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Digital Transformation Vs. IT Modernization: What’s the Difference?

Technology | Digital Transformation | IT Management

Digital Transformation Vs. IT Modernization: What’s the Difference?

July 11, 2023
Digital Transformation

In today’s dynamic business landscape, organizations face numerous challenges such as economic volatility, supply chain complexities, evolving work styles, competing for talent, fickle consumer trends, market commoditization, sustainability concerns, and more. As stated in Forrester Research’s 2021 report, “In the 2020s, the one constant will be disruption.” CIOs play a crucial role in navigating these challenges and driving business transformation. The ability to embrace disruption will set leaders apart from laggards in this ever-changing landscape.

In this context, it is important for technology executives to make the choice between modernizing legacy processes or instituting a complete transformation of their systems. Yet, many organizations struggle to understand the difference.

In this article, we explore both digital transformation and modernization and why transformation is mission-critical for modern businesses.

Digital Transformation Vs. IT Modernization

Digital transformation has a broader scope and touches  almost every facet of a business. IT modernization’s scope is limited to upgrading existing systems.

Don’t get us wrong. Modernizing your tech stack  is just as critical to your business as transformation. The 2023 CEO Priorities survey shows that 51% of CEOs think low digital maturity/technical capabilities are barriers to creating business value with AI. As companies try to achieve digital maturity, they’ll go through multiple IT modernization iterations.

Let’s dig into the differences between digital transformation and IT modernization.

Digital Transformation in Practice

A digital transformation is meant to change or evolve some of the DNA of an organization such that a company is better equipped to compete in a constantly evolving  environment where customer expectations are changing at breakneck speed.  Technology can and should play a central role in a digital transformation but technology alone will not equip a company to operate effectively in this “new normal”, this requires a careful choreography of people, processes, and technology.

In addition to being better equipped to meet evolving customer needs and expectations, digital transformation can be your doorway to scaling your business by entering new markets, eliminating or minimizing process inefficiencies, and becoming more agile.

Domino’s is an excellent example of how digital transformation can change your company’s growth trajectory. Back in the day, the pizza chain was a brick-and-mortar restaurant that promised to deliver pizzas in under 30 minutes.

Competitors started offering a similar service. So Patrick Doyle, the CEO of Domino’s in 2011, decided to create an app that allowed customers to order pizza within seconds. Currently, Domino’s is testing delivery via autonomous vehicles to stay ahead of delivery services like DoorDash and Uber Eats.

Essentially, digital transformation involves a fundamental shift in various business aspects, like internal processes and your business model. The goal is to achieve sustained growth and become a more competitive business.

Modernization in Practice

Modernization is often confused with digital transformation, but they are not the same. Modernization focuses on building on top of existing systems. For example, you could implement cloud computing and AI without changing legacy processes.

Suppose you’re a bank that is looking to improve its mortgage origination process. You currently require staff to enter customer details manually. Over the next quarter, you want to implement an automated loan origination system that eliminates almost all the mundane tasks in the origination process.

For this, you’ll use technologies like AI, natural language processing (NLP), optical character recognition (OCR), and robotic process automation (RPA) through third-party integration or by building a new solution. These technologies will enable you to automate tasks like document processing and customer onboarding.

These technologies can help you re-engineer the origination process to make it more efficient—without disturbing your underlying mortgage process or the business model.

Why Digital Transformation Matters

Digital transformation is right for you if you’re in a rapidly evolving market and want to stay ahead of the competition.

Since digital transformation involves a more comprehensive change in your business’s model and operational processes, it can be resource and time-intensive, especially in the absence of first-hand experience on the multi-faceted nature of transforming an organization.  Let’s go back to our mortgage example to understand the difference between transformation and modernization.  Consider if the mortgage lender wanted to move from being a traditional, broker-based lender to a digital direct lender and the relative time, cost and complexity required to stand up a whole new business model.

IT modernization is relatively less resource and time-intensive. Modernization is an excellent place to start if you’re struggling to meet customer expectations or efficiency targets because of outdated technology.

Revamping your technological systems will help you reduce costs, operate more efficiently, and scale your business.

Digital transformation matters to two types of businesses:

  • Businesses that want to stay ahead of the curve by implementing the latest technologies in a fast-evolving market.
  • Businesses that need to survive in a market where other businesses failed to implement new technologies on time.

Digital transformation isn’t easy for either of these businesses to implement without an experienced team—only about 30% of companies navigate digital transformation successfully.

However, once you’ve successfully completed digital transformation, your business stands to benefit on multiple fronts.

The pandemic caused the most recent surge in digital transformation. Businesses were forced to adapt to an environment where employees prefer remote or hybrid work models, but they benefited greatly from the changes that followed.

That’s exactly why more businesses are excited about digital transformation. In fact, according to the World Economic Forum, the combined value of digital transformation to society and industry will exceed $100 trillion by 2025.

Here are some benefits of digital transformation that highlight why it can be a game changer for your business this year:

Improves Customer Experience

Customer expectations have risen significantly over the past decade. They prefer businesses that offer a great experience in all customer-facing aspects.

Enable  Data-Driven Decision Making

Data analytics is one of the most critical capabilities you gain from digital transformation. With modern tech, it is typically much easier to securely access and manipulate data that can be used to unlock valuable insights about customers, competitors, and internal processes.

Better Resource Management

Digitally-powered businesses use hundreds of apps and store data in multiple places. The lack of interoperability and data silos can make business hard. Digital transformation involves integrating these digital tools, allowing you to consolidate dispersed data sets and apps.

Improves Team Collaboration

Adding the right digital collaboration tools to your toolkit can be critical to building a collaborative environment in the workplace. They allow teams to collaborate outside the office space or country. If your team is spread across time zones, you can use async communication tools for better collaboration.

Increases Scalability

Digital transformation gives you the flexibility to grow faster. It can help reduce time to market and make product or service improvements faster. You can also serve clients in a larger geographic area and communicate with your clientele more effectively.

What Does it Take to Create Digital Transformation?

Digital transformation needs more than just technical expertise. It’s a massive undertaking where multiple factors contribute to your success.

Here are things to focus on when transforming your business digitally:

Digital First Culture

Transforming your business requires agility and an attitude to pursue the latest technologies proactively. Building a digital-first culture, where employees proactively look for opportunities to use digital solutions to help the business achieve its goals, is critical to successfully transforming your business.

Culture is a critical part of Gartner’s ContinuousNEXT approach to digital transformation. The Gartner experts who coined the term cite culture as a major barrier — 46% of CIOs identify culture as the most significant barrier to digital transformation.

A report by MIT and Capgemini explains that focusing on the following seven cultural attributes can be vital to building a digital-first culture:

  • Innovation: The prevalence of behaviors that support taking risks, thinking disruptively, and exploring new ideas.
  • Digital-first mindset: A mindset where everyone, by default, thinks of digital solutions first.
  • Customer-centricity: The use of digital tools to improve customer experience, expand the customer base, and co-create new products.
  • Open culture: The extent of partnership with third parties, including vendors and customers.
  • Agility and flexibility: Decision-making speed, dynamism, and your company’s ability to adapt to evolving market demands and technologies.
  • Data-driven decision-making: The use of data to make better decisions.
  • Collaboration: The strategic creation of teams to make the best use of the company’s human resources.

Change Management

Often, the most overlooked aspect of a digital transformation is the amount of change management and capability development required to enable team members to excel in their new or evolved roles. One takeaway that we’ve learned from our experience is the need to have a strong leadership commitment and a high level of conviction and alignment across the senior leadership team on the transformation objectives, priorities, and plan to undertake the transformation effort at an organization. .

When communicating a change, remember that the benefits of change may be evident to you. Yet, your team might see change as a signal to step out of a workflow they’re comfortable with and learn new skills.

Resistance will snowball when one employee who feels that way communicates with colleagues. Change management can help prevent or at least minimize this resistance to change.

Here are three critical elements of managing change:

  • Plan before you start: Change management should start before digital transformation. Risk analysis and assessing the organization’s readiness are great ways to lay the foundation for your change management strategy. They involve identifying organizational attributes like culture and characteristics of change.
  • Change management: This is where you go from planning to execution. You keep communicating your digital transformation plans, address concerns regarding the plan, and train employees.
  • Feedback: Change management doesn’t end after executing your change management strategy. Seek feedback from employees about the change. If you see reluctance, take corrective actions to ensure resistance doesn’t snowball.

Data-Driven Organization

Digital transformation is highly data-driven. Managing data — storing and processing data and ensuring data integrity — are one of the first things you’ll need to work on when you start the digital transformation process.

Data provides a unique insight into your operations. Once you’ve achieved a higher level of operational transparency and gained a deeper understanding of core business processes using data, you’ll be able to identify barriers to digital transformation. Data will also enable you to improve and optimize your transformation strategy continuously.

Companies like Airbnb and Amazon hold massive volumes of data. These companies are great examples of data-driven organizations. This data allows them to personalize customer experiences and stay one step ahead of the competition.

Emphasis on Quality

When you’re adamant about delivering quality, you’ll need to ask yourself — is the business prepared to ensure a high level of quality during the digital transformation journey?

Going all in at once is a bad idea. Digital transformation requires an incremental approach where you plan, test, and validate ideas every step of the way. This will allow you to stay prepared for potential pitfalls and optimize your strategy as you go. You’ll avoid complete disasters, which can result in loss of money, trust, and reputation.

Taking an incremental approach makes your digital transformation journey smoother and ensures you maintain high quality throughout the transformation process.

Begin Your Digital Transformation Journey

Digital transformation can be challenging to navigate without an experienced partner.

At Blanc Labs, we understand each organization has unique needs. We offer advisory and consulting services to gain a complete understanding of your most pressing challenges and help you start your digital transformation journey.

