Careers
Work with us
Category: Digital Banking

2023 Fall Economic Update on Consumer-Driven Banking đŸ„ł

Financial Services | Digital Banking | Fintech | Open Banking

2023 Fall Economic Update on Consumer-Driven Banking đŸ„ł

November 29, 2023

When we attended the CLA Lenders Summit a few weeks ago, it seemed like everyone was ready to sign the death certificate for Open Banking in Canada. Very little, if any, material progress had been communicated on behalf of the government to create a regulatory framework or policy mandate to make good on the promise or timelines defined by an Advisory Committee on Open Banking Report which became the mandate of Abraham Tachjian, who was appointed as Canada’s Open Banking lead, by the Liberal government in 2022.

Fast-forward to Wednesday November 21st, 2023 when Finance Minister Chrystia Freeland provided her 2023 Fall Economic Update, our team, as well as many of our clients and industry collaborators were taken by surprise when the Liberals laid out a framework and timeline for Canada to implement a Consumer-Driven Banking approach.

Aside from a snazzy rebrand of the open banking moniker, the policy statement on Consumer-Driven Banking outlined the goal of “adopting legislation and fully implementing the necessary governance framework by 2025”. It would seem from the update, part of the governments motivation for moving ahead with consumer-driven banking is a focus on the affordability crises facing many Canadians. The Consumer-Driven Driven Banking policy statement was listed under the header of “Making Life More Affordable” in the economic update.  The update for Canada now seems to be following a similar path to how policy is being shaped and implemented in the US.

Our Take:

As long-term believers in the benefits of Open Banking, we are thrilled to learn of the renewed commitment to making consumer-directed banking a reality in Canada.  While there is still a lot of work to be done as well as the additional hurdle of new  legislation being tabled during an election cycle, we are committed to the potential  benefits of Consumer Directed Banking for banking customers and the significant opportunity for innovation and collaboration in the Canadian financial services sector.

You can read the full Fall Economic Statement here but if you are short on time, ChatGPT did a pretty good job of summarizing the statement in bullets, below.

 

Introduction to Consumer-Driven Banking:

    • Allows secure transfer of financial data via API.
    • Aims to replace unsecure screen-scraping.
    • Enables access to data-driven financial services.

Benefits of Consumer-driven Banking:

    • Consumers gain secure access to innovative financial tools.
    • Greater control over financial data for improved outcomes.
    • Small businesses experience reduced administrative burden.

Policy Objectives:

    • Safety and soundness of the financial sector.
    • Consumer financial well-being and protection.
    • Economic growth and international competitiveness.

Core Framework Elements:

    • Governance: Oversight and management of the system.
    • Scope: Types of data, participants, and expansion pace.
    • Accreditation: Requirements for participating in data sharing.
    • Common Rules: Privacy, security, and liability guidelines.
    • Technical Standards: Establishment and oversight of data flow.

Course of Action (Legislation in 2024):

    • Phased approach to scope, oversight, and screen-scraping elimination.
    • Key elements codified in legislation.
    • Mandate to a government-led entity for supervision and enforcement.

Governance (Effective Oversight):

    • Government-led entity to supervise and enforce the framework.
    • Model for provincial entities to “opt-in” to governance.
    • Strong governance framework to ensure compliance.

Scope (Phased Implementation):

    • Initial phase includes federally-regulated financial institutions.
    • Opt-in option for credit unions and third parties.
    • Reciprocal access for all entities to promote data portability.

Accreditation (Trusted Data Sharing):

    • Formal framework for entities collecting consumer data.
    • Regular reporting for accreditation maintenance.
    • Exemption for federally-regulated banks and credit unions.

Common Rules (Transparent Foundation):

    • Privacy, security, and liability obligations.
    • Compliance as a condition for data access.
    • Complements existing legislation.

Privacy (Protection Measures):

    • Participants must comply with legislative frameworks.
    • Specific privacy rules for financial data sharing.
    • Consent dashboards for real-time consumer control.

Liability (Clear Structure):

    • Statutory contractual relationship between participants.
    • Liability moves with the data and rests with the party at fault.
    • Internal policies and procedures for complaint handling.

Security (Protecting Consumer Data):

    • Clear security requirements for accredited entities.
    • Oversight of security standards in legislation.
    • Ongoing reporting obligations for data protection.

