How Can Banks Achieve Hyperautomation?

As financial institutions continue the push for digital transformation, the need to build efficiencies through automation is only growing – and the push into that next phase, what some are starting to call hyperautomation, is a big part of that.

The concept is relatively simple: it’s the end goal of digital transformation, that point at which transactions have been automated to the maximum extent possible. How that’s achieved – and what shape it should take – are the more difficult questions to answer.  Industry experts spoke on the issue at a recent talk hosted by FinTech newswire Finextra.

“It does feel to me we’re now in a pivotal moment,” said Nick Haslehurst, financial services expert and former CFO of foreign exchange company Moneycorp. “We’re moving away from FinTech just being for Silicon Valley roundabouts or laptop entrepreneurs, to increasingly seeing every type of financial institution open up to digital technology and investment. And we’ve seen many of those banks opening their platforms. That’s a theme today; the collaboration of banks and the big tech sector to develop these solutions.”

That kind of collaboration may be critical to achieving goals, particularly when it comes to sectors like corporate banking that have long been locked into legacy ways of thinking.

“It’s really around the area of what customers are starting to expect,” said Jay Venkateswaran, head of banking and financial services at WNS Global Services. “I think experiences over the last few years – in people’s personal lives through the retail banking space – has to a large extent set expectations in the corporate banking world. For retail, information is available at the touch of a button. That kind of expectation had not previously been present in the corporate banking world but is now par for the course.  As a provider, how do you respond to that?  That’s really the biggest challenge banks and FinTech companies need to address right up front.”

When it comes to achieving hyperautomation, that customer focus is key. A lot of advancements in AI and Robotic Process Automation (RPA) have traditionally been focused more on the back office; automating repetitive tasks to free up bank employees for more critical strategic and customer relationship-oriented tasks. Digitalization can go much further than that, however, as FinTechs increasingly build bespoke use cases to better serve customer bases.

“When I look at AI solutions for the back office, we’re just putting a band-aid on a core piece of the broken banking ecosystem to try to make things a little bit better, a little bit faster,” Venkateswaran said. “But I think over the last 18 months, particularly since the pandemic forced us to accelerate digitalization, strategies have shifted to a more holistic perspective. If you put the customer at the front of the line, you come up with different solutions.”

That kind of approach can seem complex. But many of the steps that banks can take are actually still fairly straightforward – as simple a process as looking to those things that continue to require wet ink on paper.

“To be honest, I think banks overall still need to recognize that, if you look at the broad variety of services you can access physically in a branch, there’s still work to be done in actually making all of those digitally accessible,” said Malin Lignell, VP of Digitalization and Innovation at Swedish bank Handelsbanken. “There’s a journey to be made there for all of the banks in general. For me, it’s very important to go to the customer’s view. That means really understanding that customer journey, and knowing it normally does not start with the financial service itself, but a few steps before that.”

The most important step for banks in the process, however, is simply to embrace the process.  Many have, but as a push towards full digital transformation continues to advance, that consensus is going from an innovative feather in a cap to an absolute competitive necessity.

“Every bank, every country, every market has a slightly different answer,” Venkateswaran said. “Some banks have embraced the FinTech revolution – they’ve found the right partners, the right points of integration with these new technologies and new platforms, and have made it work. Others have innovated in-house; Goldman Sachs essentially started a whole new FinTech within their traditional financial institution.  Other banks have done a great job of taking those best-of-breed technologies that FinTechs are developing and bringing those in-house.

“Then there’s a fourth group which is lagging behind. That’s the group I worry about most because they’re going to get left behind at some point.”

— Jessica Purdy