset space, it may lead to a phase of tread with caution [for partnerships],” Tejus Oza, managing director, North America […]

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Whitney McDonald

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December 30, 2022
Listen: Top 3 Bank Automation News podcasts of 2022 | Bank Automation News

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Open banking, augmenting the customer experience (CX), and AI were key themes across Bank Automation News’ most popular “The Buzz” podcast episodes in 2022. Listen as the BAN editorial team talks through the issues that will continue to impact the financial services industry in the year ahead. The three most played podcasts of the year: […]

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Brian Stone

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December 29, 2022
Top 5 stories of 2022: Bank and fintech partnerships, acquisitions | Bank Automation News

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Financial institutions looking to modernize their internal systems in 2022 have often turned to fintech acquisitions or partnerships for cloud computing, digital banking, robotic process automation, payments capabilities and more. Here are Bank Automation News’ five most-read transaction stories of 2022: 1. Envestnet acquires business intelligence firm Truelytics Wealth management giant Envestnet acquired business intelligence […]

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Whitney McDonald

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December 28, 2022
Top 5 innovation and technology stories of 2022 | Bank Automation News

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Technological innovation has taken the auto industry by storm since the start of the COVID-19 pandemic by automating lending operations and addressing consumer pain points in the car-buying process to improve the end-to-end purchasing experience. In 2022, lenders continued to launch new programs, form new partnerships and leverage automation to expand capabilities and efficiency. Here […]

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Riley Wolfbauer

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December 27, 2022
Hyperpersonalization is vital to winning the SMB banking game | Bank Automation News

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Financial institutions today are teetering into a Nash Equilibrium.

Mike Butler, CEO, Grasshopper

A Nash Equilibrium, named for mathematician John Nash, occurs when players in a game can fully anticipate the choices of other players. When all players’ actions are considered, everyone is able to achieve their objectives. Every player wins.

The concept was a groundbreaking contribution to game theory study and continues to be widely used by economists — but it also has practical applications. In the banking industry, financial institutions can benefit from Nash’s work by adopting a holistic approach to personalization, better understanding individual customer needs in order to make business decisions based on real market demand. This strategy is proving to be an effective way to connect with customers and win business.

Creating a tailored platform

The expansion and adoption of digital banking has unlocked the opportunity to create a highly individualized customer experience known as “hyperpersonalization.”

Deloitte defines this as “using real-time data to generate insights by using behavioral science and data science to deliver services, products and pricing that are context-specific and relevant to customers’ manifest and latent needs.”

Personalization powered by real-time data and analytics to serve each distinct customer has quickly become an expectation. A Salesforce survey found that 56% of customers expect banks to anticipate customer needs and make appropriate recommendations even before initial contact.

Banks are using automation to serve individual clients by tracking transactional activity and extracting unique data. They use the information to provide services that best fit specific customers’ needs. Based on customer expectations, banks are aggressively pursuing these strategies. HSBC executives expect hyperpersonalization will become a new standard of service, and JPMorgan Chase is investing $12 billion in cloud and AI technologies to strengthen the customer experience.

Leveraging partnerships to meet goals

Financial institutions understand that technology is the gateway to achieving hyperpersonalization.

In a survey conducted by information technology services company Wipro, industry leaders listed “improving the user experience with greater personalization” as the most valuable use of AI technology. However, most financial institutions are not equipped with the infrastructure to collect and process data, conduct pertinent market research and retain qualitative feedback from customers.

To bridge the technology gap and advance the integration of hyperpersonalization, banks are partnering with fintech companies like Plaid, MX and Alloy, which provide the mature and future-ready technology that banks need to foster a custom experience and better connect with customers.

With access to the right technology, the potential for hyperpersonalization is infinite. Leveraging automation and machine learning technologies gives banks an opportunity to connect with potential customers, solidify existing customers and serve as a differentiator in an increasingly diverse marketplace.

Knowing your customers inside and out

At its core, this strategy is simply a means of better understanding customers and the market. Technology can reveal subtle insights into customer patterns and behaviors and the trends shaping the market to deliver individualized solutions. Banks are able to use data to assess the risks and rewards, and make a decision that is best for the organization’s goals.

The strategy should also include an analysis of competitor activity, including niche submarkets and emerging specializations. Information about other industry players will reveal market gaps or unmet needs as well as overserved demographic groups or areas of the market with the potential to become overheated. Digital banks can use this information to decide which market areas to pursue and where the company’s product lines and expertise best fit within the existing market dynamics.

Building loyalty

Banks are not the only beneficiary of a hyperpersonalized strategy. SMBs will benefit from individualized analysis, intelligent insights and personal communication. The strategy will not only win customers but establish a meaningful connection that will evolve into a trusted and loyal relationship. According to research from Deloitte on hyperpersonalization in banking, “emotionally connected customers are more than twice as valuable as even highly satisfied customers.”