Book a discovery call with us today to learn more.

Healthcare Interoperability: Challenges and Benefits

Healthcare | FHIR | Interoperability | IT Management

Healthcare Interoperability: Challenges and Benefits

May 26, 2023
Interoperability

The American Recovery and Reinvestment Act (ARRA) of 2009 provided hospitals and health professionals incentives to use electronic health record technology. Healthcare organizations quickly moved healthcare records to digital applications, providing an opportunity to use this data cohesively through healthcare interoperability.

ARRA has been the driving force behind the digitization of healthcare records in the recent past. The problem? Software vendors developed various applications for the healthcare industry. The result was data silos stored in disparate systems.

Healthcare interoperability is a step towards developing a digital ecosystem for the healthcare industry, where data can be exchanged and accessed securely without  boundaries.

What is Healthcare Interoperability?

Interoperability removes the barriers in information exchange introduced by differences in technology, architecture, and vendors.

Seamless access to healthcare data is critical. The inability to access healthcare records during an emergency can result in adverse outcomes.

Moreover, information blocking can result in penalties of up to $1 million per violation.

Keeping health data secure is just as important as the ability to share it. That’s why healthcare interoperability requires a careful approach. The combined use of APIs (Application Programming Interfaces) and information standards like FHIR and HL7 can help healthcare companies make the best use of electronic records while ensuring data integrity.

Healthcare interoperability allows clinicians to provide better care and coordinate with other clinicians. It provides clinicians and other healthcare providers with a standardized way to collect and report public health data.

Collectively, these factors can improve patient outcomes and safety, minimize the risk of error, and increase the efficiency of internal processes.

Levels of Healthcare Interoperability

The Healthcare Information and Management Systems Society (HIMSS) has defined four levels of healthcare interoperability. Each level represents a type of data exchange.

Foundational Interoperability

Foundational interoperability (or simple transport) is the most basic type of interoperability. A system transfers data to another system without interpreting or changing its format.

For example, you download a patient’s public health record and manually enter those details into your proprietary software.

Structural Interoperability

Structural interoperability (or structured transport) involves interpretation. Systems exchange data and, when needed, convert it to a standardized format for interpretation.

The information uses a standard syntax and organization, so it’s easier for the receiving system to detect and interpret specific fields.

FHIR and HL7 provide structural interoperability, allowing you to move information across systems seamlessly.

Semantic Interoperability

Exchanging and interpreting data with entirely different data structures requires semantic interoperability (or semantic transport).

Suppose you receive a scanned image of a patient’s medical report. The information in this image must be converted into text fields before it can be imported into your system.

Extracting the information from one system, structuring it so that another system understands the extracted information, and automatically filling out the right data in the right fields requires artificial intelligence (AI).

A combination of technologies like optical character recognition (OCR), robotic process automation (RPA), and AI can help achieve full semantic interoperability like so:

  • OCR extracts the information from the image: The information in the patient’s report like their name and blood group is extracted.
  • AI-based technologies like NLP and machine learning (ML) help interpret the extracted information: The information may not always be in a standard format. For example, the numbers in your blood report may be written as 10^9 or 109. NLP will help the system understand that both of these mean the same thing.
  • RPA populates the relevant data in the recipient system: Once the system interprets this information, RPA automatically adds this information to the recipient system.

Organizational Interoperability

Organizational interoperability is the highest level of interoperability.

It facilitates sharing and interpreting healthcare data securely, seamlessly, and in a timely fashion between organizations, entities, and individuals, with governance, policy, social, legal, and organizational considerations factored in.

Organizational interoperability is the goal. But most healthcare companies are still working on achieving foundational and structural interoperability.

Once organizations have achieved lower levels of interoperability, they’ll have a strong foundation for achieving organizational interoperability and other ways to improve health data exchange.

Navigating the journey from foundational to organizational interoperability is fraught with challenges, but these can be overcome with careful planning and strategizing. Read more here.

What is FHIR?

Fast Healthcare Interoperability Resources (FHIR) is a healthcare data standards framework developed by HL7 (Health Level 7). The FHIR provides a standard framework to make transferring healthcare data between systems easier.

FHIR consists of resources like health data formats and elements (such as conditions and medications) that you can exchange easily. It also provides standardization for APIs.

Modern healthcare benefits from FHIR in multiple ways. It facilitates exchanging information with legacy applications, but that’s not the only reason to use FHIR.

The Blue Button 2.0 API, which allows accessing healthcare information, is based on FHIR. The FHIR standards framework is a key component of the United States’ national interoperability roadmap.

If your healthcare business receives payments for Medicare or Medicaid, using FHIR for interoperability is critical.

Data from an Engineer Group survey commissioned by Change Healthcare suggests that only 24% of healthcare companies were using FHIR APIs at scale in 2021. However, the research suggests widespread adoption by 2024.

As more healthcare providers start using FHIR APIs, they’ll be able to use and provide patients with a richer set of functionalities.

4 Challenges with Healthcare Information Exchange

The current low rate of interoperability is a result of the challenges associated with healthcare information exchange. Below are four of the most pressing challenges that stand in the way of healthcare organizations achieving interoperability.

Inconsistent Data

Healthcare organizations generate data from multiple, disparate sources. These sources typically store data in the database in various formats and data types that are incompatible with each other.

When systems exchange incompatible data types, the recipient system can’t interpret the information. For example, medical records may contain the patient’s medical history and treatment plan. The recipient system must interpret this information to be able to use it.

Maintaining Client Data Confidentiality

Ensuring the confidentiality of patient health records is critical to maintaining a good reputation and, more importantly, complying with HIPAA (Health Insurance Portability and Accountability Act).

Electronic health records (EHR)  need a secure mechanism to validate requests for patient information.

Many providers use systems that may or may not be compatible with EHR products, which can potentially result in a breach of regulations like HIPAA.

Once the ONC’s Cures Act Final Rule comes into force, healthcare providers will need to comply with its new training and certification requirements too.

Personal health information (PHI) breaches can be a recipe for losing reputation and heavy penalties.

Conflict of Interest

Not all businesses want to share patient data because you’ll often need to share information with a direct competitor.

For example, if you’re a hospital, you’ll understandably be reluctant to share patient data with urgent care clinics.

Regulations are the best solution to this challenge. The Cures Act has various information-blocking provisions that will compel healthcare providers to provide information when appropriate.

Cost of Hiring an Interoperability Specialist

Achieving interoperability is expensive because it requires specialists that dedicate their time to maintain interoperability.

Of course, this person needs the right qualifications and experience handling interoperability-related tasks.

If you make some rough calculations, you’ll see just how expensive hiring this specialist can be. The cost makes providers, especially smaller healthcare businesses, rethink the feasibility of interoperability.

The solution to this problem is simpler than the previous ones. Instead of hiring a person, you can invest in an automated interoperability system that takes care of most tasks.

An automation system costs significantly less than hiring a specialist in the long term.

5 Benefits of Healthcare Interoperability

The benefits of healthcare interoperability far outweigh the cost of addressing the challenges. Here are the five benefits healthcare interoperability offers.

Improves Patient Outcomes and Experience

Healthcare interoperability isn’t just a regulatory burden. It’s an asset you can build to improve patient outcomes and experience.

As life expectancy rises, interoperability will prepare you for value-based patient care. Real-time access to a patient’s medical history allows you to get a deeper insight into the patient’s condition and minimize medical errors.

Data access also reduces duplication of efforts. Since you’ll have the information about diagnosis, tests, and results, you can directly start working on developing a treatment plan or running other tests.

You’ll know about the patient’s allergies and health plan before starting treatment so that you can provide appropriate advice.

These factors collectively improve the patient’s experience and allow you to provide better care.

Reduces Cost of Care

Interoperability reduces the cost of care in multiple ways:

  • Streamlines care delivery: Better coordination among healthcare providers streamlines care delivery. You won’t have to repeat tests, and you’ll have the information about the previous diagnosis and treatment.
  • Minimizes errors: Interoperability reduces the cost of care by minimizing medical errors.
  • Increased productivity: Your administrative staff won’t have to reenter the same data over and over once you’ve achieved interoperability. Your team saves time on manual data entry when you use technologies like intelligent document processing (IDP) to convert physical documents into digital files.

Collectively, these factors can help reduce the cost of care by a good margin. You can transfer these savings to your patients to offer them more value at a lower cost.

Keeps Patient Data Secure

Patients trust that their data is safe with healthcare providers. Compromising this data’s integrity can result in a loss of reputation. Ensuring data integrity is also a compliance requirement.

Hundreds of electronic medical records are compromised daily. As many as 54,396 individuals were affected just by a single breach at the NewYork-Presbyterian Hospital on March 20, 2023.

Your systems need to be HIPAA-compliant. The best interoperability partners are experienced in creating compliant interoperability solutions, which is reassuring when implementing a complex technological solution with legal implications.

Contributes to Research

The data you collect during regular business, like diagnosing, testing, and treating patients can be an asset for public health researchers.

Interoperability allows researchers to request data from your systems for studies in various medical fronts like epidemiology and pathology.

This helps build a good reputation. You can add the fact that you share data with scientists to contribute to society and build goodwill for your healthcare business.

Minimizes Burnout

Digital transformation generally makes processes faster and easier. But the situation with EHR adoption is a little different.

The administrative load on physicians has increased significantly because of compliance requirements and disparate solutions used by clinicians.

That’s where interoperability helps. It allows you to automate mundane labor-intensive tasks like data entry.

With less time spent on time-consuming and repetitive tasks, your administrative staff won’t reel under the pressure of EHR compliance requirements. Addressing burnout also reduces the probability of human error.

Start Your Interoperability Journey with Blanc Labs

Achieving structural interoperability offers various benefits. Selecting a partner with extensive experience managing APIs is critical to reaping the full benefits of structural interoperability and frictionless implementation.

