There are few areas of business, or even of life as a whole, as important as finances. Financial needs are a common concern everyone shares. That makes it a natural opportunity for technology to make a difference, whether that’s through helping with consumer finance, corporate fiscal concerns, or anything in between.
While the fintech revolution is well underway, it has a ways to go before it can catch up with cutting-edge technology. Here are a few suggestions for areas that need improvement, both now and in the future, to help bring fintech automation up to speed.
AUTOMATED INTEGRATION
Fintech often operates in its own bubble. Accounting departments may be critical to a business. And yet, often they remain isolated from other areas of a company. This creates siloed information that can restrict business activity.
Many companies have been moving toward IPaaS solutions to help unify their organizations. The acronym stands for “integration platform as a service.” This refers to a cloud-based software solution that helps integrate the various software tools a business uses. It connects applications, maps out data, and moves data between different API endpoints as needed.
The IPaaS concept has been around for a while. In fact, it is already developing further into new integration-led automation platforms. These streamline the connection between applications and the exchange of information even further.
With that said, fintech remains behind in IPaaS tech in many respects. If fintech is going to keep pace with the rest of the tech sector, it needs to develop in the key area of automated integration. The ability to integrate and share information with other tools is an essential element fintech needs to adopt to keep up with a data-driven future.
AUTOMATION OF APPLICATIONS
Another area where fintech must improve is in the verification of sensitive data. The SolarWinds hack served as a stark reminder that cybercriminal activity is lurking behind every corner of the internet. And, of course, this only serves as a reminder because consumers have been dealing with an endless string of cybercrime news for years. It seems like every other month a major hack is announced to the public.
The point is, it’s understandable that banks and financial institutions would be hesitant to put activities as sensitive as validating and approving applications on autopilot. If cybercriminals hacked a financial system, it could be a serious problem. According to identity-verification platform Okta, nearly 60% of customers hesitate to do business with any company that has suffered a data breach. However, the percentage of mistrust goes up precipitously when a breach takes place within the financial services sector.
Nevertheless, the concept of automation is naturally applicable to mundane activities, such as the application approval process. This is an area ripe for improvement as lenders attempt to work through an endless stream of applications.
That said, this isn’t an untouched segment of fintech automation. There are current software solutions that automate the verification of various consumer financial applications. However, the activity remains murky and untrusted by many consumers.
The financial industry needs a more solid, dependable solution. If fintech companies can create a trusted automation process, it can calm consumers’ fears. It can also encourage financial activity through sped-up approval time and reduced human errors.
RPA MUST BECOME MAINSTREAM
Robotics process automation (RPA) has been developing for a while now. What began as a field of research has moved into real-world application, albeit at a slow pace.
In spite of its slow development, RPA continues to be one of the most promising ways to reduce operating costs. It also helps increase the efficiency of banking operations. The ability to utilize AI and machine learning to conduct a variety of mundane tasks is an essential next step in fintech automation.
Growing fields such as data analytics and process mining must find greater applications within existing banking services. The information these disciplines produce must integrate into machine learning and AI tools with ease. This can help organizations identify and improve their operations from within.
FINTECH MUST ALSO EMBRACE EXTREME AUTOMATION
Those operating at the forefront of the financial industry are familiar with the current applications of RPA, limited as they may be. But even when existing solutions come up, these are all too often applied to internal operations like those listed above.
Those who wish to truly push fintech to the next level must look for ways to utilize the latest RPA tech across their entire enterprise. They must embrace the concept of extreme automation by looking for any and every way to integrate robotics into their systems.
For many, this will require a step backward. The haphazard development of many RPA concepts has left a patchwork series of solutions. As fintech automation improves, financial institutions must find ways to apply the new technology to customer-facing activities as well.
This ability to apply automation throughout the customer lifecycle suits few areas of business as much as the finance world. The industry can be cold and calculated, operating on financial and mathematical concepts that are ideal for the robotic handling of many customer interactions.
With that said, RPA can and should be applied to more than just streamlining internal operations within a banking organization. They should also find uses in customer acquisition, conversion, and retention. From data analysis to automating mundane procedures, extreme RPA automation is a reality that has the potential to revolutionize the fintech industry.
Fintech has come a long way already. From online banking to managing digital interactions and everything in between, there are countless ways technology is impacting the financial sector.
However, the effective use of automation is required if fintech is going to take the next step. And if fintech hopes to keep pace with the rest of the tech industry, then tools like extreme RPA automation and automated integration are necessary.
Chalmers Brown is the Chief Technology Officer of Due.
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