Turning challenges into opportunities using intelligent automation in retail banking

Blog by Glorious Insight

Turning challenges into opportunities using intelligent automation in retail banking

The COVID-19 pandemic has brought the businesses down and the financial market on its knees. It has forced retail banks to reinvent their account serving strategies to address the rising delinquency rate and a higher probability of consumer lending defaults. However, engagement in day-to-day banking activities is the area that is most severely impacted. This has led to unforeseen digital automation in the banking sector. Financial institutes are deriving new protocols for work from home (WFH) and testing business continuity plans to mitigate the COVID-19 impact and subsequent disruption.

Intelligent automation is providing a way to convert the crisis into opportunity. It is enabling banks to drive value to their customers as they evaluate their financial options. Financial companies who could react early and adapt the technological surge are able to get an edge over other competitors.

The primary derivative of automation in banking is to avoid using human resources wherever machines can serve the purpose. Nearly 20% growth of the technology automation market is crafting a new future of retail banking. Incorporating advanced data analytics and AI technology makes the automation smart and helps companies leverage their massive datasets to draw significantly greater value. In the near future, these technological transformations are likely to reduce the cost by nearly 20% and increase revenue generation by 10% by enhancing speed and accuracy along with improved customer experience.

The automation can take away repetitive jobs and let intelligent human minds focus on innovation and strategy making. Experts expect automation to encourage efficient utilization of the workforce and increase its capacity by 25 to 30% in the coming three years. Retail banks can put these saved human hours to more valued tasks to stimulate organizational growth.

Challenge for retail banks and their mitigation strategies

The present pandemic crisis has given shockwave to the financial market and world in general. The global nature of the pandemic has forced institutes to develop innovative retail banking strategies for the future. It has presented many challenges that are causing turmoil in the industry and forces companies for quick adaptation for pragmatic and precise futuristic planning.

Operational disruption

The current crisis emphasizes the need for the development of a readiness playbook. Retail banks have to work and reform their protocols for daily operations and work from home rules to minimize disruption for the employees. The playbook should establish effective and smooth communication within the organization and with the customers.

Reduced dominance of branch and ATM operations

Lockdowns and guidelines to stay at home have reduced the dependency of customers and banks on branches and ATMs for everyday transactions. The scenario is likely to continue for a long period and become normal for the retail banking post covid crisis.

Institutes need to make a complete shift towards digitization and set up new strategies and procedures for digital operations. It indicates a shift to a banking system where most of the customers' queries, transactions, and services are handled online using websites, mobile apps, e-mails, or messaging.

Office disruption

The pandemic crisis has confined both the customers and employees to their homes. When most of the employees are working from home, retail banks have to derive new strategies for infrastructural redesign, data security and risk monitoring, and tools and support for digital migration.

Self-servicing due to social distancing

The sudden change in the banking operation modes has led to a disturbance in the consumer groups. It is taking some time for the consumers to get acquainted with the automation in banking. This is evident from the fact that call center volumes went up by nearly 90% with just a 20% increase in digital transactions. Banks are considering digitization of services including BOTs, electronic alerts and trouble-shooting, and hyper-personalization of services for enhanced customer experience.

Glorious Insight, a leading technology solution provider, has extensive experience in the retail banking industry. We are working rigorously working with top retail banks to derive the best possible automation futuristic strategies for retail banking post covid.

Factors impacting the COVID-19 recovery scenario

While automation is a promising solution to lay down the path of the future of retail banking, the crisis period has shown low-level preparedness for this radical transformation. It has brought up the inability and reluctance of customers to go for self-service through digital support. Also, it is an eye-opener for banks about the efficiency, effectiveness, and ability of their system to answer customers' queries and deliver services

However, the transformation is happening at a decent pace and companies are focusing on improving their system and providing superior personalized services to the customers. Glorious Insight is using this situation as an opening to plenty of opportunities for innovation for the retail banking post covid crisis. The factors that are likely to dominate the formation of the COVID-19 recovery scenarios are:

The usage of credit cards has been reduced by nearly 25 to 30%. The applications and approvals are also likely to reduce significantly.

Both consumers and small businesses have lost their incomes in this period. This has increased the chances of a loss of credits.

Reduction in sales and an increase in call volumes have increased the operational cost by up to 30%.

Historical drop in interest rates and treasury yields directly impact the net interest margins (NIM), creating a higher low NIM scenario./p>

Extreme digitization for agile deployment

Extreme digitization is going to dominate the retail banking strategies for the future. Banks have to work feverishly to ensure digital flow and reduce the assisted channels for customers' needs. Need detection, innovation, and testing, and scaling are the three key elements for the agile deployment of extreme digitization.

Need detection

For optimized retail banking post covid, banks must rigorously use AI to churn the customers’ calls and chats to identify inferring friction with an intent to optimize system according to customers’ behavior.

Innovation and testing

Automated systems use data analytics insight to find the section of the journey and the particular experience that needs improvement. A quick schedule for implementing and testing solutions is needed to continue services.

Scaling

Automation must be done considering the future of retail banking with adequate scalability to accommodate business growth.

Benefits of automation with Glorious Insight

Glorious Insight delivers best-in-class technological solutions for the retail banking market. Our team is an efficient blend of technological masters and domain experts to create innovative and super-customized solutions for our clients. Fundamental benefits you can draw from our systems include:

Improved productivity

Reduced operational cost

Flexibility, adaptability, and scalability

Platform compatibility

Enhanced accuracy

During the COVID-19 pandemic crisis, we have walked hand-in-hand with our clients to enable a smooth transition to digital operations and cope with the changing market trends. We establish a digital ecosystem with intelligent automation to identify and create opportunities for business growth.