Blanc Labs are experts at building standards-based interoperability solutions that enable healthcare organizations to improve patient outcomes, enhance efficiency and achieve seamless integration within the health ecosystem.

Book a discovery session with Blanc Labs to learn how we can help your healthcare business achieve interoperability.

Navigating the Healthcare Interoperability Journey

Healthcare | Digital Transformation | Interoperability | IT Management

Navigating the Healthcare Interoperability Journey

May 18, 2023
Interoperability journey

The journey of navigating healthcare interoperability is a critical one, and an incredibly complex endeavor. Healthcare organizations must tackle big tasks like accessing exchange networks, mapping messages across systems, and integrating with multiple data sources while also operating within tight compliance rules. It can be especially daunting for executives tasked with ensuring successful implementation. If this describes you or someone on your team, don’t worry—there are ways to ensure success as you undertake the process of achieving healthcare interoperability.

In this article we explain what it means to embark on an interoperability journey and how best to implement it throughout an enterprise organization.

Stage 1: Strategy and Roadmap

Beginning the healthcare interoperability journey involves addressing key pain points, such as:

  1. A lack of common standards and communication protocols between existing health systems like Electronic Medical Record (EMR), Laboratory Information Systems (LIS), etc.
  2. Limited IT budgets and minimal underlying infrastructure
  3. A shortage of interoperability-focused resources

To tackle these challenges, the first step is to create a well-defined strategy, followed by a comprehensive gap analysis and a dynamic roadmap aimed at ensuring regulatory compliance and achieving seamless integration of healthcare data. A crucial aspect of this journey is addressing the CMS (Centers for Medicare and Medicaid Services) mandate that requires healthcare organizations to adopt and implement interoperability standards.

At this stage of the interoperability journey, organizations move from having disconnected data systems to making data organized and manageable. Applications of interoperability at this stage include patient-centered care.

The importance of securing curated and standardized health data

Securing curated and standardized data is crucial in ensuring that information is both organized and meaningful, particularly in the context of patient-centered care. By utilizing a data curation process, healthcare providers can effectively gather, annotate, and maintain relevant datasets that accurately represent patients’ medical histories, conditions, and preferences. This process often involves removing inconsistencies or inaccuracies, as well as integrating data from various sources into one unified platform. Standardizing this data in accordance with industry regulations or established protocols, such as the International Classification of Diseases (ICD) or Systematized Nomenclature of Medicine – Clinical Terms (SNOMED CT), enables seamless communication and the exchange of information.

Furthermore, the implementation of advanced security measures, including encryption and robust access controls, helps protect sensitive patient information from unauthorized access or potential breaches, adhering to privacy standards like the Health Insurance Portability and Accountability Act (HIPAA). Altogether, the rigorous curation, standardization, and security of data serve as foundational elements in the journey to interoperability.

Stage 2: Validating Strategy

The journey towards interoperability maturity is a complex and ongoing process, requiring healthcare organizations to regularly validate their strategies and roadmaps, align budgets with evolving business needs and technological advancements, and comply with CMS mandates. Achieving interoperability maturity involves focusing on core aspects such as:

  • Enabling seamless communication and coordination between disparate systems
  • Instituting a robust data management plan with accurate data mapping
  • Leveraging cutting-edge API technologies to address diverse use cases efficiently

Organizations must stay ahead of the curve by continuously assessing and refining their interoperability efforts with industry best practices and regulatory requirements as benchmarks. This iterative approach ensures that organizations can consistently drive improvements in care delivery, patient satisfaction, and long-term healthcare outcomes.

By this stage in the interoperability journey, companies graduate from simply having organized data systems to making them data analytics ready. This enables organizations to track patients over a longer period and participate in integrated healthcare.

Interoperability journey

Stage 3: Developing and end-to-end ecosystem for healthcare interoperability

The last stage in the healthcare interoperability journey is about addressing the alignment between business and technology objectives. A fundamental aspect of this stage is obtaining leadership buy-in, thereby empowering organizations to extend their interoperability initiatives beyond what is mandated by regulatory and industry requirements.

By focusing on enabling a comprehensive end-to-end solution for interoperability, organizations can leverage the potential of emerging standards, such FHIR, to facilitate seamless intra- and cross-organizational data exchange. Additionally, investing in the development of an Application Programming Interface (API)-driven ecosystem allows organizations to foster a highly connected, flexible, and scalable technology infrastructure that promotes innovative and improved patient-centric care services.

In the final stage of the healthcare interoperability journey, organizations are in the position to develop data driven applications (e.g predictive analytics, advanced reporting, population health management, etc.) using the latest technologies like AI to improve patient outcomes, enhance operational efficiency & increase profitability.

Get Started on your Healthcare Interoperability Journey with Blanc Labs

Interoperability can seem daunting, especially when trying to make sense of the entire journey. However, if approached methodically and incrementally with a well-thought-out strategy and roadmap, the end result can be a more secure, efficient, and user-centric system. Starting with developing the vision for an ecosystem that works for both you and your customers should give you confidence for making investments in interoperability technologies.

To understand how the interoperability journey will apply to your organization, simply speak to an expert from Blanc Labs today.

Using RPA in Banking

Financial Services | AI | Banking Automation | Digital Banking | Enterprise Automation

Using RPA in Banking

May 8, 2023
Using RPA in Banking

 

All banking or financial institutions can relate to the struggle of managing piles of structured and unstructured data daily. This task requires repetitive and manual effort from your employees that they could otherwise dedicate to high-value work. It can also be time-consuming and prone to errors, ultimately hampering your bank’s customer experience. Fortunately, automation technologies are proving to be a boon for the finance sector.

The finance domain is experiencing a major transformation, with banking automation and digitization at the forefront. According to a study by McKinsey, machines will handle between 10% to 25% of banking functions in the next few years, which can free up valuable time and resources for employees to focus on more strategic initiatives.

What is Robotic Process Automation (RPA)?

RPA is an automation technology governed by structured inputs and business logic. RPA in banking is a powerful tool that can automate repetitive and time-consuming tasks. It allows banks and financial institutions to gain a competitive advantage by automating routine tasks cost-effectively, fast, and without errors.

Banks, credit unions, or other financial institutions can set up robotic applications to handle tasks like capturing and analyzing information from documents, performing transactions, triggering responses, managing data, and coordinating with other digital systems. The possibilities for using RPA in finance are innumerable  and can include a range of functionalities such as generating reports, sending auto emails, and even auto-decisioning.

How RPA works

Robotic Process Automation works by automating repetitive and routine tasks that are currently performed manually. Software robots, also known as ‘bots,’ are designed to mimic human actions and interactions with digital systems. These rule-based bots can be configured to perform specific tasks, such as document processing, data entry, transaction execution, complete keystrokes, and more.

Once a bot is configured, it can be triggered to run automatically or on a schedule, freeing up human resources to focus on customer service or other higher-value or strategic activities. The bot interacts with the relevant systems and applications, capturing and analyzing data, navigating systems, and automating workflows as needed.

One of the key advantages of RPA in finance is that it is non-intrusive, meaning that it operates within existing systems and processes, without requiring any changes to the underlying infrastructure. This means that no changes are made to the underlying applications. RPA bots perform tasks in a similar manner  to employees- by signing into applications, entering data, conducting calculations, and logging out. They do this at the user interface or application surface layer by imitating mouse movements and the keystrokes made by employees.

This makes it easier to implement and reduces the risk of disruption to existing operations. As per Forbes, RPA usage has seen a rise in popularity in the last few years and will continue to see double-digit growth in 2023.Many people use the terms ‘RPA’ and ‘Intelligent Automation’ (IA) interchangeably. Both are banking automation technologies that improve efficiency, but are they the same?

Are RPA and Intelligent Automation the same?

No, RPA is not IA and IA is not RPA. While RPA is a rule-based approach for everyday tasks, intelligent automation uses Artificial Intelligence (AI) and Machine Learning (ML) technologies to automate more complex and strategic processes. IA encompasses a wide range of technologies which includes RPA. IA enables organizations to automate not just manual tasks but also decision-making processes and allows for continuous improvement through self-learning.

A combination of IA and RPA can unlock the true potential of banking automation. When RPA is combined with the powers of AI, ML, and natural language processing, it dramatically increases the software’s skills to execute advanced cognitive processes like understanding speech, carrying out conversations, comprehending semi-structured tasks such as purchase orders, invoices and unstructured documents like emails, text files and images.

Thus, RPA and its combination technologies are fully capable of taking your banking and financial business to new heights.

What are the benefits of RPA in Banking?

The global RPA market is projected to grow at a CAGR of 23.4%, from $10.01 Billion in 2022 to $43.2 Billion in 2029. Evidently, more industries worldwide are realizing the importance of RPA. Here are some benefits of using RPA in banking and financial institutions.

Improved Scalability

Robots can work faster and longer than humans without taking breaks. RPA can also be scaled to meet changing business needs, making it an ideal solution for organizations that are looking to grow and expand their operations and provide additional services.

Enhanced Compliance and Risk Management

RPA can help banks and financial institutions improve their compliance and risk management processes. For example, the software can be configured to monitor transactions for potential fraud and to ensure compliance with regulatory requirements. It can also inform the bank authorities in case any anomaly is found.

Improved Customer Service

RPA can enable faster and more personalized service to customers. For example, the software can be configured to handle routine customer inquiries and transactions, reduce wait times and improving the overall customer experience.

Increased Efficiency

RPA can automate repetitive and manual tasks, redirecting human resources to other higher-value and strategic activities. This can result in faster processing times, improved accuracy, and reduced costs. According to a study by Deloitte, banking institutions could save about $40 million over the first 3 years of using RPA in banking.