To achieve a human connection, a personalization strategy should include progress reports for customers tracking financial performance, support and consultation, and education about how a company’s financial objectives are linked to broader economic, social and environmental trends. This is where customers will see the qualitative benefits of a bespoke platform.

With hyperpersonalization, the digital banking industry is playing a positive sum game, one where both banking customers and financial institutions win. The trend is redefining competition in the financial services industry and delivering better banking to small businesses. That truly is a victory.

Mike Butler is the chief executive of digital bank Grasshopper which offers small businesses products and services for specific industries such as commercial real estate lending and yacht financing.

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December 23, 2022
5 Questions with … Bank of America SVP Jorge Camargo | Bank Automation News

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Bank of America Senior Vice President Jorge Camargo is focused on delivering a high-tech, high-touch strategy to improve customer experiences.

The $3.1 trillion bank continues to invest in both tech talent and in the bank’s virtual assistant, Erica — an effort that Camargo has led.

Bank Automation News recently caught up with Camargo to discuss Erica and the bank’s digital strategy heading into 2023. What follows is an edited version of that conversation.

Bank Automation News: What is Bank of America’s innovation strategy for 2023?

Jorge Camargo, SVP at Bank of America

Jorge Camargo: Understanding that the 2023 economic outlook is uncertain, it is crucial that financial institutions offer clients individualized banking solutions that evolve with their needs and lifestyle. These solutions should be personalized to each client and continue to change and evolve as their priorities do. We will continue investment in AI and automation in 2023. As adoption and engagement with Erica and other digital capabilities grows, we will continue to look at clients’ interactions and overall financial needs based on their current use to help inform our investments in new digital offerings.

BAN: How did AI enhancements improve Erica in 2022?

JC: Bank of America continues to expand and refine Erica’s capabilities to provide clients further insights and guidance on optimizing cash flow, managing debt, monitoring transactions, capitalizing on savings opportunities and balancing competing priorities to reach critical financial goals. In September 2022, we implemented Mobile Servicing Chat by Erica to connect clients with representatives to answer more complex servicing questions live, with more than 170,000 chats having already taken place.

We also integrated Erica’s capabilities further across all areas of our business, including the launch of Erica for Benefits online and the expansion of Erica’s expertise to include retirement-planning advice. We’re continuously enhancing Erica’s abilities; the latest example includes recognitions of many of the common searches we see on our online banking website.

BAN: Are automation improvements on the horizon for Erica?

JC: Our continued investment in Erica’s AI-powered capabilities enables us to quickly respond to voice, text chat, or on-screen interactions from clients who need assistance with financial transactions, while proactively delivering personalized insights and advice at key moments. Erica offers unique interactive insights on how to save money by paying down credit cards or notifying clients when recurring charges such as cell phone bills or subscriptions increase unexpectedly.

We continue to refine and automate our tuning process to ensure Erica continues to become smarter and the answers provided remain timely and relevant to our clients. Tuning is a continuous monitoring and retraining process that our team conducts in the background to guarantee Erica remains a state-of-the-art financial assistant.

BAN: How does the bank choose which upgrades to make for Erica?

JC: We’ve been on a journey of increasing Erica’s capabilities to reach all sectors of a client’s banking experience. Our team continuously reviews Erica client interactions and labels them to understand client needs and requests. Labeling is the process of mapping a client’s question or request to the resulting action Erica will perform. If any issues or opportunities for improvement are identified during the labeling process, our team uses those learnings to re-train the Erica AI model. This process is repeated thousands of times per year to ensure Erica continues to become smarter.

BAN: What new tech is on your radar for 2023?

JC: Bank of America invests over $3 billion on new technology initiatives each year. We are focused on being open, flexible and fast as we invest in state-of-the-art digital banking technology to help our clients easily and securely manage their finances. We’re always looking at innovations in technology and AI specifically that help to drive further automation at scale and deliver a safe and seamless client experience while keeping them in control of their information.

Applying data, AI and business intelligence to create tailored experiences with leading capabilities and relevant and timely information that empower our clients is at the center of everything we do. At Bank of America, we are dedicated to continuously improving our digital offerings, as well as listening to client feedback and data analytics to guide what’s working and how we can better our services.

Bank Automation Summit US 2023, taking place March 2-3 in Charlotte, is a crucial event on automation and automation technology in banking. Learn more and register for Bank Automation Summit US 2023.

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Brian Stone

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December 22, 2022
Listen: How a neobank keeps SMBs afloat | Bank Automation News

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Small- and medium-sized businesses (SMBs) must navigate several challenges during their first years in business. Understanding the needs of SMBs is critical, as more than 50% of small businesses fold within the first five years, according to the Bureau of Labor Statistics. Banks that create strategies to help support SMBs can become an integral part […]

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Brian Stone

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December 20, 2022
Becoming ‘RTP ready’ – How banks can prepare the back office for instant payments | Bank Automation News

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As we approach the 2023 launch of the FedNow service, banks across the U.S. must consider whether they are ready for real-time payments — both technologically and operationally. The 24/7/365 nature of instant payments will likely present new challenges for community banks, but proper preparation will go a long way toward supporting more seamless transition.

