Banking and financial services are evolving at immense speed. Transitioning from traditional, paper-based processes to digital and AI-powered processes is critical to survival. That’s why you need to think about business process improvement in banking and financial services.

Business process improvement comes with a price tag. You need experts on your team, a culture centered on continuous improvement, and a powerful set of automation tools. But these tools offer extensive benefits as well. For example, Accenture estimates that automation and augmentation can help save financial services firms $140 billion and banks $70 billion.

Revolutionizing Banking and Financial Services Through Business Process Improvement

Banking and financial services firms have grown tremendously through business process improvement. Look back at your own organization’s past. You likely had to radically redesign processes to bring about any revolutionary change in your organization. From developing a mobile app for your bank to building your ATM network, all changes were a result of improved, more efficient processes.

The next leg of growth in banking and financial services requires using technologies like AI and natural language processing (NLP) to reduce costs, increase efficiency, and improve customer experience.

These technologies will help you stay ahead of the curve and improve your workflow. However, implementing technologies like AI, Gen AI, and Robotic Process Automation (RPA) requires experience and expertise, so find the right partner for smooth implementation and minimal disruption.

Let’s now dive into how you can plan to improve business processes to prepare your financial institution for the future.

BPI vs BPM

Business Process Improvement (BPI) and Business Process Management (BPM) are two distinct but complementary approaches within organizational process optimization. BPI is primarily concerned with improving the efficiency and effectiveness of specific processes. It involves identifying, analyzing, and enhancing existing business operations to reduce costs, improve service delivery, or increase quality. On the other hand, BPM takes a broader view, focusing on the entire set of processes within an organization. It integrates all aspects of process management—from design and modeling to monitoring and optimization—with the goal of aligning processes with the strategic objectives of the organization. While BPI zooms in on process improvements, BPM includes holistic management of all processes to ensure coherence and alignment with overall business goals. 

Financial Processes That Need Improvement

There’s plenty of room for improvement in financial processes as we know them today. AI and RPA technologies have opened doors to a whole universe of process improvements that were previously unimaginable. Here are some examples of processes you should consider working on when implementing BPM:

Customer Onboarding

Onboarding sets the stage for your relationship with the client. Customers who have a positive experience when opening their bank account are 73% more likely to become the bank’s promoters.

Improving your onboarding process by implementing a fully digitized workflow eliminates the need to manage piles of paperwork, errors, and delays. A frictionless onboarding experience doesn’t just attract new customers; it also builds a solid reputation and loyalty among customers.

Customer Support

The modern customer wants their bank or financial institution to respond within seconds and be available 24/7. Not delivering on these expectations is essentially the same as handing your clients to competitors.

Intelligent Digital Assistants (IDAs), next-gen chatbots powered by AI, “are fully equipped with natural language understanding which aids in understanding and retaining context for polished conversations while carrying out a variety of tasks to fulfill a user’s requirements.” They act as “knowledgable bankers” who not only understand the unique journeys of customers, but are also able to recommend products, offers and next steps based on their knowledge of a customer’s past behavior and financial history.

Risk and Compliance Management

Tailoring business processes to minimize risks and comply with industry regulations helps prevent penalties as well as lower your compliance team’s workload. For example, you can create a digital workflow that provides real-time (or frequent) tracking for compliance requirements as well as detailed compliance reports.

Analytics can play a key role in bolstering your bank’s or financial institution’s risk assessment capabilities. AI-powered systems can ingest massive amounts of data your organization generates to identify patterns. The system can detect anomalies and predict risks using this data.

Loan Approvals

Loan origination systems are often plagued by labor-intensiveness, errors, and a ton of paperwork. Automating your loan origination system can transform your efficiency and the customer’s experience.

If your organization currently uses traditional processes, consider completely reengineering the process. Modernizing your lending process, right from eligibility checks to approval, is important not to develop a competitive advantage, but to survive in an environment where quick approvals and disbursals are the norm.