Better Data Management

RPA can automate the collection, analysis, and management of data, making it easier for banks and financial institutions to gain insights and make informed decisions. This means faster account opening or closing, loan and document processing, data entry, and retrieval.

Top Use Cases of RPA in Banking

RPA can be applied in several ways in the banking and finance industry. Here are some examples of RPA use cases in banking and finance:

Accounts Payable

RPA can automate the manual, repetitive tasks involved in the accounts payable process, such as vendor invoice processing, field validation, and payment authorization. RPA software in combination with Optical Character Recognition (OCR) can be configured to extract data from invoices, perform data validation, and generate payment requests, reducing the risk of errors and freeing up human resources.  This system can also notify the bank in case of any errors.

Mortgage Processing

Mortgage processing involves hundreds of documents that need to be gathered and assessed. RPA can streamline the mortgage application process by automating tasks such as document verification, credit checks, and loan underwriting. By using RPA to handle routine tasks, banks, and financial institutions can improve processing time, reduce the risk of errors, and enhance the overall customer experience.

Fraud Detection

According to the Federal Trade Comission (FTC), banks face the ultimate risk of forgoing money to fraud, which costs them almost $8.8 billion in revenue in 2022. This figure was 30% more than than what was lost to bank fraud in 2021 .  RPA can assist in detecting potential fraud by automating the monitoring of transactions for unusual patterns and anomalies. Bots can be configured to perform real-time ‘if-then’ analysis of transaction data, flagging potential fraud cases as defined for further investigation by human analysts.

KYC (Know Your Customer)

RPA can automate the KYC onboarding process, including the collection, verification, and analysis of customer data. RPA software can be configured to handle routine tasks such as data entry, document verification, and background checks, reducing the risk of errors and faster account opening, thus resulting in enhanced customer satisfaction.

Thus, using RPA in your bank and financial institution can not only save time and money but also boost productivity. Banking automation gives you a chance to gain a competitive edge by leveraging technology and becoming more efficient.

Blanc Labs Automation Solution for Banks

Blanc Labs helps banks, credit unions, and financial institutions with their digital transformation journey by providing solutions that are RPA-based. Our services include integrating advanced automation technologies into your processes to boost efficiency and reduce the potential for errors caused by manual effort.

We offer a tailored approach that combines RPA, ML, and AI to automate complex tasks, such as mortgage processing and document processing, allowing you to conserve resources, speed up decision-making  and provide quicker and improved financial services to your customers.

If your bank processes a huge amount of data everyday, we can help you. Book a discovery call with us and let us explain how we can increase the efficiency of your bank’s core functions. Our team will analyze your current processes and propose a tailor-made automation solution that can operate seamlessly and in conjunction with your existing systems.

How to Automate Loan Origination Systems

Financial Services | AI | Banking Automation | Digital Banking | Lending Technology

How to Automate Loan Origination Systems

May 1, 2023
Loan Origination Systems

Loan origination automation is critical because the loan origination process is labor-intensive and prone to human error.

Translation?

The process takes expensive human capital that you can dedicate to other, more strategic tasks. It’s also prone to human error, which increases your costs and puts your reputation at risk.

Automating the process takes humans out of the equation, minimizing the cost of human capital and the risk of human error.

In this article, we explain how to automate the process using an automated loan origination system.

What is the Loan Origination Process?

Loan origination is the process of receiving a mortgage application from a borrower, underwriting the application, and releasing the funds to the borrower or rejecting the application.

When a customer applies for a mortgage, the lender initiates (or originates) the process necessary to determine if a borrower should be lent funds according to the institution’s policies.

The process is extensive and takes an average of 35 to 40 days. The origination process involves five steps, as explained below.

Prequalification

Prequalification is a screening stage. This is where lenders look for potential reasons that can adversely impact a borrower’s capability to repay the loan.

Typically, lenders look for things like:

  • Income: Does the borrower make enough money to be able to service the loan payments, and is that income consistent?
  • Assets: Should the borrower’s income stop for some reason; do they have enough assets to remain solvent given their existing liabilities?
  • Debt: Is the borrower overleveraged? Are the debts secured or unsecured?
  • Credit record: Has the buyer made loan payments on time in the past?

These factors help the lender determine if they should spend time processing the application further.

Preparing a Loan Packet

Lenders create a packet (essentially a file of documents) for prequalified borrowers.

The packet includes the borrower’s documents, including KYC, financial statements, and other relevant documents that provide an overview of the borrower’s debt servicing capability.

Lenders also include documents that highlight the reasons that make an applicant eligible or ineligible to be considered for the loan.

For example, the lender may include the borrower’s debt-to-income ratio, properties and assets at market value, and income streams to provide an overview of whether the borrower is a good candidate for the loan.

Some lenders take extra steps to double-check the applicant’s claims.

For example, lenders might hire a valuer or research property rates to verify your real estate investment’s current market value. The valuer’s report is added to the packet for the underwriter’s reference.

Negotiation

Many borrowers, especially those with an excellent credit record, browse their options before accepting a lender’s offer.

The borrower might want to negotiate a lower rate or ask for a fixed rate instead of a floating rate.

Term Sheet Disclosure

A term sheet is a summary of the loan. It’s a non-binding document that contains the terms and conditions of the mortgage deal.

The term sheet includes the tenure, interest rate, principal amount, foreclosure charges, processing fees, and other relevant details.

Loan Closing

If the negotiations go well and the borrower accepts the offer, the lender closes the loan.

The lender creates various closing documents, including final closing disclosure, titling documents, and a promissory note.

The borrower and lender sign the documents, and the lender disburses the funds as agreed.

3 Ways to Automate Loan Origination

Now that you know the loan origination process, let’s talk about automating parts of this process to make it more efficient.

Digitizing Loan Applications

You can create an online portal where applicants can initiate a loan application and upload their KYC and other documents.

The documents are automatically transferred to your internal systems for prequalifying the applicant.

IDP extracts and relays the applicant’s data from the documents to your system.

Once the data is in the system, robotic process automation (RPA) can be used to determine if an applicant should be prequalified.

You can use a machine learning (ML) algorithm for deeper insights.

ML can help identify characteristics that make a person more or less likely to service the loan until the end of the term, allowing you to make smarter decisions.

Assembling Loan Documentation

Cloud-based RPA can collect documents from the online portal and organize them in one location. Not only are digital copies faster to collect, but they’re easy to store and search.

Think about it. You’ve received an application, but it’s missing the cash flow statement for last year. You’ll need to email or call the applicant to upload the documents, wasting your and the applicant’s time.

Lenders typically have a document checklist. Automating checklists is easy with RPA — when the applicant forgets to upload a document, the RPA can trigger notifications to the applicant.

The system can also notify the loan officer if the applicant becomes non-responsive.

Speeding Up Underwriting

Borrowers want faster access to funds, but lenders must complete their due diligence.

Lending automation can help reduce the time between application and approval.

With technologies like artificial intelligence (AI), ML, and RPA, automation systems can assess an applicant’s creditworthiness within seconds.

RPA can help with basics like checking the minimum credit score and income levels. RPA can also flag any areas that indicate greater risk, such as excessive variability in the applicant’s cash flows.

Moreover, loan origination is a compliance-heavy process. It’s easy to forget a small step when you’re overwhelmed with loan applications.

RPA ensures all compliance steps are taken care of. If they’re not, the system can trigger alerts for the underwriter as well as the superiors.

AI and ML can provide deeper insights. These technologies can use big data to identify patterns that make a borrower more likely to default, allowing you to make smarter decisions fast.

Moreover, AI and ML can help you look beyond credit scores and find people that are more creditworthy than their credit scores suggest.

As Dimuthu Ratnadiwakara, assistant professor of finance at Louisiana State University, explains:

“Traditional models tend to lock anyone with a low credit score—including many young people, college-educated people, low-income people, Black and Hispanic people and anyone who lives in an area where there are more minorities, renters and foreign-born—out of the credit market.”

How Shortening Loan Origination With Automation Helps

Shortening the loan origination process benefits you in multiple ways:

  • Match customer expectations: You’ll deliver on the customers’ expectations by offering faster loan processing. 40% of mortgage customers are willing to complete the entire process using self-serve digital tools, but 67% still interact with a human representative via phone.
  • Deliver better experiences: Automation offers various opportunities to improve customer experience. For example, you can set up an AI chatbot that responds to customers’ questions in real time.
  • Increase efficiency: You can process more applications per month by automating loan origination.
  • Better use of your staff’s time: Automated workflows allow credit officers to focus on parts of the business that require a human touch, such as building stronger relationships with clients, than on repetitive tasks that automation can perform more accurately.

Loan Origination Automation with Blanc Labs

Selecting the right partner to set up loan origination automation is critical. Partnering with Blanc Labs ensures frictionless implementation of a personalized loan origination system.

Blanc Labs tailor-makes solutions best suited for your needs and workflow. Blanc Labs starts by assessing your needs and creating a strategy to streamline your loan origination processes. Then, Blanc Labs creates an automation system using technologies like RPA, AI, and ML.

Book a demo to learn how Blanc Labs can help you automate your loan origination workflow.

10 Tips to Successfully Implement RPA in Finance

Financial Services | AI | Banking Automation | Digital Transformation | Enterprise Automation

10 Tips to Successfully Implement RPA in Finance

April 14, 2023
RPA in Finance

Automation has taken the finance industry by storm, and for all good reasons. Banking automation technologies like Robotic Process Automation (RPA) come with the promise of streamlining processes and increasing efficiency.

According to Forbes, RPA has the potential to transform the way finance functions, from reducing manual errors to freeing up valuable resources. To help you maximize the benefits of RPA in finance, we’ve put together a list of 10 tips for successful implementation. But first, let’s take a step back and explore what RPA is.

What is Robotic Process Automation (RPA)?

