Rupal Karia, VP & Country Leader UK&I at Celonis
Banks are facing a time of enormous change, with artificial intelligence (AI) holding the promise to change the way many financial institutions work. Trends such as open banking and industry convergence are also triggering changes in the ways banks operate. Amongst this, leaders in the sector are under relentless pressure to cut costs while still improving customer service and satisfying regulators. Trying to keep all these plates spinning is hard enough, but the way banks have grown and expanded their digital capabilities has led to a ‘great disconnect’ developing within them. Many banks have systems which don’t work well with each other and departments which don’t speak the same language. It’s never been more urgent for banking leaders to break down these barriers and ensure their business is unified in its approach and aims.
Within institutions operating in this siloed, disconnected way, business processes become hard to see and understand. This means that it’s harder to analyse and improve them, and it becomes more difficult to add or implement new technology. Important signals are ‘lost’ within the organisation, and value is lost across the entire value chain. To make these organisations more efficient and to prepare them to embrace technologies such as generative AI, leaders need a shared understanding of how processes actually run and a shared vocabulary to talk about them. This is where process intelligence comes in.
Process intelligence uses process mining to bridge the ‘gaps’ between departments: analysing processes such as financial transactions end-to-end, across different IT systems and business applications. All too often in banks, there are three versions of the truth: how a process was designed, how people think it works, and how it really works. Process intelligence creates a ‘living’ digital twin of the entire bank, which reveals how processes really work and helps them to reduce the disconnect. People can (often for the first time) see what is actually happening in their processes, enabling them to adopt new technology, and to improve overall efficiency, customer service and compliance.
Embracing technology
To realise value from their AI investments, businesses need to ensure they have a high-quality source of data about how their processes actually work and the unique business context within which it operates, i.e. KPI definitions, improvement opportunities or what makes something “good” or “bad” for the organisation. The more structured data and context about your business you are able to fuel AI tools with, the better they can become at spotting patterns and uncovering potential new services. The more trustworthy the input data is, the more trustworthy the output is as well. The question then moves to how businesses action those insights and assess the best way to implement the findings.
Using digital twins of the organisation, fuelled by process data, business leaders can make clear-headed decisions about how and when to innovate. Many banks are adopting cloud technology and even taking a cloud-native approach, grappling with new challenges of cybersecurity. Others are experimenting with embedded finance, where financial services are embedded into other apps. Innovating in this way requires full understanding of processes. Using AI-powered tools, banks run real-time diagnostics through the ‘digital twin’ of their organisations to test their ideas. This highlights where new technology can offer value opportunities.
Putting the customer first
A seamless customer experience is a key competitive advantage in today’s banking world, with customers expecting everything to be simple, smooth and instant. Process intelligence enables financial services organisations to capture data seamlessly across multiple systems and optimise business processes across departmental silos, meaning that it’s easier to respond rapidly and deliver results for customers. It also allows business leaders to home in on onboarding and servicing inefficiencies, such as delays in credit approval or issues around the opening of digital accounts, which lead to delays and consumer frustration.
With banks facing competition from new fintech organisations and from apps that offer engaging, rich customer experiences, companies in the sector need to constantly evaluate how they are serving customers. Process intelligence is key to identifying these improvements and is already delivering results. To take just one example, process intelligence has enabled one of Europe’s largest banks to process credit applications four times faster and open 98% of bank accounts on time.
Regulation and sustainability
Process intelligence can streamline the process of regulatory compliance, in multiple ways, homing in on repeated errors and highlighting problems. Armed with a process intelligence tool, it’s easy for leaders in the sector to identify patterns of recurring corrections, meaning the problem area can either be automated, or leaders can enact changes in how the initial reports are generated. Process intelligence can also help to reduce the need for manual value adjustments and reconciliation, by reinforcing validation steps and improving reporting timeliness by actively monitoring each step to offer a warning of any expected delay.
For banks and other financial service institutions, sustainability will be an increasingly urgent priority in coming years, with Gartner predicting that 90% of institutions with assets over $1 billion will have appointed a chief ESG officer by the end of this year. Process intelligence is the perfect first step for curbing emissions and making gains in sustainability. For many financial services organisations, the data is already there, but buried in software such as Enterprise Resource Planning (ERP) and spreadsheets: process intelligence shines a light on this, integrating data from multiple sources, enabling sector leaders to zero in on where there are gains to be made, both in their own processes and in their upstream and downstream activities. Often, the hidden value opportunities highlighted by process intelligence also offer sustainability gains, allowing businesses to boost their ‘green line’ and their bottom line at the same time.
Facing change
The banking sector is facing a period of rapid and unprecedented change, and the pressure to cut costs, deliver innovative services and comply with regulations has never been higher. For businesses in the sector, understanding and improving their processes is an urgent priority: the obstacle is getting departments to understand processes end-to-end, rather than focusing on their specific element of it.
Process intelligence will be a key differentiator for banks, helping to achieve improved customer service, compliance and sustainability, as well as a stepping stone to future innovation with emerging technologies such as generative AI.