Abhishek Veeraghanta, CEO, Pidgin

For some community financial institutions, adjustments to their current treasury operations and workflows will be necessary. More specifically, many banks will need to review which back-office processes currently require manual intervention and find ways to automate them to facilitate real-time payments in 2023 and beyond.

There are a few practical steps bank leaders should take now to prepare and get ahead of the most common hurdles.

Beware of these back-end challenges

To get ahead of any roadblocks to real-time payments, financial institution leaders should start proactive discussions with appropriate internal stakeholders — as well as any third-party vendors — to ensure that all systems, especially on the back end, are prepared to process payments and the data associated with those transactions in a real-time environment.

Many banks will need to adjust their current treasury operations and IT infrastructure to support this.

Today, it’s not uncommon for community and regional financial institutions to use multiple systems for processing payments on the back end. A bank may use individual legacy systems to process transactions based on the payment type, such as ACH, wire and more. For banks that have grown through mergers or acquisitions, the web of legacy systems being used to process payments tends to expand as well. This creates additional complexities and inefficiencies that hinder a financial institution’s ability to process payments as quickly and cost-effectively as possible.

Instead, financial institutions should first focus on unifying payments and information about those transactions across the different payment types and payment rails. With this centralized approach to payment processing, banks can more quickly and easily manage and process payments in real time, regardless of which channel was used to originate the payment.

By using one system to create a more cohesive payments strategy, banks also gain access to a more robust and centralized view of transaction data. Financial institutions are quickly realizing the potential of the rich data that comes with 24/7 instant payments. The ability to consolidate transaction data from disparate sources into a central hub and view that data in real time can improve compliance, risk management, liquidity management, fraud detection, processing speed and much more.

Back-office and treasury operations: opportunities to automate

To illustrate the value of real-time transaction data, consider the following example. There are many financial institutions that still require employees to memorize hundreds, if not thousands, of codes and manually perform certain tasks, such as reconciling and settling payments. Financial institutions should take a close look at these back-office processes that often require manual intervention.

Can any of these processes be automated to help streamline workflows? Rather than spending hours reconciling payments through multiple channels, balancing accounts and compiling reports, a centralized payments platform can automate and simplify many of these processes, saving time and minimizing the risk of human error.

Therefore, financial institution leaders should consider how they will configure rules and define the parameters for these various back-office workflows, including reconciliation and exception management, to name a few. For instance, some banks may opt to assign specific reconciliation processes for payments based on certain transaction attributes.

A single, unified payment platform can also enhance compliance and risk management. By integrating an open architecture payment platform with a bank’s other systems, such as anti-money laundering and fraud detection tools, the bank can ensure all transactions are processed appropriately without sacrificing speed or being exposed to compliance or security risks.

Additionally, financial institution leaders need to understand how they will maintain suitable liquidity for around-the-clock, instant payments. With real-time views of payment transaction data, financial institutions can optimize their funding positions and improve liquidity management, resulting in fewer missed revenue opportunities.

Preparing for success

With the 2023 launch of the FedNow service quickly approaching, banks across the country are strategizing about when and how their organization will offer real-time payments for their customers.

By deeply understanding their existing payment operations, back-office systems, and the potential challenges and opportunities that real-time payments will offer, financial institutions can approach faster payments with confidence.

Abhishek Veeraghanta is CEO of Pidgin. Previously, he held positions at VSoft, Tesla, MRL Posnet, and PrimeRevenue. Veeraghanta holds a Bachelor of Science in Business Administration, Marketing and Entrepreneurship from Georgia Tech.

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Abhishek Veeraghanta

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December 19, 2022
By the numbers: Company CFOs, treasurers look to bank partners for automation | Bank Automation News

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Chief financial officers and treasurers are feeling squeezed in today’s market as they juggle multiple priorities, and they can look to technology and automation to relieve some of that burden. Investing in technology can help companies reduce costs, manage growth and improve operational efficiencies — but 58% of companies don’t have a formal digital transformation […]

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Whitney McDonald

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December 15, 2022
Bank Automation News launches Transactions Database | Bank Automation News

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Bank Automation News is pleased to announce the launch of our new Transactions Database, a list of technologies selected or acquired by companies in the financial services industry.

The Transactions Database, which is updated weekly, allows financial services executives to follow which technologies banks are selecting to enhance their automation efforts.

The database allows users to search and filter by various criteria, including asset size, vendor, solution name, solutions type and cloud capabilities.

To begin exploring the industry’s latest transactions, click here. To submit new transactions to be listed on the Transactions Database, click here.

Bank Automation Summit US 2023, taking place March 2-3 in Charlotte, is a crucial event on automation and automation technology in banking. Learn more and register for Bank Automation Summit US 2023.

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Whitney McDonald

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December 12, 2022