Single Technical Standard:

    • Mandate for a single technical standard.
    • Legislation to outline principles and oversight.

Next Steps for consumer-driven banking:

    • Department of Finance aims to implement the framework by 2025.
    • Ongoing engagement with industry stakeholders.
    • Legislative framework development and phased implementation.

Related Insights

Financial Services
Integrations
Services
Case Studies

Blanc Labs Expedites the Development of Mortgage Product for Canada’s Top Brokerage

September 27, 2023
Read Now
Financial Services
API Management
Digital Banking
Articles

5 Benefits of Open Banking APIs

March 23, 2023
Learn More
Financial Services
API Management
IT Management
Company News

Blanc Labs and Axway partner up to provide integrated open banking solutions for all

October 05, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More
Financial Services
Integrations
Services
Case Studies

Blanc Labs Expedites the Development of Mortgage Product for Canada’s Top Brokerage

September 27, 2023
Read Now
Financial Services
API Management
Digital Banking
Articles

5 Benefits of Open Banking APIs

March 23, 2023
Learn More
Financial Services
API Management
IT Management
Company News

Blanc Labs and Axway partner up to provide integrated open banking solutions for all

October 05, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More
Financial Services
Integrations
Services
Case Studies

Blanc Labs Expedites the Development of Mortgage Product for Canada’s Top Brokerage

September 27, 2023
Read Now
Financial Services
API Management
Digital Banking
Articles

5 Benefits of Open Banking APIs

March 23, 2023
Learn More
Financial Services
API Management
IT Management
Company News

Blanc Labs and Axway partner up to provide integrated open banking solutions for all

October 05, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More

How EQ Bank is Using Financial Data Integrations to Supercharge Their Residential Lending Process

Case Studies

How EQ Bank is Using Financial Data Integrations to Supercharge Their Residential Lending Process

When Our Clients Win, We Win.
Financial Services | Digital Banking | Integration | Residential Lending
and and

Summary

Equitable Bank is Canada’s seventh largest Schedule I bank and is ranked the number one Canadian Bank on the 2023 Forbes list of World’s Best Banks. Managing more than $50 billion in assets and serving more than 5 million Canadians, the bank offers a diverse suite of residential lending, commercial lending, and savings solutions, including high-interest savings products and guaranteed investment certificates.

As a challenger bank focused on delivering better banking experiences, Equitable Bank wanted to set a new standard for the mortgage application process that is fast, seamless and error free.

Working with Blanc Labs as a technology strategy and systems integration partner, EQ decided to implement Flinks Data Aggregation & Connectivity tools to transform their lending process by developing a new Statement Share tool.

The Statement Share tool overhauled EQ’s mortgage approval process, simplifying the identity and funds verification process for both customers and underwriters.

 

*Instant Bank Verification (IBV) and Financial Data Enrichment tools can accelerate the underwriting process by up to 30%*. Stats based on a sample size of Flinks’ clients

30%* Improvement in underwriting speed
When Our Clients Win, We Win.

The need for an improved mortgage approval journey

Buying a house is a major milestone for most people, often the biggest purchase they’ll ever make. The process involves various steps, including getting approved for a mortgage, which can be quite stressful on its own.

Financial institutions require a lot of data and documentation to move forward with their mortgage underwriting process. Unfortunately, this puts the burden on customers to gather and share all of that information.

The process of sharing documents is not a pleasant one. It involves downloading reports from bank portals, scanning or printing them, emailing them to the mortgage officer or handing in physical copies, and notifying the broker.

Paul von Martels
Vice President, EQ Bank

When clients send their bank statements directly to us by email, they’re sending them in PDF format—which requires manual work to process and to review for inconsistencies.

EQB had an additional layer of complexity. Their customers, most of whom are small business owners, have multiple bank accounts which were used for both business and personal purposes. This made the information sharing process even more confusing and cumbersome.

EQB wanted an elegant solution that would make the mortgage application process simpler for the customer and less complicated for the mortgage underwriters. The result was the Statement Share tool.

The Statement Share tool

Enhancing the Customer Experience

The Statement share tool uses Flinks’ data connectivity to provide customers witha digital interface where they can share their banking information securely and submit an application with just a few clicks. The tool sources information directly from banks, making the process reliable and error free. The tool also has the provision to notify the broker that the application is complete. Since introducing the tool, EQB has seen a significant uptick in its use by customers.

