With continued gloomy economic forecasts and Brexit on the horizon, the banking sector must be more prepared than ever for the obstacles that might come its way. Despite the positive Bank of England stress tests results in November, more needs be done to ensure that banks are able to cope with sudden economic changes. Digital transformation is key to being better prepared for varying economic obstacles, something traditional banks have so far been slow to invest in.
Banks have a vast amount of data at their disposal, from customer and employee details to the latest information on market conditions. However, without the right technology, this could become a hindrance, rather than a help. Moving into 2018, new ways of doing business – from online customer account opening portals and app-based transactions to robot-dominated trading floors – will lead the way in the financial services and banking sectors.
With emphasis on putting the customer first, ensuring compliance and streamlining back-end processes to save on costs, banks must employ the appropriate technologies to keep up with this new and changing economic world.
A new kind of banking
Digital transformation gives banks the opportunity to redesign a system that puts the customer at the centre, without compromising precious time and resources. By harnessing modern technologies, traditional retail banks can not only change the customer experience and alter the face of banking as we know it, but transform themselves into cutting-edge organisations able to compete with their challenger bank rivals.
From back office solutions using robotic process automation (RPA) to customer-facing solutions using real-time text recognition, facial recognition or ID data capture technologies, banks have a wealth of new technologies at their disposal. Through optical character recognition (OCR), machine learning, deep learning, and natural language processing (NLP), possibilities such as automating processes for improved efficiency as well as learning and predicting customer behaviour will open up within the banking sector – and provide numerous strategic benefits to banks. By leveraging these AI-based solutions, banking institutions can seek to understand and serve their customers in completely new ways.
NLP is key to new type of customer conversation, allowing banks to replace complex site and page navigation with simple customer chat and applicable user-customised content. NLP covers an array of technologies including automatic summarisation, relationship visualisation, text mining, and sentiment analysis – with the help of such methods, most customer ‘chat’ interaction can be performed by chatbots or AI-based virtual assistants.
A constant challenge for banks is how they can best manage and make use of the vast amounts of data they hold. NLP can also be used to transform huge volumes of legacy documents with unknown content into value-add assets. Digitising documents through OCR and analysing them through NLP means they can be quickly categorised and ‘hidden’ information can be extracted and used. This transforms previously ‘dark data’ into real, insightful assets – providing real value for banks that must access and make sense of their data to thrive.
A path into the digital world
Today, RPA is able to execute routine digital tasks to lower labour costs and free-up resources for complex, human-led tasks. By implementing OCR into RPA, the process of manual data entry can be omitted entirely – and be replaced by a tireless, highly scalable ‘robot-employee’. With the help of NLP and AI, this ‘employee’ can detect, understand and process relevant data from documents – and bring even higher value by optimising complex processes across the business.
Well equipped for an uncertain future
For banks, digitisation opens up new avenues for revenue stimulation, cost streamlining, and an entire overhaul of business functions – all of which will be necessary in a changing economic climate. By using modern technologies to mitigate against disruptive landscapes, financial institutions can help ensure that they have a robust, progressive capital planning process to account for their unique risks.
With efficient digital processes and usage of the latest available technologies, banks will be able to weather the potential economic storms that 2018 – and beyond – could bring. Investment in technology is key to ensure that next years’ stress tests bring the unequivocally positive results that Britain’s shaken economy will need to thrive.
Eva Weber is senior manager at ABBYY.