How to Improve FinTech Automation
There are few areas of business, or even of life as a whole, as important as finance. Financial needs are a common concern for all. This makes it a natural opportunity for tech to make a difference, whether it’s helping with consumer financing, corporate tax concerns, or anything in between.
Although the fintech revolution is well underway, it still has a long way to go before it can catch up with cutting-edge technology. Here are some suggestions for areas that need improvement, now and in the future, to help accelerate fintech automation.
Fintech often operates in its own bubble. Accounting services can be essential to a business. And yet, they often remain isolated from other areas of a company. This creates siled information that can restrict business activity.
Many companies have turned to IPaaS solutions to help unify their organizations. The acronym stands for “integration platform as a service”. It is a cloud-based software solution that helps integrate the various software tools used by a business. It connects applications, maps data, and moves data between different API endpoints as needed.
The IPaaS concept has been around for a while. In fact, it is already expanding further into new integration-focused automation platforms. These further streamline the connection between applications and the exchange of information.
That said, fintech still lags behind IPaaS technology in many ways. If fintech is to keep pace with the rest of the tech industry, it needs to grow in the key area of automated integration. The ability to integrate and share information with other tools is an essential element that fintech must adopt to keep pace with a data-driven future.
Another area where fintech needs to improve is in verifying sensitive data. The SolarWinds hack served as a stark reminder that cybercriminal activity lurks behind every corner of the internet. And, of course, this only serves as a reminder, as consumers have been dealing with an endless stream of cybercrime news for years. It seems that every two months a major hack is announced to the public.
The point is, it’s understandable that banks and financial institutions are reluctant to put such sensitive activities as vetting and approving applications on autopilot. If cybercriminals hacked into a financial system, this could be a serious problem. According to identity verification platform Okta, nearly 60% of customers are hesitant to do business with any company that has suffered a data breach. However, the percentage of mistrust rises precipitously when a breach occurs in the financial services industry.
Nevertheless, the concept of automation naturally applies to mundane activities, such as the application approval process. This is an area that needs improvement as lenders try to process an endless stream of applications.
That said, it’s not an untouched segment of fintech automation. Currently there are software solutions that automate the verification of various consumer financial applications. However, the activity remains cloudy and unreliable for many consumers.
The financial industry needs a stronger and more reliable solution. If fintech companies can create a reliable automation process, it can allay consumer fears. It can also encourage financial activity by speeding up approval time and reducing human error.
RPA MUST BECOME THE GENERAL PUBLIC
Robotic process automation (RPA) has been growing for quite some time. What started as a field of research has turned into real-world application, albeit at a slow pace.
Despite its slow development, RPA continues to be one of the most promising ways to reduce operating costs. It also helps to increase the efficiency of banking operations. The ability to use AI and machine learning to perform a variety of mundane tasks is an essential next step in fintech automation.
Growing areas such as data analytics and process mining need to find greater applications within existing banking services. The insights produced by these disciplines should easily integrate into machine learning and AI tools. This can help organizations identify and improve their operations from within.
FINTECH MUST ALSO ADOPT EXTREME AUTOMATION
Those operating at the forefront of the financial industry are familiar with the current applications of RPA, limited as they may be. But even when existing solutions appear, these are too often applied to internal operations like those listed above.
Those who are serious about taking fintech to the next level should be looking for ways to use the latest RPA technology across their entire business. They need to embrace the concept of extreme automation by looking for every way to integrate robotics into their systems.
For many, this will require a step back. The haphazard development of many RPA concepts has left a patchwork of solutions. As fintech automation improves, financial institutions need to find ways to apply new technology to customer-facing activities as well.
This ability to apply automation throughout the customer lifecycle suits few industries more than the world of finance. The industry can be cold and calculated, operating on financial and mathematical concepts that are ideal for the robotic management of many customer interactions.
That said, RPA can and should be applied to more than just streamlining internal operations within a banking organization. They should also find uses in customer acquisition, conversion and retention. From analyzing data to automating mundane procedures, extreme RPA automation is a reality that has the potential to revolutionize the fintech industry.
Fintech has already come a long way. From online banking to managing digital interactions and everything in between, there are countless ways technology is impacting the financial industry.
However, the effective use of automation is necessary if fintech is to take the next step. And if fintech hopes to keep pace with the rest of the tech industry, tools like extreme RPA automation and automated onboarding are needed.
Chalmers Brown is Due’s Chief Technology Officer.