Improving Employee Productivity

Within the back office, the tool is a boon to mortgage underwriters who can easily verify the income and identity information. Blanc Labs integrated the Flinks API with the bank’s mortgage engine without having to rip or replace legacy components. This led to better employee productivity and experience.

Ashley-Yantzi
Ashley-Yantzi
Ashley Yantzi
Vice President of Residential Lending, EQ Bank

We use the Statement Share tool, created by Blanc Labs using Flinks APIs, at deal origination. There are various use cases for us, but the tool is a crucial part of our verification process that assesses whether what borrowers have stated in their applications is true. Thanks to the API, we are seeing statements and factual data directly from their banks.

In Conclusion

Equitable Bank’s Statement Share tool, powered by Flinks’ data connectivity and integrated by Blanc Labs, exemplifies the commitment to enhancing customer experience and optimizing employee efficiency. By streamlining the mortgage application process and reducing complexities, Equitable Bank has successfully evolved the way people navigate the path to homeownership, making it a smoother and more enjoyable journey for all parties involved.

If you are interested in evolving your financial ecosystem to improve your customer experience and employee productivity, reach out to us at Blanc Labs and let’s explore the possibilities together. Contact us today and start unlocking the potential of open APIs for your business.

Latest Insights

Financial Services
API Management
Digital Banking
Articles

Finding the right API Management Platform

November 03, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

Open Banking in Canada: How Banks and Customers Can Benefit

September 15, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More
Financial Services
Banking Automation
Digital Transformation
Articles

Challenges in Digital Lending

May 12, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

Finding the right API Management Platform

November 03, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

Open Banking in Canada: How Banks and Customers Can Benefit

September 15, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More
Financial Services
Banking Automation
Digital Transformation
Articles

Challenges in Digital Lending

May 12, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

Finding the right API Management Platform

November 03, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

5 Factors to Evaluate Open Banking Readiness in Canada

September 28, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

Open Banking in Canada: How Banks and Customers Can Benefit

September 15, 2022
Learn More
Financial Services
API Management
Digital Banking
Articles

4 Ways APIs Can Improve Your Bank

June 08, 2022
Learn More
Financial Services
Banking Automation
Digital Transformation
Articles

Challenges in Digital Lending

May 12, 2022
Learn More

Start your Digital Transformation

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.

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.

Benefits of Intelligent Document Processing

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

Benefits of Intelligent Document Processing

January 20, 2023
Benefits of IDP

If you are reading this, chances are that you are exploring intelligent document processing (IDP) systems for your business.

Many businesses are curious about this document automation process because, just like you, they may have heard about how it simplifies complex document layouts, captures data and organizes it for a seamless workflow.

In this article, we will explore:

  • What Is Intelligent Document Processing?
  • How Intelligent Document Processing works
  • Benefits of Intelligent Document Processing

What Is Intelligent Document Processing?

Intelligent document processing uses Artificial Intelligence (AI), Machine Learning (ML), Optical Character Recognition (OCR), computer vision, and Intelligent Character Recognition (ICR) to automate data extraction from complex semi-structured and unstructured documents. This technology helps you categorize the extract data into a meaningful format that is easier for people or a system to comprehend. A popular use case for intelligent document processing is mortgage origination and decisioning, where applications can run into hundreds of pages.

Read more on how Intelligent Document Processing helps financial services organizations.

How Does Intelligent Document Processing Work?

IDP uses deep-learning AI technology to scan complex data, extract it and organize it into predefined categories. The best part is that this technology can be trained in up to 190 languages.

One of the best ways to understand how document processing works is to look into a few use cases first. Here are multiple ways in which IDP helps organizations from various industries to automate their data.

IDP for Human Resources

One of the popular intelligent document processing use cases is human resources. This paper-intensive industry has already transitioned to data automation by:

  1. Screening resumes and capturing the right skill sets that match a job description. This has helped HR teams avoid going through resumes manually and narrow down on candidates who are fit to take up the role, hassle-free.
  2. Keeping all the employee data in one place. Earlier, HR teams were forced to manage hundreds of thousands of files for new and existing employees. Not only was it hard to find specific data quickly, but it was hard to comprehend at times. But with IDP, it is easier to update and extract the employee data when need be.
  3. Simplifying the employee onboarding process by capturing employee information based on the forms filled in by them.