RPA is the use of software robots to automate routine and repetitive tasks like document processing, freeing up employees to focus on strategic activities that can lead to better customer service or innovations that could meet customer expectations.

The bots are programmed to follow specific rules and procedures to complete a task, just like an employee. They can interact with various software applications and systems, such as spreadsheets and databases, to collect and process data. The bots can also make decisions, trigger responses, and communicate with other systems and software.

When a task is triggered, the bot performs it automatically, eradicating the scope of errors that may be produced through manual processes. The process is monitored and managed by a central control system, allowing adjustments and updates to be made as needed.

Think of RPA as a digital workforce, working tirelessly in the background to complete tasks that would otherwise take hours to complete. With RPA in finance, your financial institution can increase efficiency, reduce costs, and improve the accuracy of its processes.

The Use of RPA in Banking Automation

There are many ways in which RPA can be used in banking automation. Here are some of them:

Customer Service Automation

RPA is capable of automating routine customer service tasks such as account opening, balance inquiries, and transaction processing, allowing bank employees to focus on more complex customer needs.

Loan Processing

RPA in banking and finance can streamline the loan processing workflow by automating repetitive tasks such as document collection and verification, credit score analysis, and loan decision-making.

Fraud Detection and Prevention

In 2022 alone, banks and financial institutions lost $500K to fraud. Technologies like RPA can analyze vast amounts of data to detect and prevent fraud in real-time, improving the accuracy and speed of fraud detection. It may also report any suspected fraud to the banking authorities as soon as it is discovered.

KYC and AML Compliance

Verification and compliance document processing can eat up a major share of your institution’s resources. RPA can automate the process of collecting, verifying, and analyzing customer information, helping banks to comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations.

Back Office Operations

RPA can automate various back-office tasks such as data entry, reconciliation, report generation, monthly closing, and management reports, freeing up employees to focus on more strategic initiatives.

Payment Processing

Manual data entry in payment processing can lead to manual errors and longer processing time. RPA can automate the payment processing workflow, including payment initiation, authorization, and settlement, reducing the risk of errors and improving efficiency.

Risk Management

Banks and financial institutions are constantly at risk from various sources. RPA in finance can help institutions identify, assess, and manage risks by automating data collection, analysis, and reporting, improving the accuracy and speed of risk assessments.

Internal Compliance Monitoring

RPA can automate the process of monitoring and reporting on compliance with internal policies and regulations, reducing the risk of non-compliance and improving overall compliance management.

The potential of RPA in banking and finance is unlimited. When combined with Intelligent Automation technologies, RPA can leverage Artificial Intelligence (AI) and Machine Learning (ML) to provide more intelligent process automation. While the technology in itself is efficient, financial institutions must know how to implement it for maximized benefit.

10 Tips for Successfully Implementing RPA in Finance

According to the Deloitte Global RPA survey, 53% of organizations who took part in the survey have already begun their RPA implementation. The number is expected to rise to 72% over the next year. Entering the RPA race can be quick, but managing and scaling it is a different ball game. Before getting started with automation initiatives, it is important to consider the following tips.

Start Small

While RPA might seem useful to rejuvenate all of your systems and processing, it is important to consider the business impact and start small. Beginning with a smaller project, for example, a single process or department can help build momentum and demonstrate the benefits of RPA. It also allows the organization to gain experience and develop a better understanding of the technology before scaling up.

Define Clear Goals

The key to successful RPA implementation rests in your goals. Decide what you want to achieve with RPA in consultation with your IT department. Having a clear understanding of the goals and objectives of the RPA implementation will ensure that resources are allocated appropriately and that the project stays on track. Aim for specific, measurable, achievable, relevant, and time-bound (SMART) goals.

Involve Stakeholders

Engaging stakeholders, such as the management, finance employees, and IT, can help build better design and smoother change management for the RPA implementation. It also ensures that the RPA system is well-integrated across departments and addresses the needs and concerns of all stakeholders.

Assess Processes

When a financial institution leverages too many bots to automate processes, it results in a pile of data. They may be tempted to use ML on the data and create a chatbot to make customer queries easier. However, it can lead to  a poorly planned ML project. Thus, a thorough assessment of the processes is critical to ensure that the RPA implementation does not get sidetracked. This assessment should include an analysis of the tasks, inputs, outputs, and stakeholders involved in the process.

10 steps

Choose the Right Tools

Selecting the right RPA tools and technology is critical to the success of the implementation. Decide the mix of automation technologies your institution requires before reaching out to a vendor. Factors to consider include the cost, scalability, and ease of use , as well as its ability to integrate with other systems and applications.

Define Roles and Responsibilities

Clearly defining the roles and responsibilities of the RPA team, including project governance, testers, and users, is important to ensure that everyone knows what is expected of them. Remember that automation is a gradual process, and your employees will still need to interfere if it is not properly automated.

Ensure Data Security

Protecting sensitive data and customer information is a key concern in finance. RPA needs to be implemented in such a way that data security remains unaffected. Discuss with your vendor about strong security measures to ensure that data is protected and that the confidentiality of customer information is maintained.

Plan for Scalability

There are thousands of processes in banks and financial institutions that can use automation. Thus, the RPA implementation should be planned with scalability in mind so that the technology and processes can be scaled up as needed. This helps to ensure that the RPA can be combined with AI and ML technologies as necessary and the implementation remains relevant in the long term.

Monitor and Evaluate Performance

Continuously monitoring and evaluating the performance of the RPA bots is critical to ensure that they are operating effectively and efficiently. Also, do not forget to keep HR in the loop so that employees are informed and trained about the changing processes and how to use them in a timely manner. Regular evaluations should be conducted to identify areas for improvement and to make adjustments as needed.

Foster a Culture of Innovation

Encouraging a culture of innovation and experimentation can help to ensure that the organization is prepared for the future. Consult your IT department and automate your entire development lifecycle to protect your bots from disappearing after a major update. Invest in a center of excellence that can create business cases, measure ROI and cost optimization and track progress against goals.

Implementation Automation with Blanc Labs

At Blanc Labs, we understand that every financial and banking institution has unique needs and challenges when it comes to RPA implementation. That’s why we offer tailor-made RPA solutions to ensure seamless implementation for our clients.

Our RPA systems are designed to be flexible and scalable, allowing our clients to start small and grow as needed. We provide end-to-end support, from process assessment and design to implementation and ongoing assistance, to ensure that our clients realize the full benefits of RPA.

Booking a free consultation with us is the first step toward successful RPA implementation. Our team of experts work closely with each client to understand their specific requirements and goals to build a customized RPA solution to meet their needs.

Banking Automation: The Complete Guide

Financial Services | AI | Banking Automation | Gen AI | ML

Banking Automation: The Complete Guide

April 6, 2023
Banking Automation

Banks are process-driven organizations. Processes ensure accuracy and consistency across the organization. They are also repetitive. Over the past decade, the transition to digital systems has helped speed up and minimize repetitive tasks. But to prepare yourself for your customers’ growing expectations, increase scalability, and stay competitive, you need a complete banking automation solution.

Systems powered by artificial intelligence (AI) and robotic process automation (RPA) can help automate repetitive tasks, minimize human error, detect fraud, and more, at scale. You can deploy these technologies across various functions, from customer service to marketing.

Many, if not all banks and credit unions, have introduced some form of automation into their operations. According to McKinsey, the potential value of AI and analytics for global banking could reach as high as $1 trillion.

If you are curious about how you can become an AI-first bank, this guide explains how you can use banking automation to transform and prepare your processes for the future.

What is Banking Automation?

Banking automation involves automating tasks that previously required manual effort.

For example, banks have conventionally required staff to check KYC documents manually. However, banking automation helps automatically scan and store KYC documents without manual intervention.

Cost saving is generally one of RPA’s biggest advantages.

According to a Gartner report, 80% of finance leaders have implemented or plan to implement RPA initiatives.

The report highlights how RPA can lower your costs considerably in various ways. For example, RPA costs roughly a third of an offshore employee and a fifth of an onshore employee.

You can make automation solutions even more intelligent by using RPA capabilities with technologies like AI, machine learning (ML), and natural language processing (NLP). According to a McKinsey study, AI offers 50% incremental value over other analytics techniques for the banking industry.

With that in mind, let’s look closely at RPA and how it works.

Generative AI and Banking Automation

The latest trend in banking automation is the use of Generative AI.

According to Insider Intelligence’s ChatGPT and Generative AI in Banking report, generative AI will have the greatest impact on data-rich sectors such as:

  • Retail banking and wealth: Generative AI can create more accurate NLP models and help automated systems process KYC documents and open accounts faster.
  • SMB banking: Generative AI can help interpret non-numeric data, like business plans, more effectively.
  • Commercial banking: Generative AI will enable customers to get answers about financial performance in complex scenarios.
  • Investing banking and capital markets: Banks could use generative AI to stress test balance sheets with complex and illiquid assets.

Banks are already using generative AI for financial reporting analysis & insight generation. According to Deloitte, some emerging banking areas where generative AI will play a key role include fraud simulation & detection and tax and compliance audit & scenario testing.

What is RPA?

Robotic process automation, or RPA, is a technology that performs actions generally performed by humans manually or with digital tools.

Say you have a customer onboarding form in your banking software. You must fill it out each time a customer opens an account. You’re manually performing a task using a digital tool.

RPA can perform this task without human effort. The difference? RPA does it more accurately and tirelessly—software robots don’t need eight hours of sleep or coffee breaks.

You can implement RPA quickly, even on legacy systems that lack APIs or virtual desktop infrastructures (VDIs).

Implementing RPA can help improve employee satisfaction and productivity by eliminating the need to work on repetitive tasks.

You can use RPA in banking operations for various purposes.

