By Neil Murphy, Global VP at ABBYY
The latest BAI Banking Outlook identified three areas among the top business challenges and priorities for financial services leaders: new customer acquisition, enhancing the mobile channel experience and making better use of data about consumers to improve products and service recommendations.
Consequently, financial service organisations are digitally transforming every aspect of their business, from consumer facing mobile applications to back-office workflow optimisation, to meet the increasing demands of the market and maintain evolving SLAs and compliance regulations. But despite innovation also being linked to increased productivity and cost savings, many banks are not using artificial intelligence (AI) technology and automation to their full potential.
Here, we take a look at how mobile onboarding and processes intelligence can improve customer acquisition and enhance the experience.
Digitally Transforming Customer Onboarding
Consumers told BAI they want to be able to start in one channel and finish in another without starting over. This omnichannel experience typically starts with mobile, however studies show 40 percent of consumers abandon applications after initiating the process, which is contributing to the $98 billion (£77 billion) left on the table by companies who fail to provide simple experiences.
The reasons cited are complexity of digital forms and heavy requirements for manual typing as the biggest barriers when it comes to onboarding of customer information. Additionally, the requirement of the consumer to download an app in order to complete these processes often presents another barrier. Banks focused on eradicating these barriers to improve customer acquisition are enhancing their digital channels with more sophisticated mobile captures technologies.
With intelligent mobile capture, banks enable customers to focus their smartphone’s camera on payment slips, invoices, ID cards, passports, or other documents they are required to submit, and capture information directly into the fields of your back-end systems for further processing—no extra steps required to download an app. Mobile web capture solutions make it possible for customers to use a web browser on their mobile device to automatically capture images of documents in real time to quickly complete the sign-up and account opening processes. This technology consistently enables banks to provide a smooth customer onboarding experience with higher completion rates.
AI technology is used to detect real-time mobile input of relevant data, provide speedy retrieval of image files, and minimize the steps required to fulfil a task for maximum ease of use.
The digital transformation of customer onboarding doesn’t end with customer acquisition. To be fully successful and earn customer trust and loyalty, financial institutions need to be able to track, monitor and take action on the processes customers are engaged in before they lead to a negative experience.
Process Intelligence Enhances Operational Efficiency
The financial industry is highly process oriented because of its service nature, however, banks struggle with the ability to completely review their processes. Most think they know how their processes work but it is often far from reality. It’s a critical pain point as organisations start to realise there are blind spots and they may need to diverge from original process. New advance machine learning technology called process intelligence (PI) will enable banks to analyse less structure processes, identify opportunities for improvement, increase the speed and accuracy of executing the process, all while improving the customer experience.
The industry is unique because of its complex workflows across different departments, people, and even locations. However, due to the intangible nature of the industry, these workflows are all well documented and recorded. Every action, event, or transaction is recorded in a log along with many other important attributes describing who did what, where they did it, and lots of other information about things happening operationally. These workflows typically span across different systems that do not all link together perfectly, thus creating silos of information and an incomplete picture of the businesses operations.
These factors in addition to the variable nature of the day-to-day processes of the industry make it hard for banks to figure out what the processes actually look like in an “as-is” state.
Without a clear picture into process execution, leaders have been unable to answer vital business questions due to the high levels of variability in the ways processes function. How do they ensure processes are being followed according to plan? How do they even know what those processes are and how they operate?
Process analytics delivers sophisticated insights gained from process data. With the right technology, leaders can now see a complete view of their end to end process in its “as-is” state. This is especially important when some of the largest contributors to waste in the financial industry are handoffs for approvals, requests waiting to be processed, and customers waiting in queues.
It’s important that you can find exactly where the problems in your process are occurring and not just that they are happening. Banks can easily discover the bottlenecks of their processes and where the process is taking deviations. This helps to uncover exactly where these handoffs are occurring and how long requests are waiting so that you are able to find more specific solutions to these problems.
Furthermore, financial services can use past and current performance to serve as a guide for future performance. Workers can feel more confident in their decisions and be guided by prediction, which is powered by machine learning, in order to have the best chances for success.
Whether it is with account opening, crediting, loan applications, payment, mortgage processing, or any other process, by focusing on mobile to acquire customers more efficiently, then tracking the various processes initiated by mobile and other channels, banks can effectively leverage AI in their digital transformation journey.
HOW TO MANAGE YOUR CASH FLOW IN UNCERTAIN TIMES
While the world is constantly changing, probably at a faster pace now than ever before, businesses need to manage cash flow and costs to drive success in uncertain times, says Matthew Thorpe, partner at Haines Watts Essex.
Managing people and expenses
There are certain costs that you just can’t avoid as a business – to keep your operation running seamlessly, but scrutinise the detail and cut down on any non-essential expenses. Check things like your SaaS subscriptions and look out for costs that auto-renew and if you do cancel, remember to also cancel your direct debits too.
You might want to put a freeze on hiring new people, but ensure that other roles and responsibilities are clearly and efficiently assigned across your team. The Coronavirus Job Retention Scheme (CJRS) has been introduced by the Government to help UK employers access support to continue paying part of their employees’ salary to avoid redundancies. Affected employees are classed as “furloughed workers”.
Once furloughed, the employee cannot work or they will not qualify for the scheme. For businesses that perhaps need to go further, there may be some roles they don’t need any more, but businesses should work sensitively with people to manage this.