IDP for Mortgage Processing

Another data heavy use case you can refer to is mortgage processing. Given how vast the industry is, you can only imagine the number of documents that accumulate at every stage of the mortgage process. Let’s see how IDP simplifies document accumulation and data extraction for this industry:

  1. IDP is capable of processing high-volume mortgage data and identifying possible risks one may face during the process. With IDP, mortgage officers can identify the cause for rejection and inform approvers about these potential risks.
  2. Validating documents is time consuming. However, IDP helps you validate the data from documents with a button and offers you insights on whether to move ahead with the mortgage or not.
  3. You can also audit each mortgage application with IDP and that too without human intervention. It can be time consuming to audit documents for a mortgage even when you have a professional helping you out with the process. With IDP, you can save time and also check the authenticity of each document.

Top 7 Benefits of Intelligent Document Processing

  1. Increases Employee Productivity

One of the benefits of using IDP is its ability to increase employee productivity. Intelligent document processing helps employees free up their time that they spend on doing repetitive tasks such as data entry and record management. Lesser time spent on repetitive tasks helps increase their productivity.

  1. Helps Reduce Manual Work

IDP is also known for reducing manual work as it enables extraction of data from a document,  an image, sound, or even a video using its AI technology. What’s more, the data extracted is then transformed into text, thereby helping employees reduce manual work on such tasks. It uses Natural Language Processing (NLP) that understands the content and converts that data into text.

  1. Automates Classification of Documents

Once the data is converted to text, it is classified into different categories, without the need for human intervention. This helps your organization with data collection and streamlining the document management process with minimal errors.

  1. Enables the Processing of Large Volumes of Documents

Another benefit of using IDP is processing large volumes of documents in one go. While humans take time to extract data from each document, the same isn’t true in the case of IDP. Unlike humans, a document processor can extract data from multiple documents simultaneously. You can tackle a giant database and avoid spending capital on a data entry team.

  1. Improves Data Accuracy

Humans are prone to make errors when feeding data to a database, especially when there are a large number of documents. This may hamper the overall authenticity of the database and may leave managers questioning its accuracy.

Thankfully, the same isn’t true in the case of AI and ML-based IDP technology. It is capable of entering the data accurately in the database and retrieving the same data with speed when its users need it on an urgent basis. In short, an automated document processor can extract accurate data and eliminate mistakes with an accuracy of more than 90%.

  1. Increases User and Customer Satisfaction

Intelligent Document Processing is capable of providing users with optimal responsiveness through the life cycle of work to be performed. With IDP, you can process evidentiary documents, extract the right keywords from a data set in less time. What’s more, the automated process can use keywords to route emails to the right department for faster throughput from start to finish. This helps speed up the response time between receiving an origination request to approving it, from a claim initiation to notification of completion, etc. Documents are no longer the bottleneck.

  1. Offers Data Security

When documents are managed manually or in disparate data systems, there is always a possibility of a data breach. But with IDP, documents can be kept in a secure, centralized location. This enables businesses to be more compliant with data protection regulations. In other words, you can make sure that the data saved never gets misused by anyone.

Maximize the Benefits of Intelligent Document Processing

Benefits such as these (and others discussed in the article above), will help you identify various reasons why a data extraction processes like Intelligent Document Processing are essential for your business. Once you decide to opt for intelligent document processing, it’s time to look for the right implementation partner.

Why Choose Blanc Labs’ Intelligent Document Processing?

Blanc Labs believes in driving improved operational efficiency and better business outcomes.

Blanc Labs’s IDP solution can:

  • Automate workflows for document collection, digitization and analysis
  • Replace manual effort through intelligent data capture
  • Connect with third party data providers for analysis and insights
  • Analyze document data, provide status alerts, and flag fraudulent entries
  • Secure documents in a drop box
  • Deploy on premises, in the cloud or as a hybrid model

We hope that learning about these benefits will help you arrive at a decision faster and invest in the best document processing solution in the market.