For example, Credigy, a multinational financial organization, has an extensive due diligence process for consumer loans.

The process was prone to errors and time-consuming. The company decided to implement RPA and automate the entire process, saving their staff and business partners plenty of time to focus on other, more valuable opportunities.

The Need for Automation in Banking Operations

Banks need automation to:

  • Deliver better customer experiences
  • Increase online security
  • Improve decision making
  • Empowering employees

Below, are more reasons for your bank to automate operations.

Why Banks Need Automation

To Deliver Faster, Personalized Customer Experiences

New-gen customers want banks that can provide fast financial services online.

The 2021 Digital Banking Consumer Survey from PwC found that 20%-25% of consumers prefer to open a new account digitally but can’t.

Thanks to the pandemic, the shift to digital has picked up pace. A digital portal for banking is almost a non-negotiable requirement for most bank customers.

In fact, 70% of Bank of America clients engage with the bank digitally. The bank’s newsroom reported that a whopping 7 million Bank of America customers used Erica, its chatbot, for the first time during the pandemic.

A chatbot can provide personalized support to your customers. A level 3 AI chatbot can collect the required information from prospects that inquire about your bank’s services and offer personalized solutions.

A chatbot is a great way for customers to get answers, but it’s also an excellent way to minimize traffic for your support desk.

To Improve Cybersecurity

Cybersecurity is expensive but is also the #1 risk for global banks according to EY. The survey found that cyber controls are the top priority for boosting operation resilience according to 65% of Chief Risk Officers (CROs) who responded to the survey.

Using automation to create a cybersecurity framework and identity protection protocols can help differentiate your bank and potentially increase revenue. You can get more business from high-value individual accounts and accounts of large companies that expect banks to have a top-notch security framework.

Automating cybersecurity helps take remedial actions faster. For example, the automated system can freeze compromised accounts in seconds and help fast-track fraud investigations.

Of course, you don’t need to implement that automation system overnight. With cloud computing, you can start cybersecurity automation with a few priority accounts and scale over time.

For Better Decision Making

AI and ML algorithms can use data to provide deep insights into your client’s preferences, needs, and behavior patterns.

These insights can improve decision-making across the board. For example, using these insights in your marketing strategy can help hyper-target marketing campaigns and improve returns.

Moreover, these insights help deliver greater value to customers. By making faster and smarter decisions, you’ll be able to respond to customers’ fast-evolving needs with speed and precision.

As a McKinsey article explains, banks that use ML to decide in real-time the best way to engage with customers can increase value in the following ways:

  • Stronger customer acquisition: Automation and advanced analytics help improve customer experience. They help personalize marketing across the customer acquisition journey, which can improve conversions.
  • Higher customer lifetime value: You can increase lifetime value by consistently engaging with customers to strengthen relationships across products and services.
  • Lower operating costs: Banks can reduce costs by fully automating document processing, review, and decision-making.
  • Lower credit risk: Banks can screen customers by analyzing behavior patterns that signal higher default or fraud risk.

To Empower Employees

As you digitize banking processes, you’ll need to train employees. Reskilling employees allows them to use automation technologies effectively, making their job easier.

Your employees will have more time to focus on more strategic tasks by automating the mundane ones. This results in increased employee satisfaction and retention and allows them to focus on things that contribute to your topline — such as building customer relationships, innovating processes, and brainstorming ways to address customers’ most pressing issues.

Challenges Faced by Banks Today

Here are some key challenges that banks face today and how automation can help address them:

Inefficient Manual Processes

Manual processes are time and resource-intensive.

According to the 2021 AML Banking Survey, relying on manual processes hampers a financial organization’s revenue-generating ability and exposes them to unnecessary risk.

The simplest banking processes (like opening a new account) require multiple staff members to invest time. Moreover, the process generates paperwork you’ll need to store for compliance.

While you complete the account opening process, the customer is on standby, waiting to start using their account.

The slow service doesn’t exactly make a great impression. Customers want to be able to start using their accounts faster. If you’re too slow, they’ll find a bank that offers faster service.

Automation helps shorten the time between account application and access. But that’s just one of the processes that automation can speed up.

Technologies like RPA and AI can help fast-track processes across departments, including accounting, customer support, and marketing.

Automation Without Integration

Banks often implement multiple solutions to automate processes. However, often, these systems don’t integrate with other systems.

For end-to-end automation, each process must relay the output to another system so the following process can use it as input.

For example, you can automate KYC verification. But after verification, you also need to store these records in a database and link them with a new customer account. For this, your internal systems need to be integrated.

Connecting banking systems requires APIs. Think of APIs as translators. They help two software solutions communicate with each other. A system can relay output to another system through an API, enabling end-to-end process automation.

Increase in Competition

Canadians want more competition in banking. The competition in banking will become fiercer over the next few years as the regulations become more accommodating of innovative fintech firms and open banking is introduced.

An increase in competition will give customers more power. They’ll demand better service, 24×7 availability, and faster response times.

You’ll need automation to achieve these objectives and make yourself stand out in the crowd.

Benefits of Banking Automatios

Benefits of Automation in Banking

Once you invest in automation, you can expect to derive the following benefits:

Improves Operational Efficiency

An error-free automation system can supercharge operational efficiency.

You’ll have to spend little to no time performing or monitoring the process. Moreover, you’ll notice fewer errors since the risk of human error is minimal when you’re using an automated system.

Implementing automation allows you to operate legacy and new systems more resiliently by automating across your system infrastructure. This increases efficiency, consistency, and speed.

Makes Processes Scalable

Banks noticed how automation could be an excellent investment during the pandemic. As explained in a World Economic Forum (WEF) article:

“Through the combination of a distinct data element with robotics process automation, it is possible to generate client documentation from management tools and archives at a high frequency. Due to its scalability, high volumes can be managed more efficiently.”

The article provides the example of Swiss banks. During the pandemic, Swiss banks like UBS used credit robots to support the credit processing staff in approving requests. The support from robots helped UBS process over 24,000 applications in 24-hour operating mode.

In addition to RPA, banks can also use technologies like optical character recognition (OCR) and intelligent document processing (IDP) to digitize physical mail and distribute it to remote teams.

Cost Reduction

Automation helps reduce costs on multiple fronts:

a. Stationery

80% of banks still favor some form of print statements. The cost of paper used for these statements can translate to a significant amount. Automation and digitization can eliminate the need to spend paper and store physical documents.

b. Human error

Human error can require reworks and cause delays in processing customer requests. Errors can result in direct losses (like a lost sale) and indirect losses (like a lost reputation). Minimizing errors can help reduce the cost associated with human error.

c. Increased employee satisfaction

You’ll spend less per unit with more productive employees. Automation can help improve employee satisfaction levels by allowing them to focus on their core duties.

For example, a sales rep might want to grow by exploring new sales techniques and planning campaigns. They can focus on these tasks once you automate processes like preparing quotes and sales reports.

Working on non-value-adding tasks like preparing a quote can make employees feel disengaged. When you automate these tasks, employees find work more fulfilling and are generally happier since they can focus on what they do best.

Happiness makes people around 12% more productive, according to a recent study by the University of Warwick.

As Professor Sgroi explains, “The driving force seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality.”

Customer Satisfaction

Automation can help meet customer expectations in various ways.

Speed is one of the most difficult expectations to meet for banks. You want to offer faster service but must also complete due diligence processes to stay compliant. That’s where automation helps.

61% of customers feel a quick resolution is vital to customer service. As a bank, you need to be able to answer your customers’ questions fast.

How fast? Ideally, in real-time.

A level 3 AI chatbot can help provide real-time, personalized responses to your customers’ questions.

In addition to real-time support, modern customers also demand fast service. For example, customers should be able to open a bank account fast once they submit the documents. You can achieve this by automating document processing and KYC verification.

Better Risk Management

Automation can help minimize operational, compliance, and fraud risk.

Since little to no manual effort is involved in an automated system, your operations will almost always run error-free.

You can also automate compliance processes. For example, you can add validation checkpoints to ensure the system catches any data irregularities before you submit the data to a regulatory authority.

Automation can help minimize fraud risk too. Using AI and ML can help flag suspicious activities and trigger alerts. As this study by Deloitte explains:

“Machine learning can also analyze big data more efficiently, build statistical models quickly, and react to new suspicious behaviors faster.”

Using traditional methods (like RPA) for fraud detection requires creating manual rules. RPA works well in a structured data environment. But given the high volume of complex data in banking, you’ll need ML systems for fraud detection.

Blanc Labs’ Banking Automation Solutions

Blanc Labs helps banks, credit unions, and Fintechs automate their processes. We tailor-make automation tools and systems based on your needs. Our systems take work off your plate and supercharge process efficiency.

Our team deploys technologies like RPA, AI, and ML to automate your processes. We integrate these systems (and your existing systems) to allow frictionless data exchange.

Book a discovery call to learn more about how automation can drive efficiency and gains at your bank.

5 Benefits of Open Banking APIs

Financial Services | API Management | Digital Banking | Integration Readiness | Open Banking

5 Benefits of Open Banking APIs

March 23, 2023
Open Banking APIs

Open banking APIs (application programming interfaces) offer a wide range of benefits for a modern financial institution, from increasing revenue to reducing fraud risk.

Open banking is finding its way into Canada with the government working hard to set regulations by the tentative launch date of January 2024.

In the meantime, financial institutions like yours should start preparing. When open banking is introduced to the public, you should be in a position to roll out products and services faster than competitors and with minimal friction.

Below, we explain the meaning of APIs, the state of open banking in Canada, and how exactly open banking APIs can help your business.

What is Open Banking?

Open banking refers to using APIs to access financial data by third parties in a secure manner.

Customers expect faster, one-stop banking services. So far, customers have relied on third-party services that use screen scraping for non-core banking services like budgeting and financial decision-making.

