Digital services link customers to their daily lives. In digital banking, these services must now go well beyond the original capabilities of displaying account credits and debits. Customers expect their primary mode of engagement with banks to be digital, including a full set of value-added services. In addition, stringent banking regulations continue to evolve, and these services must be adaptive to comply. This new level of responsiveness, never imagined when banking operations were first designed, is needed to provide full-service digital customer journeys—ones that bridge any type of interaction with common and efficient servicing.
However, any investment in technology to reduce costs needs to simplify banking operations at the same time to maintain long-term sustainability. Below are five benefits for banks that are ready to embrace such efficiency in their servicing operations.
5 benefits of operational efficiency
1. Retaining customers
Retaining customers in a digital world means that servicing operations must be streamlined and responsive to their digital interactions. But there is no point in having technology to automate servicing unless your teams can adjust defined rules and scripts to changing customer needs. Enable your analysts to define the rules for automation that expedite customer processing without involving technology resources.
2. Reducing cost of compliance
Decrease the risk of noncompliance with an easy-to-access repository of rules that are shared with all authorized personnel. Reducing noncompliance with policies and procedures as formalized code lowers error rates resulting from manual activities and enforces 24x7 vigilance. From this source, traceable decision paths are easily communicated to auditors and internal teams alike.
3. Lowering processing costs
Low-risk, high-volume decisions are often the first to be automated via straight-through processing, removing the cost of manual interception and freeing workers for sales and advisory services. Embedding predictive models into operational streams can help prioritize cases for manual intervention, focusing knowledge worker efforts. Taking this further, ongoing cost reduction can come from digital services—capturing data inputs, conversation bot responses, and activities as part of servicing activity. The advantage becomes a digital history by design, available to be mined and extended over time.
4. Increasing business agility
Keeping business operation policies, processes, and procedures up to date with regulations, technology advancements, and customer and market changes requires adaptable systems. Creating an easily maintained repository of decision logic enables updates to be made once and propagated quickly. An open digital platform that integrates with any data from any source, along with predictive methods that can drive new insights into operations, retains extensibility for new products and services.
5. Expanding services to new segments
Creating efficiency in servicing lowers the associated product costs. This includes streamlining operational processing with automation, as well as running digital services in lower-cost cloud computing environments. When the supporting systems are modernized to be portable, they can be moved to the most economic option available at the time. The associated savings can be used for new innovations, like products for the underbanked, customized financial education for young people, or ways to address new segments of the market.
Now that you know the benefits of operational efficiency, how do you get them? An open technology platform that promotes operational efficiency helps, but you need more.
Establish adaptive business processes
Incremental renewal of operations requires rethinking what is relevant to new customer journeys. Reflecting this in banking experiences means rethinking what works today in digital touchpoints, automating manual inefficiencies with analytics. Given that the banking climate continues to shift, an open digital platform is expected to provide the greatest longevity. It is interoperable not only with your internal systems and processes, but also with other external digital platforms.
Reduce, reuse, and recycle with containers
The strength of efficiency will be defined by how well the organization can reduce incremental latency and cost from ongoing servicing. Streamlining one operational process at a time needs to be considered as part of a codification of the business. Building standard rule sets, predictive models, and data—from anywhere and at any speed—all need to be part of the platform. With containers created on demand, banks are no longer reliant on technology work requests. Business analysts, technical analysts, and developers can share the same underlying capabilities through their own containerized suite of tools.
Red Hat’s digital platform
Red Hat has created an open source digital platform that helps liberate banks from manual toil, empowering teams to build automation into everyday banking operations. For example, one global financial service provider now can provide provisioning of digital services supported by reusable processes to new regions in hours instead of weeks.
To help you assess your firm’s strategy, refer to the executive checklist for greater operational efficiency within your organization.