Top Use Cases for Banking Automation

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

Top Use Cases for Banking Automation

January 16, 2023
Top Use Cases for Banking Automation

Did you know that the World Bank uses Banking Automation including robotic process automation (RPA) for many of its functions? That’s how powerful it is.

Modern businesses rely on automation to reduce costs and improve efficiency, but how can banks use automation? In this article, we explain the most common use cases of banking automation.

What is Banking Automation?

Banking automation involves handing over repetitive business processes in financial institutions like banks and credit unions to technologies like robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML).

Why Banks Need Intelligent Automation

As a banking professional, you know that a good chunk of your daily tasks is repetitive and mundane. Banking automation eliminates the need for manual work, freeing up your time for tasks that require critical thinking.

Here are seven reasons why banks needs intelligent automation:

  1. Better Customer Experience
  2. Automated KYC
  3. Faster Mortgage Application Processing
  4. Accurate Report Generation
  5. Anti-Money Laundering Prevention
  6. Audits and Compliance
  7. Faster Decision Making

Below we dive deeper into banking automation use cases so you can get a closer look at how automation can transform your workflow.

1. Customer Experience 

A robust Customer Experience has never been more important. As the world moves online, you’ll need to re-engineer your Customer Experience to make it friction free, faster and more efficient.

Consider a customer’s first experience with the customer onboarding process. If this isn’t a painless experience, you risk turning away a customer in the first interaction.

Sure, you might need to invest some money to improve the customer experience and make it seamless and efficient, but the potential ROI is excellent. Think about it. Automation will eliminate much of the manual and low-value in-person interaction, saving your sales reps plenty of time to focus on running effective sales campaigns.

Automating processes reduce the potential for errors, allowing you to onboard customers faster. Automation also reduces costs because it eliminates the manual labor and paperwork associated with customer onboarding.

Moreover, your customers will be able to use their accounts faster, which improves customer experience. As a McKinsey report explains:

“Automation and artificial intelligence, already an important part of consumer banking, will penetrate operations far more deeply in the coming years, delivering benefits not only for a bank’s cost structure, but for its customers.”

2. KYC

Most banks perform KYC (Know Your Customer) by manually verifying customer details. The problem? Manual verification can take plenty of hours.

The KYC process doesn’t end at verification. You must manage KYC documents for a long time to comply with regulatory requirements. Using automation in banking operations can help free up the hours you spend on manual verification.

Moreover, automation also eliminates the risk of human error. By eliminating room for error, automation ensures improved customer experience, increased quality assurance, and the number of cases processed each month, according to a McKinsey study.

3. Mortgage Application Processing

Mortgage application processing involves plenty of paperwork. Manually checking details on each document is time-consuming and leaves room for error. On the other hand, intelligent document processing (IDP) helps streamline document management.

Remember those desks full of paperwork? That’s a thing of the past. Modern banks use IDP to manage documents digitally. IDP helps automate the generation of customer risk profiles and mortgage document processing, reducing processing time to a few days.

An Accenture study found that 47% of customers prefer opening a new bank account online using a computer, while 37% prefer using the bank’s app or website.

The shifting consumer preferences point to a future where loan requests and processing are online and automated. Now is a great time to prepare your bank for that future.

4. Report Generation

All financial institutions need to generate reports for various purposes. For example, you might need to generate a report to show quarterly performance or transaction reports for a major client.

RPA can help generate reports automatically. The system can auto-fill details into a report and prepare an error-free report within seconds. An automated system can perform various other operations as well, such as extracting data from internal or external systems and fact-checking the reports.

5. Anti-Money Laundering (AML) Prevention

In Canada, banks need to ensure they are complying with the statutes of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2000. Depending on your location, compliance requirements might include ongoing risk-based assessment, customer due diligence, and educating staff and customers about AML laws.

A single AML investigation can take 30 minutes or more when assigned to an employee. However, automation can complete the same investigation much faster and minimize errors.

Using automation ensures you don’t spend too much money on AML investigations and stay compliant, so you don’t have to pay hefty fines.

6. Audits and Compliance

The cost of maintaining compliance can total up to $10,000 on average for large firms according to the Competitive Enterprise Institute.

Maintaining compliance is expensive but less so than being non-compliant. For example, banks must ensure data accuracy when producing loan facility letters. However, instead of requiring employees to spend time meticulously verifying customer data, you can use intelligent document processing to save time and guarantee data accuracy.