Screen scraping leaves your customers vulnerable to multiple types of online threats. In a world rampant with cybercrime, your customers want a safer alternative, and that’s where open banking offers value.

With open banking, you can securely allow third parties to access your financial data. For example, suppose a fintech app offers AI-based investment advice.

To offer advice, it needs to look at your current portfolio. You can use open banking to allow the app to access your financial data securely without having to use screen scraping.

This model offers all parties a benefit — you can use the app faster, the fintech can operate with the bank’s license, and the bank can charge a fee for the customer data.

Open Banking in Canada

Open banking is currently unavailable in Canada. The government is developing a roadmap to introduce open banking in Canada safely.

According to the Final Report from the Advisory Committee on Open Banking, the government has established four groups to provide input on the four fundamental aspects of the open banking framework—accreditation, liability, privacy, and security.

The original target date to introduce open banking was January 2023. However, the committee is yet to reach a consensus on multiple aspects.

The Canadian government may take a while to implement open banking. But we’ll likely see key developments in the implementation process over the next few months.

The government has appointed Abraham Tachjian to develop the open banking framework for Canada.

Benefits of Open Banking APIs

While you wait for open banking regulations to become available in Canada, it’s best to prepare your API ecosystem, so you’re ready for open banking when it’s introduced.

Once you have a mature open banking API ecosystem that’s operational, you’ll benefit in the following ways:

Increased Revenue

As a financial institution, you can use open banking APIs to increase revenue in one or more of the following ways:

  • Partnering with Fintechs offering innovative solutions: You can partner with Fintechs to offer innovative solutions without creating, managing, or innovating products and services in-house. The partnership allows you to offer services your customers expect and improve their end-to-end journey. Of course, these services also create new revenue streams for you.
  • Selling to Fintechs: As a bank, you can add another revenue source by providing banking-as-a-service (BaaS), where third parties can connect to your database using APIs for a fee. Third parties can use this data to provide value-add services in addition to what regulators mandate.
  • Optimize your marketing campaigns based on user data: Open banking, combined with data aggregation, provides deeper insights into customers’ behavior and choices. These insights enable you to position your products better and run personalized marketing campaigns, which can increase your overall revenue.

Banking as a Service (BaaS)

Open banking APIs and Banking-as-a-Service are often used interchangeably.

However, they’re fundamentally different. BaaS is a business model where banks integrate their services into a third-party’s product or service.

Fintechs and non-financial companies (NFCs) use BaaS to offer customers better digital banking services, like one-minute loan approvals, without getting their own banking license. This is made possible through open banking APIs.

BaaS is quickly gaining popularity as customer dissatisfaction with banks’ existing services grow. According to Deloitte, 2x ROAA (return on average assets) for banks focused on BaaS offerings.

A few ways you can monetize by proving BaaS include:

  • Providing your banking license, technology, and products to other banks, non-financial companies (NFCs), and aggregators.
  • You can partner with a distributor with excellent end-user relationships to offer innovative financial solutions.
  • You can partner with an aggregator who acts as a provider-aggregator to provide an out-of-the-box solution by coupling the capabilities of multiple vendors.

Payment as a Service (PaaS)

Open banking APIs allow you to build faster, more secure bank rails. Once you implement open banking, you can enable users to make direct payments seamlessly without entering card details.

As a bank, you can use open banking APIs to increase payments’ transparency and scalability by leveraging individual transactions and bi-directional processing.

With open banking APIs, you can upscale your current payment methods like ACH (Automatic Clearing House Network) and wire transfers. APIs will also enable you to offer modern payment methods like Real-Time Payments (RTPs) and Pay-By-Bank when they become available in Canada.

Open banking also facilitates payment initiation service (PIS). When a merchant partners with a licensed third party, the third party can initiate a payment on behalf of a customer’s bank account using PIS.

PIS doesn’t require the customer or merchant to share any sensitive information. The customer simply approves a payment via the banking app with a secret pin or biometric authentication.

Just like any account-to-account transfer, the money is transferred directly to the merchant’s account within seconds.

Improved Customer Engagement

Open banking APIs improve customer engagement by streamlining the onboarding process and offering a one-stop solution for multiple needs.

For example, open banking APIs can allow biometric logins and authentication to minimize the time it takes your customer to access the account. Your users will be able to complete tasks faster without compromising data security.

With Canadians worried more than ever about the cost of living crisis in Canada, they’re carefully observing their money.

Typically, they’d need to source information from individual sources to get a full picture of their financial status in order to make sound financial decisions.

Open banking APIs can simplify the process by allowing third-party apps to automatically aggregate this information into a single app, improving customer engagement.

Reduced Risk of Fraud

Open banking APIs provide access to customer data, allowing more accurate risk profiling. Access to customer data allows incorporating verified identity information, account balances, and transaction patterns into your risk models.

The UK, where open banking has been available since 2018, has reduced card fraud significantly. In 2021, the UK reduced the losses from card fraud by an impressive £49.2 million.

The following four things make open banking payments safer:

  • Each payment uses strong customer authentication (SCA), which was introduced as a requirement in Europe by the revised Payment Services Directive 2 (PSD2) for ecommerce transactions in 2019.
  • No sensitive information is required for any open banking use case.
  • APIs pre-populate payment information.
  • Open banking providers take care of onboarding the merchants as well as carrying out the necessary due diligence.

Read More: Open Banking in Canada: How Banks and Customers Can Benefit

Implementing Open Banking APIs with Blanc Labs

Familiarizing yourself with open banking APIs is critical to ensure you’re equipped with the right knowledge and tools when open banking becomes available in Canada.

The problem? It can feel daunting. Partnering with the right team can make the process a whole lot easier.

Blanc Labs, in partnership with Axway and Mulesoft, can help you build a robust open banking API ecosystem. We can answer any questions you have and take care of the end-to-end implementation process.

Book a discovery call with Blanc Labs to learn more about open banking APIs.

What is API Management?

Financial Services | API Management | Digital Banking | Digital Transformation | IT Management

What is API Management?

March 15, 2023
What is API

Application Programming Interface (API) management has become an increasingly important aspect of modern business operations. With the advent of cloud computing and the need for digital transformation, enterprises are using APIs to enhance their existing applications, develop new applications, and drive innovation.

According to a study by Forbes, firms that used APIs saw 12.7% growth in their market capitalization over a period of four years. But using APIs is one thing and having an API strategy in place that can enable your business goals is another.

Proper management of APIs is imperative to support smooth business functioning. From startups to large enterprises, API management has become a critical component for businesses to remain competitive and meet the changing needs of their customers.

Whether you are a financial services provider looking to securely integrate third-party services, a retail giant seeking to improve your e-commerce platform, or a healthcare organization seeking to securely exchange medical data, API management can help you achieve your business objectives.

API Management Components

API management components are the building blocks that make up a comprehensive API management solution. These components work together to enable organizations to effectively manage their APIs and deliver value to their customers and partners. The primary components of API management include:

API Gateway

The API gateway is the component that sits at the front end of the API management architecture, acting as a traffic cop for incoming API requests. The API gateway is responsible for routing API requests to the appropriate backend services, applying security and access controls, and transforming data between different formats. The gateway also provides features such as caching, rate limiting, and request and response transformations.

Developer Portal

The developer portal is a  platform that provides developers with the information and tools they need to consume and build applications using your APIs. A good developer portal includes detailed documentation, code samples, forums, and tools for testing and debugging. The developer portal is a key component of API management as it helps to foster a community of developers who can help you drive adoption and engagement with your APIs.

Reporting and Continuous Improvement

Reporting and continuous improvement are essential components of API management as they help organizations understand how their APIs are used, identify improvement areas, and make data-driven decisions about their API strategies. With the help of real-time analytics and usage reports, organizations can track key metrics such as API request volumes, response times, and error rates. This information can then be used to continuously improve the API management process and deliver a better experience to developers and end-users.

API Lifecycle Management

API lifecycle management is the process of managing the entire life cycle of an API, from design and development to retirement and deprecation. This includes tasks such as versioning, testing, and publishing APIs, as well as managing security and access controls. API lifecycle management helps to ensure that APIs are managed in a consistent and organized manner, enabling organizations to respond quickly to changing business requirements and deliver value to their customers and partners.

Benefits of an API Management Platform

API management platforms provide a number of benefits to organizations that are looking to leverage APIs to drive innovation and growth. Some of the key benefits include:

Improved Security

APIs provide businesses with various benefits such as accessing enterprise services from different devices, promoting innovation, and creating new revenue streams. However, using APIs can also pose risks to data security, which is why it is crucial to protect them with an API manager. API management platforms are essential to ensure the security of APIs as they monitor their usage and implement security protocols such as JWT, OpenID and OAuth. Additionally, API management platforms can provide extra security benefits by controlling access to applications.

Increased Agility

API management platforms allow organizations to quickly and easily expose their existing systems and services as APIs. This enables organizations to respond quickly to changing business requirements and create new opportunities for growth and innovation. With the ability to easily manage and scale APIs, organizations can quickly and easily adapt to changing business needs.

A good example of this is the Emirates NBD Bank. In an interview with McKinsey, senior bank executives explained how they were able to achieve effectiveness and efficiency by shifting to APIs. “We have enabled several strategic business initiatives as a result. One example is our digital onboarding, which is available on mobile phones for self-service and via tablet for assistance in our branches. “We have onboarded more than 100,000 customers with our new process, doing up to 85 percent with straight-through processing in less than ten minutes,” said Neeraj Makin, group head of international and group strategy. Today, the bank offers more than 800 microservices and have seen over a million interactions in the last two years.

Improved Developer Experience

API management platforms provide a centralized location for developers to access and use APIs. With features such as detailed documentation, code samples, and testing tools, API management platforms make it easy for developers to consume and build applications using your APIs. This helps to drive adoption and engagement with your APIs, which can lead to increased revenue and more opportunities for innovation.

