Banks are creaking under the strain of not having end-to-end digital processes.
Currently, bank customers can easily manage their accounts online. It is also possible to apply for a loan online in just a few minutes. But behind the scenes, not everything is everything fast and digital. There is a lot of noise in the digital structure because many processes are still only partially digitised. This greatly delays banks on a day-to-day basis: it makes them slow and inflexible, while their cost structures are not sustainable.
Outdated IT makes it incredibly difficult for banks to meet rising customer expectations or new legal and regulatory requirements. Ultimately, they risk falling further behind fintechs and platform operators, who lure customers away from them with attractive services. In the corporate customer business, in particular, the need for digitisation is obvious.
Banks urgently need more efficient processes. In addition, enterprise customers’ businesses now function very differently to how they did before the Covid-19 pandemic. While the focus used to be on face-to-face discussions with clients, in which consultants and clients routinely filled out paper forms, today’s corporate clients want to work remotely with their bank.
And while banks have advanced with their digitisation lately, many processes have remained fragmented, which has only served to resolve urgent individual issues as quickly as possible. A proposed solution: new online portals so that customers can submit their applications and forms digitally.
However, the processes behind digital solutions have remained the old and inefficient ones that still require a lot of manual intervention. If automation solutions were introduced, for example, to process the increase in the number of loan cancellations and instalment suspensions during the pandemic, they are independent and the opportunity to digitise end-to-end processes has been lost.
Breaking down silos
End-to-end digital processes that do not stop at departmental or company boundaries are what banks need today. If they do not see checks as a standalone task to prevent money-laundering, the department can pass on valuable information about company mergers or new co-owners to risk management and sales.
But how do individual areas of the bank merge digitally when IT and development resources are scarce and consumed by the complex maintenance of legacy systems?
Management tools provide an output that not only combines all documents and data from individual processes, digitally maps and automates workflows, but also engages departmental staff in scanning through low-code capabilities. Specialists can digitise their processes completely independently and adapt workflows or business rules without IT department support if requirements change. In this way, digital innovations can be implemented quickly and efficiently, and are much better aligned with the technical requirements and day-to-day issues of the business than if IT had to take on most of the digitisation tasks on its own.
With a management tool kit and low-code capabilities, banks are starting to digitise but more momentum is needed, as competitive and regulatory pressures are likely to increase in the coming months. All of this will lead to more competition in the financial sector, as well as increasingly strict controls, and will further increase the need for digital solutions and processes.
Lenildo Morais has a Master’s in computer science, and is a teacher, researcher and project manager.
