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August 9, 2022
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Technology

6 Uses for Process Automation in Financial Services

Numerous businesses have easily and gladly transitioned to begin using process automation software. Where the need arises, financial services are some of those that have met the challenge. Some online bank accounts require validation via a third-party integration to be used, while loans are now being processed using automated steps — including underwriting and risk analysis. Whatever the case with your business, the industry has now become a part of the automation revolution, and it’s only a matter of time before you discover the vast number of uses that automation can have in financial services.

Monitoring Data Compliance

One of the most important things to remember about financial services is that there are very specific laws about how data is handled. From FINRA, GLBA, and various other regulatory entities, there are standards to be met, and your failures to practice appropriate data governance within the industry can land you in a heap of trouble. That’s why it’s imperative to keep an eye out for anything that would make your business practices non-compliant with the laws governing financial data. Automation of such monitoring means that you can have a computer watch your back instead of having to do it yourself. More than that, though, the use of automation helps reduce the margin of error by a significant amount — given that it’s not a human that’s looking out for noncompliance, but a robot.

Loan Decisioning

The advent of process automation for financial services has directly affected loan decisioning and the lending workflow in general through various windows of opportunity. The first of these is the way in which underwriting is done by aggregating information from various sources automatically, reducing the time that underwriting and credit score checks would take for an applicant. In fact, automated credit checks have been around a lot longer than some other uses of process automation. However, there’s more to it than just a credit score inquiry: when a customer applies for a loan, there’s also the chance that a lender can simply approve or deny the request automatically based on the aggregate information gathered electronically. There’s even a form of AI-based risk evaluation that can take place and further use online sources to determine for a loan officer whether an applicant is a good pick or not.

Digital Communication Workflows

In any given financial services environment, be it banking, lending, investments, or accounting, there’s always an expectation for communication. Given that the properties being handled in these cases are sensitive and valuable, clients want communication at nearly every turn. However, not every communication made needs to come from a human; in today’s world, it’s simply normal to receive a loan approval by email or an instant overdraft alert via text. If they’re so inclined, a person can receive automatic updates on your investments, but whatever a client will decide to do with their digital communications, you’ll not be burdened with every single email; just the ones that really require a human touch.

KYC and Identification Checks

Especially in banking, there is now a focus on identification verification, and on the approach known as “Know Your Customer”, or KYC. This protocol reminds banking professionals to periodically ensure that their customers are who they say they are — a move that banks have made to insure themselves against fraud, terrorist activity, and more. ID verification is a tenet of this approach, and in either case, both are used in automatic settings as well as in-person: Banking apps will automatically verify your identity with codes if you use a “new device”, and any strange activity on your account will flag a person to call you and make sure you’re in control of the activity in question. Process automation of various kinds has found its way into the verification tasks that make financial institutions so secure — and of course, you’ll never have to wait long to get verified again, whether it’s digitally or in person.

Bookkeeping and Expense Management

Bookkeeping and keeping track of expenses is now something that can easily be done automatically in many cases: if you have linked your bank account to a budgeting app before, you already know how true this is. However, there are other uses, such as using automation to collect and create reports of financial activity in these books. In bookkeeping software that has automation as a part of the features, there are even ways to detect problematic financial activity when it’s all been recorded. This kind of insight from a third party is invaluable at catching things that people in control of your business’s finances may not catch for one reason or another.

Tax Reporting

What many individuals and businesses alike take advantage of when they automate their financial services is their tax reporting. By simply answering a few questions, inputting the numbers you see recorded on your other documents, and sending out the results to the IRS, you’ve put your finances in the hands of process automation. Another, more integrated approach is when a freelancer utilizes a service to take a percentage of their income and allot it to quarterly tax payments on its own. Once again, by doing this, one leaves the computer in charge of their finances; however, this type of automation is becoming more and more commonplace, and because of its ease, it will only continue to grow in popularity, much like the other automation seen here.

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