Better Monitoring and Analytics

API management platforms provide real-time monitoring and analytics capabilities, allowing organizations to track the usage and performance of their APIs. This information can be used to identify areas for improvement, optimize performance, and make data-driven decisions about your API strategy. With a better understanding of how your APIs are being used, you can make informed decisions about how to optimize your API offerings and deliver a better experience to your customers and partners.

Monetization Opportunities

API management platforms provide organizations with the tools and capabilities to monetize their APIs. With features such as billing, usage tracking, and rate limiting, organizations can set pricing and usage policies for their APIs, creating new revenue streams and driving growth.

Top Use Cases for API Management

The global API management market is expected to grow at a CAGR of 34.5% and reach $41.5 billion by 2031. API management has a wide range of use cases across various industries and sectors. A few of the major use cases are:

Digital Transformation Initiatives

API management is an essential component of digital transformation initiatives as it allows organizations to expose their existing systems and services as APIs. This enables organizations to quickly and easily create new applications and services, and drive innovation in a fast-changing digital landscape. With the ability to manage and scale APIs, organizations can respond quickly to changing business requirements and drive growth.

Open Banking

Open banking is an emerging trend that is transforming the financial services industry. With open banking, financial institutions can securely share their customer data with third-party providers, enabling new financial products and services to be created. API management is a critical component of open banking as it provides a secure and controlled environment for exchanging financial data, helping to ensure that customer data is protected and that transactions are compliant with regulatory requirements.

Read more: What is Open Banking and is it available in Canada?

Data Security

Data security is a critical concern for organizations in a wide range of industries. With API management, organizations can secure their APIs and the sensitive data they carry with features such as authentication, authorization, and encryption. This helps to protect sensitive information and ensures that data is transmitted securely, reducing the risk of data breaches and protecting the reputation of your organization.

Compliance

Compliance is an important consideration for organizations in regulated industries such as healthcare and finance. With API management, organizations can ensure that their APIs are compliant with regulatory requirements, such as the EU’s General Data Protection Regulation (GDPR) and the Payment Card Industry Data Security Standard (PCI DSS). This helps organizations minimize their risk of non-compliance and reduces the risk of costly penalties.

Custom API Management Solutions from Blanc Labs

At Blanc Labs, we understand the unique needs and requirements of our clients, and we offer custom API management solutions that are tailored to meet your specific needs. Our API management solutions are designed to provide enterprise organizations with the tools and capabilities they need to drive their digital transformation initiatives, secure their data, and ensure compliance with regulatory requirements.

If you are interested in learning more about the benefits of API management and how Blanc Labs can help you achieve your goals, we encourage you to book a discovery call with our team. Our experienced consultants will work with you to understand your needs and provide you with a customized solution that is tailored to meet your specific requirements.


Make the most of your API Strategy. Talk to an Expert.

What is Open Banking and Is It Available in Canada? 

Financial Services | Digital Banking | Digital Transformation | Lending Technology | Open Banking

What is Open Banking and Is It Available in Canada? 

February 9, 2023
Open Banking in Canada

If you’re a bank or financial institution, you should know what open banking is. Open banking consolidates your customers’ financial information. It allows them to access their financial data via a single banking or third-party app, allowing them to make smarter and faster financial decisions.

This guide explains open banking, how it works, and its benefits.

What Does Open Banking Mean?

Open banking is a secure framework that facilitates the exchange of financial data between financial institutions and third parties through APIs (application programing interface).

Think about the last time you wanted to check your investment portfolio. You probably had to log into multiple online portals and bank accounts to get financial information.

Open banking (also known as consumer-directed or consumer-led banking) can shorten this process to a few minutes by bringing all the information to a single dashboard.

When you try to access financial information via a fintech app with open banking, your bank transmits data via a secure online channel to the app. More importantly, you don’t need to provide login credentials when using open banking.

As you can imagine, being able to pull financial data securely from banks and other institutions will allow fintechs and the banks themselves to develop innovative products that enable Canadians to manage finances more effectively.

How Open Banking Works

Here is a typical scenario for how open banking works:

  1. A bank’s customer downloads a fintech app to manage finances and wants to start using it.
  2. The app needs to access financial data, so it prompts the customer to link their bank accounts.
  3. The customer authorizes the bank to securely share financial data with the app.
  4. The bank transmits customer data through a secured online channel.
  5. The app provides financial insights and recommendations.

Isn’t that how apps operate anyway?

Well, yes, except for one key difference. Traditionally, when a person links an app to their bank account, it uses screen scraping and the person’s login credentials to log into it and pull financial data.

On the other hand, open banking uses APIs (application programming interfaces). In simple terms, APIs allow two systems (the banking system and the third-party app, in this case) to communicate and exchange information securely.

Banks or financial institutions are responsible for building, implementing and managing the APIs that will allow customers to connect their accounts with new and innovative apps.

Banks need to find the right API management platform and be mindful of some common open banking API challenges. Alternatively, you can book a discovery call with us, and we’ll take care of the technical aspect of implementing open banking.

Screen scraping is prone to privacy and security risks since you can’t control how the fintech stores or uses your data. The practice can also violate your bank’s electronic access agreement (EAA), which frees the bank of any liability in case of an unauthorized transaction in your account.

Screen scraping will likely become obsolete once open banking becomes available in Canada.

What is Screen Scraping?

Screen scraping is the process of capturing data present on a screen — from a webpage, document, or app — for using it in another system or app.

It’s generally used by apps that need to extract data from legacy systems that lack an API management system or any other source of data extraction.

Data accessed by apps through screen scraping isn’t regulated. Without a standardized system, all third parties use their own level of security and approach to handling data.

Screen scraping platforms also store login credentials as text strings. The lack of encryption leaves your data vulnerable to attacks from hackers.

Unfortunately, an estimated four million Canadians are accessing banking-style services via screen scraping. The growing popularity of financial planning apps strongly calls for a more secure, regulated framework like open banking.

However, open banking still has its limitations. For example, the bank might securely transmit the information to a third party, but if someone hacks the app itself, they might steal your data. So even though open banking is safer than screen scraping, it’s not fully secure.

Benefits of Open Banking

The implementation of open banking in Canada will benefit both you and your customers.

Here are four ways open banking will benefit your customers:

  • Gives an overview: Open banking provides a secure framework to pull information from your bank accounts, credit cards, investment partners, and other financial institutions. An open banking app can consolidate all your financial data and provide a complete overview in one place without switching between websites and manually extracting information.
  • Allows shopping around for the best deal: Comparing deals for personal loans, credit cards, or mortgages requires careful research. A comparison app using open banking can speed up the process and help you find the best deal. Apps can also help you understand how likely you are to qualify if you apply for a loan based on your financial information.
  • Speeds up the application process: Applying for loans or credit requires submitting information, including your financial statements and KYC documents. Instead of manually submitting these documents, an app can store them for you and submit them as necessary when applying for a loan or opening an investment account.
  • Helps make smarter financial decisions: Fintech apps can use artificial intelligence (AI) and machine learning (ML) to create financial roadmaps based on your financial data. You can use these apps to create a budget, understand your spending habits, and find the best investment options based on your risk appetite. Apps may also project cash flows based on your budget and financial obligations so that you can estimate the available balance in your account at the end of each month.

Here are four ways open banking benefits you as a bank or financial institution:

  • Collaborate with third parties: Collaborating with third-party apps can help you explore data-sharing agreements and identify new opportunities. You can streamline processes and offer more related services to stay ahead of the competition.
  • Prepare for the future: Open banking isn’t available in Canada, but it soon will be. Over time, your customers will likely demand the privacy and security that open banking offers. As data privacy laws evolve, open banking will ensure you’re in an excellent position to adapt to changes. Moreover, quickly becoming compliant with evolving rules without interrupting service improves customer experience.
  • Increase market share: Your customers crave convenience. Allowing them to consolidate financial information securely ensures excellent customer experience. Offering open banking is critical to fulfilling your customer’s demands. Over time, you might even lose market share by not offering open banking.
  • Lower operating costs: Open banking ensures banks’ data lives in a centralized, digitally accessible location. This minimizes data silos and facilitates automation. Automating banking processes like mortgage underwriting allows you to reduce operating costs.

Read more: Open Banking in Canada: How Banks and Customers Can Benefit

Open Banking in Canada

While open banking is currently unavailable in Canada, it’s available in countries like the UK and Australia.

The Canadian government is working on safely implementing open banking in Canada. The government appointed Abraham Tachjian to lead Canada’s open banking framework development initiative in March 2022.

According to the Final Report of the Advisory Committee on Open Banking, the government had set a target to make open banking operational by January 2023, but implementation is still under process.

However, the government is committed to implementing open banking at the earliest and realizes the benefits it can offer to Canadians.

For example, when asked about how open banking can address the challenges facing BIPOC Canadians, small businesses, and rural/remote communities, Tachijan explained:

“While Canada’s banking framework aims to ensure all Canadians have access to basic bank accounts, some Canadians may be underbanked. Open Banking creates the opportunity for consumer-led banking, which gives consumers and businesses greater control and protection over their financial data, as well as more transparency on how it’s used.”

While the government lays the groundwork to implement open banking, you should ensure you have everything set up to offer customers open banking soon after it becomes available in Canada.

Is Your Financial Institution Ready for Open Banking?

Open banking is about to transform the financial services industry. Your customers will have the flexibility to choose how they interact with your bank, and your competitors will have the option to offer innovative solutions.

Implementing open banking can feel daunting, but partnering with the right team can simplify the process.

Blanc Labs helps banks implement open banking from scratch. Book a discovery call  to learn more about our open banking solutions.