Implementing Business Process Management in Banking and Financial Services

Changing and managing business processes is easier said than done. Your team might need to unlearn and relearn. You might have to deal with reluctance and proactively offer training to help them get up to speed.

However, there’s an even greater challenge — implementing the right set of technologies and building the right infrastructure. That’s why you need a partner who has experience helping banks and financial services firms implement technologies to improve business processes.

With that in mind, here’s an overview of how you can implement business process management:

Step 1: Identify Key Processes

The first step is to identify key processes within your bank or financial institution that could use some improvement. The process could be onboarding, loan processing, risk assessment, or customer service.

Consider asking employees — people on the ground executing these processes — how you can improve. Identify their pain points and bottlenecks and prioritize areas for optimization based on your analysis.

For example, if your bank’s loan origination process is lengthy and has high error rates, fixing that should be your priority over streamlining your support processes.

Step 2: Map Your Processes

A process map gives you an overview of the entire workflow and the steps involved in the process, including stakeholders, decision points, and the flow of information. A visual representation of your process helps you understand its current state, identify inefficiencies, and find opportunities to improve the process.

Step 3: Optimize Processes

Once you’ve identified inefficiencies and redundancies, it’s time to eliminate them. The exact solutions to implement depend on the challenge you’re addressing. However, automation and standardization are the first steps towards optimizing processes.

If you’re thinking to yourself, “We’ve already automated repetitive tasks,” that’s not enough. Use AI to automate some tasks you previously thought were best handled by humans.

For example, don’t use scripted chatbots that make customers feel like they’re talking to a robot. Find a partner who can develop a chatbot powered by technologies like AI and Gen AI. AI-powered chatbots can personalize conversations and interact just like humans.

If you’re not using AI, you’re already late to the party — Bank of America has been using its AI chatbot, Erica, since 2016. Bank of America claims that Erica has been able to provide more than 98% of its clients with the answers they need.

Step 4: Monitor and Improve

Optimizing business processes is not a one-off task. It’s an ongoing journey. Measure the results your optimization efforts yield with process metrics like cycle time, error rates, and customer satisfaction.

You can use AI-powered data analytics to gain deeper insights into process performance and find areas that require further improvement.

For example, if you recently optimized your loan origination process, use data analytics to monitor processing time.

Has it improved to the extent you expected? If not, use data to find out why. Is the optimized process still prone to errors? Or is your team still going through the learning curve?

The Role of Automation in Improving Financial Processes

Automation plays multiple roles in improving banking and financial processes. Here’s a quick overview of why automation is vital to your business process improvement initiatives:

• Say goodbye to repetitive tasks and errors: You don’t need to spend thousands of dollars on data entry, reconciliations, and reports. Automation can perform those tasks more efficiently than humans and doesn’t make mistakes. Moreover, software allows you to keep costs under control even as you continue to scale.
• Enforce standardized processes: You can create all the SOPs (standard operating procedures)you want. But there will always be someone trying to take a shortcut. Automation helps you achieve consistency in executing standardized processes — you can impose rules through your automated system to eliminate deviations from a standardized process.
• Greater efficiency: Automation helps you multiply productivity. The more productive your bank or financial institution is, the more loans you can process, accounts you can reconcile, reports you can generate, and customers you can onboard without compromising on accuracy.
• Improved customer experience: One of the biggest roles of automation in business process improvement is tailoring your processes to meet the customers’ needs. Automation allows you to personalize processes, eliminate errors, offer convenience, and deliver fast experiences at scale.
• Deeper insights: Automating data collection and reporting helps you derive value out of the massive volume of data financial institutions generate. AI-powered analytics help you spot patterns and detect outliers. For example, if there’s fraudulent activity in a customer’s account, AI can pick up on that. Analytics also helps you make data-driven decisions, predict customer behavior, and assess risk exposure.
• Improved customer experience: Automation allows you to improve customer experience across channels. Your AI chatbot can deliver personalized responses, analytics can help you predict customer behavior, and streamlined onboarding helps you make a great first impression.