How is Hyper-Automation Reshaping the Future of Banking?

Key Takeaways:

1. Automation will move away from individual tasks towards end-to-end processes
2. New levels of efficiency, productivity, transparency, security and compliance can be achieved
3. Repositioning of traditional job roles into more strategic, value-adding positions
4. Robust AI agents can support hyper-automation in the years to come

Automation has already transformed a vast array of processes and activities across the banking sector. But now hyper-automation is set to expand the potential of the technology even further. 

Hyper-automation brings together artificial intelligence, Natural Language Processing, Robotic Process Automation (RPA) solutions, process mining and other technological advancements, so that organizations can automate as many IT and business processes as is practical. 

While simple automation solves isolated tasks and intelligent automation enables rapid decision-making with evolving workflows, hyper-automation represents a holistic strategy connecting people, systems, bots, AI and business rules.

This comprehensive approach is reframing the role of automation within businesses: instead of looking for individual tasks to automate, hyper-automation looks for processes that can be automated in their entirety, end-to-end.

In this blog, we’ll explore the role that hyper-automation in banking will play in the months and years ahead. This includes practical use cases, what this means for the workforce, and the implications around ethics and data privacy.

The Hyper-Automation Use Cases Transforming Banking

Banks deploying automation technologies have been able to reduce their costs by an average of 20-30%. Hyper-automation has the potential to drive even further savings, while improving productivity among the workforce and enhancing customer experiences.

Practical use cases for hyper-automation in the finance sector include and are not necessarily limited to:

Improved Transparency, Auditability and AI-Driven Compliance

Hyper-automation can help monitor transactions and benchmark data against regulations, so that any potential cases of non-compliance can be identified and resolved at the earliest opportunity. Similarly, automated audit trails and reporting enable full visibility into all transactions, maximizing transparency and improving decision-making.

Better Customer Experiences

Customers can benefit from the power of hyper-automation in several different ways. For example, new customers can be onboarded faster and more easily, thanks to automated document verification and ID checks. When they need help, they can connect 24/7 to AI-powered chatbots that are increasingly capable of handling complex queries and issues. And when they need personalized financial advice, they can receive tailored recommendations around investment and financial planning, based on their historical data and risk profiles, and wider market trends.

Stronger Security and Protection

With cybercrime constantly on the rise and the finance sector an obvious target, hyper-automation can help keep funds, systems and data safe. Intelligent fraud detection uses machine learning algorithms to spot unusual transaction patterns in real time, so that fraudulent activity can be shut down much earlier, along with automated recommendations for proactive risk mitigation. Additionally, automated ‘Know Your Customer’ processes and background checks can streamline customer verification and risk assessment.

Smoother Data Processes

A wide variety of back-office processes can be transformed in speed, cost and accuracy through hyper-automation, from account reconciliation and report generation to data entry and processing loan applications. Improved data governance can also help ensure data quality and consistency, with the help of validation, standardization and monitoring processes. This is especially useful as Artificial General Intelligence (AGI) is enabling the processing and analysis of unstructured data, to encourage more predictive and detailed decision-making.

What Does Hyper-Automation in Banking Mean for the Workforce?

As many as 54% of banking jobs have a high potential to be automated. Naturally, this may raise questions about the future of roles within the industry. However, this can actually represent a significant opportunity for growth and transformation within the sector.

AI and hyper-automation technologies still need management and oversight, and it’s up to humans to make decisions and take action based on the insights that these technologies generate. This will help reposition many traditional job roles, such as tellers, data entry clerks and back-office processors, into more strategic positions. Automation will be able to take care of the more repetitive tasks, while employees are able to apply their skills and experience to more complex tasks and add more value elsewhere.

TPBank Vietnam exemplifies this transformation, as their deployment of 473 automation bots across various platforms has not only saved millions in costs (with expected 20% increased savings from 2024 onward) but also minimized manual tasks, improved accuracy, and enhanced customer experience.

Alongside these repositionings, several new job roles and opportunities are opening up as a consequence of automation and AI, such as AI trainers, process optimization specialists and ethics officers.

Ethical AI and Data Privacy: Building Trust in Hyper-automation

One of the biggest challenges that banking firms will need to address with hyper-automation is building consumer and employee trust in the technology. 

For example, when AI algorithms rely on historical data from times of prejudice, the results generated may lead to discrimination in areas such as credit scoring and loan applications. Alongside this, research has found that 57% of banking executives are still struggling to get a unified view of their customers, with technology and cost cited as the main barriers to progress. 

Robust, transparent systems can help in both of these areas, as well as supporting compliance with regulations like GDPR through consent mechanisms, and tools for accessing, correcting and erasing data as required. 

Explainable AI (XAI) frameworks can also help audit algorithm-based decision-making, by taking model accuracy, transparency and fairness into account. That way, humans can have full faith that the results their tools are providing are accurate, helpful and unbiased.

In Summary: Hyper-automation in Banking Leading the Way

Over the second half of this decade and beyond, hyper-automation in banking will help the capabilities of automation and AI be channeled into practical use cases with real-world benefits. They will also help support new innovations and developments such as:

Hyper-Connected Ecosystems

The evolution of banks into platform-based businesses, offering integrated financial services thanks to APIs, shared data networks, and partnerships with retailers, service providers and FinTechs.

Phygital Banking

The blend of physical and digital banking experiences, where customers get personalized omnichannel journeys that move seamlessly from mobile apps to smart branches and vice versa, supported by biometric authentication.

Transformed Efficiency

The cognitive leap where AI systems constantly learn and adapt in real-time, enabling ever-increasing improvements in productivity, innovation and predictive decision-making across all banking functions.

All of this will help generate internal efficiencies, annual operational savings, and will help customer satisfaction and experiences reach new heights. But to make it happen, the right technological building blocks need to be in place, and that requires banking-specific AI expertise. 

A strong partnership can also help address key challenges around poor quality data, navigating the ever-growing marketplace of products, securing resources with the right technical skills, and implementing effective workforce enablement and training.

Talk to Ciklum today to learn more about our pre-built AI agent template for compliance, CRM and fraud detection, and take a moment to explore our unique approach to intelligent process automation.