Cash is king
In uncertain times, owner managers will need to keep operations going to ensure financial stability. You should look to manage debt more efficiently by negotiating extended payment terms with creditors. You could also renegotiate loans for longer repayment terms to give yourself a lower monthly payment, helping the business to set some cash aside each month.
As a business owner, you need to create a cash flow projection and update this regularly if you are to improve things. You can do this using financial information to create a picture of how the business will look in the next 12 months. The forecast needs to show revenue sources and expenses, which will show the ups and downs of business income and can be used to make sure that enough finance is in place.
While banks and other finance providers recognise that the cashflow of a business may be disrupted by the impact of Covid-19, they are still going to want to see that you are viable and continue to trade in these uncertain times. Make sure your business is organised and don’t let disorganisation cause unnecessary issues. You can evidence this by having detailed forecasts; current order books and projections (as best as possible).
Having instantly accessible, accurate financial information allows you to plan effectively, spot issues before they become problems and manage your money in the most efficient and rewarding way.
Software is now incredibly user-friendly and accessible from anywhere. For a business owner embracing the technology, this means:
- Invoicing can be done instantly when a job is complete, emailed to the customer with an easy to use link to a payment platform.
- Comparison websites can automatically monitor and help maintain lowest cost for things such as light & heat, insurance etc.
- Technology can be used in place of face-to-face meetings. It can also enable them to adapt production lines to different demands.
All of these things and more, used properly, can make managing your business finances quicker, easier and often cheaper. You will also be able to bring clarity to where your business stands and prepare for the next steps.
HOW FINANCIAL SERVICES CAN GET TO GRIPS WITH RISING SUPPLY CHAIN RISK
By Alex Saric, smart procurement expert, Ivalua
UK businesses have never been more dependent on their suppliers to help them deliver goods and services to their customers. Be it retail, manufacturing or financial services, suppliers have a vital role to play when it comes to innovation and meeting customer expectations. However, as supply chains become increasingly global, businesses are potentially exposing themselves to more risk than ever before.
This is especially true in financial services. Whether it’s the impact of geopolitical events like Brexit or global tariff wars, supply shortages, security or the businesses impact on the environment, an organisation’s failure to identify and mitigate risk could see millions wiped off its share price, and its corporate reputation left in tatters. Risk can present itself anywhere and at any time, so financial services firms must be ready to address it. However, many simply don’t have the ability to evaluate suppliers for risk factors, leaving them wide open to business operations being hindered, or being slapped with financial penalties.
More suppliers, increasing risk
One reason why financial services firms aren’t able to evaluate suppliers is the breadth and scale of today’s supply chains. For example, French oil company Total said in in a recent human rights briefing paper that they work with over 150,000 direct suppliers worldwide. This is just one example of how large and varied the roster of partners has become. Research from Ivalua has found that financial services businesses on average are working with around 3,600 suppliers annually, which is evenly split between UK-based and international partners. That number is expected to rise, with 60% expecting the number of suppliers they work with to rise.
The expanding nature of suppliers is only going to expose financial services firms to more potential risk than ever before, yet 78% say they face challenges gaining complete visibility into suppliers and their activities.
A lack of supplier visibility leaves businesses unable to identify and mitigate against supply chain risk. In fact, almost three-quarters (73%) of financial services firms have experienced some type of risk during the last 12 months. These include; supplier failure (43%), environmental impact, such as pollution or waste (35%) and supply shortages (45%). Supply shortages can be among the most damaging to a business, as seen by both the KFC chicken shortage which closed stores, and the summer 2018 CO2 shortage which caused companies such as Heineken and Coca-Cola to pause production, impacting supply across Europe during the World Cup.
Businesses unprepared for the worst
One way financial services firms can better prepare for risk is to ensure they know what to plan for to reduce the impact. However, whilst some say they have a contingency plan in place to deal with risk, many of them are unprepared. Financial services firms admitted to not having comprehensive and deployed contingency plans in place to prepare the supply chain for risk such as; natural disasters (68%), supply shortages (67%), geopolitical changes (65%), environmental impact (63%), supplier failure (62%) and modern slavery (50%).
In order to effectively prepare for these types of risks, it’s vital that financial services businesses fully understand their suppliers, their business environment, global variations in regulations, geopolitics, and a host of other factors. But for many, there are multiple challenges when it comes to gaining this understanding. A prevailing factor is an inability to gain visibility into all suppliers and activity because supplier management data is stored in multiple locations and formats, making insights difficult to access. This leaves teams unable to review supplier activity and assess compliance.
Making supplier management smarter
It’s imperative that financial services businesses are able to respond or prepare for supply chain risk. Clearly, much more needs to be done to ensure they have complete visibility of suppliers, especially in an era where regulators can levy heavy fines for GDPR breaches and scandals spread in minutes over social media. These types of risks can be reduced in the future if procurement teams have a 360-degree view of suppliers which will help with contingency planning and risk management.
For example, in the instance of supply shortages, plans could be put in place that identify alternative suppliers to ensure any shortages do not impact end users. This type of supplier collaboration is paramount when it comes to managing and mitigating against supplier shortages. When it comes to regulations, financial services firms can’t allow a lack of visibility to limit their ability to ensure all suppliers are compliant.
To do this, teams must take a smarter approach to procurement that gives complete visibility into suppliers throughout the supply chain. This will allow financial services firms to identify and plan for risk, reducing the potential damage, and ensuring they are working with and awarding business to low-risk suppliers. Supply chain risk is rapidly becoming an overarching concern for financial services firms, but by providing the ability to assess suppliers, they will have all the insights they need to mitigate the impact on business operations.
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