Banking automation can help you save a good amount of money you currently spend on maintaining compliance. With automation, you can create workflows that satisfy compliance requirements without much manual intervention. These workflows are designed to automatically create audit trails so you can track the effectiveness of automated workflows and have compliance data to show when needed.

For example, you can set up a system to auto-freeze compromised accounts. Once the account is frozen, RPA can automatically complete the steps in your fraud investigation process. The system also creates an audit trail in the process.

Unlike humans, RPA can be active 24/7. Using RPA in banking can help ensure the accuracy of compliance processes, ensuring you’re compliant at all times without investing a lot of human resources towards compliance.

7. Decision Making

Managers at financial institutions need to make decisions about marketing, operations, and sales, but relying on raw data or external research doesn’t provide full context. RPA can help compile and analyze internal data to track client spending patterns and preferences.

AI and RPA-powered automation can help make decisions about timing marketing campaigns, redesigning workflows, and tailor-making products for your target audience. As a result, you improve the campaign’s effectiveness, process efficiency, and customer experience.

For example, when introducing a mortgage loan product, you can use RPA’s data analysis capabilities to identify location-specific and borrower-specific risks. RPA can compile a summary of the risks on a document, allowing the credit manager to study risk profiles without the associated manual work.

Blanc Labs’ Banking Automation Solutions

Blanc Labs works with financial organizations like banks, credit unions, and Fintechs to automate their processes.

We can create tailor-made automation software solutions based on your banks’ needs to minimize manual work and improve process efficiency. Our team can help you automate one or multiple parts of your workflow using technologies like RPA, AI, and ML.

Book a discovery call with us to see first-hand how automation can transform your bank’s core operations. We’ll create an automation solution specifically for your organization that works in tandem with your current internal systems.

What Is Composable Banking and Why Should I Care?

Financial Services | Core Banking | Digital Banking | Open Banking | Technology Architecture

What Is Composable Banking and Why Should I Care?

December 9, 2022
Composable Banking

by David Offierski

Composable Banking is a technology and transformation approach that addresses the simple fact that change is constant. To ensure that banks and FI’s can innovate swiftly and maintain the greatest level of control over their product roadmap, they must adopt a modular or “swappable” architecture. The characteristics that define Composable banking follow the MACH principles: Microservices, API First, Cloud Native, Headless.

In a world that is evolving at an ever-increasing pace, it can seem as though the velocity of technology trends is starting to reflect the feverish pace of modern-day news cycles.  It can be hard to keep up with all that is happening across the financial services industry and a lot of the content out there is often decorated in painful consulting speak.  That is why we view it as our accountability to sift through the noise and develop an informed opinion on the what, why, and how of emerging trends that our clients and ecosystem partners need to know about.

A significant shift is underway in terms of how banks and FI’s do transformation work reflecting similar (r)evolutions in other industries like eCommerce and tech platform players like Apple and Google. The term that is being increasingly adopted to encompass a broad cross-section of tech evolution amongst financial institutions is composable banking.

Composable banking is a technology-enabled approach to delivering financial products and services to customers and ecosystem partners.  It is a banking transformation approach that addresses the simple fact that change is constant. To ensure that banks and FI’s can innovate swiftly and have an agile experience roadmap, they must own a modular “swappable” architecture. This is the only way to deploy new features rapidly and retain control of their destiny.

Modular banking is not composable banking

First, let us define the characteristics of composable banking by delineating how it is different from the traditional, modular approach offered by E2E core banking systems provided by established SaaS vendors.  They have been using a modular approach to extend the functionality of their core systems, whereby their propriety modules are extensible but are neither flexible nor open.

Composable banking is a solution approach that prioritizes integration readiness and flexibility, allowing organizations to dramatically improve the speed at which a company can onboard a new partner or design, build, test and deploy a new product.  This is relevant for value-driven business transformations aiming to build differentiating customer experiences while setting up a future-proof, flexible and cost-effective IT landscape.

What you are Composed of matters

Composable banking is enabled through the adoption of MACH characteristics to define how an organization approaches developing and supporting technology to enable new customer experiences and improve business operations.

M

Microservices


M: Individual pieces of business functionality that are independently developed, deployed, and managed.

With a microservices architecture, an application is built as independent components that run each application process as a service.

These services communicate via a well-defined interface using lightweight APIs. Services are built for business capabilities and each service performs a single function. Because they are independently run, each service can be updated, deployed, and scaled to meet the demand for specific functions of an application.


Microservices Enabled Banking Example:

Monzo is a UK based neo-bank that has written extensively about their API-first approach and how they scale, secure, and manage over the over 2000 microservices that power their banking experiences.

A

API First


A: All functionality is exposed through an API.

API-first is a product-centric approach to developing APIs. It views the role of APIs as discrete products, rather than integrations subsumed within other systems.

Developing and managing microservices in an API-first approach means that APIs become key inputs to determine & define product functionality.  This means that the people developing against your API are your users, and your API needs to be designed with those users in mind.

An API-first mindset requires adopting product management best practices to ensure the services evolve to meet the needs of users (developers), particularly around the characteristics of flexibility, interoperability and reusability.


API-First Banking Example:

Citibank is one such organization that follows an API-first approach in its path to digital transformation and empowers a developer ecosystem for innovation. Citi’s global consumer bank serves 62 million clients in 35 countries and uses APIs to build many of its consumer facing digital products.

C

Cloud Native


C: SaaS that leverages the cloud, beyond storage and hosting, including elastic scaling and automatically updating.

Cloud-native technologies empower organizations to build and run scalable applications in modern, dynamic environments such as public, private, and hybrid clouds.  They feature containers, service meshes, microservices, immutable infrastructure, and declarative APIs to exemplify this approach.

Cloud-native banks leverage core banking systems built in the cloud and for the cloud to enjoy benefits such as scalability, flexibility, availability and elasticity, amongst others.


Cloud Native Banking Example:

In September 2021, JP Morgan Chase announced that it would migrate its retail core banking assets to the Google Cloud Platform and leverage Thought Machine cloud native core banking system.


Headless


H: Headless architecture enables an organization to evolve from a monolithic approach to service delivery to an ecosystem model.

Front-end presentation is decoupled from back-end logic and channel, programming language, and is framework agnostic.

Enables the ability to seamlessly embed secure banking services into a variety of customer touchpoints.   e.g., Apple Pay, ACH money transfers, budgeting and billing platforms.


Headless Architecture Banking Example:

Using the API’s available through Temenos core banking platform, EQ Bank was able to act as a deposit-taking backend for Wealthsimple to launch high-interest savings account offering to WS clients in Canada.

 

In the image below, we’ve highlighted some of the intended outcomes FI’s can expect to benefit from as they undertake the development of a digital transformation strategy and embark on a journey that can only be described as iterative and incremental. Spoiler alert: the work is never done.  The goal though is that with investment and dedication it goes faster and gets easier to measure.

Composable Solutions

“Almost half of the global financial services organizations are still in a very early or even immature stage of their digital transformation journey.”  

– Juergen Weiss, FI Practice Vice-President at Gartner 

Digital Transformation is the entire journey by which a financial institution seeks to digitize and automate its processes to improve its products and customer experiences and expand into newer, untapped markets with speed and greater operating efficiency.

For those organizations that are still in the early stages of planning and prioritizing their transformation initiative, the breadth of choice, cost, and complexity can be daunting. Some of the activities required to achieve MACH characteristics require major infrastructure upgrades and the migration will most likely be implemented over a multi-year horizon.

Status of core banking initiatives

A Composable Approach to Digital Transformation

Developing a composable transformation approach should allow for multi-threaded initiatives that support the broader objectives. For this reason, we often work with clients to highlight one to two areas of opportunity, whereby organizations can see an immediate ROI in terms of CX and operational efficiency.

Initiatives like implementing an intelligent document capture platform to reduce manual data entry into a Loan Origination Systems (LOS) or conducting an API Maturity assessment allow FI’s to realize immediate benefits while building transformation capability and creating foundational progress towards a future state that reflects the characteristics of composable banking.

Curious about how you can develop a composable transformation approach at your organization? Book a workshop with Blanc Labs.

David Offierski
VP Partnerships

David Offierski is a tech and business strategist with a passion for innovation and customer experience. As VP of Partnerships, he is responsible for building a robust ecosystem of partners that create value for our clients and prospects.