Why is Financial Services Automation Important?

In today’s digital world, financial institutions have had to adapt to increasing demands for more efficient and cost-effective solutions. ‘Fintech’ (financial technology) has exploded around the globe and is expected to grow at a CAGR of around 20% over the next four years.  As a result, financial services automation has become a hot topic due to its ability to reduce costs and streamline operations.

Automating processes makes it easier for companies to manage their financial products and services with fewer resources and less effort than conventional methods. Let’s explore why AI-enabled automation, in particular, is critical for the financial services industry, as well as how it helps improve efficiency, accuracy, and cost savings that ultimately elevate customer experiences.

What is AI document automation?

AI document automation is a technology that uses artificial intelligence (AI) and machine learning capabilities to automate every stage of the document lifecycle — intake, preparation, data capture, validation, post-processing, and reporting. This type of automation helps organizations save time and money by eliminating the need for tedious manual tasks like data entry.

AI-powered document processing can be used in various industries but is especially beneficial for the financial sector. Companies are often tasked with processing large volumes of documents, such as statements, reports, contracts, invoices, receipts, and more. Automation provides the speed and precision financial institutions need to effectively manage their paperwork.

How financial services automation benefits companies

Automation is a vital solution for finance teams, as it helps them streamline their processes and increase productivity. By automating certain tasks, such as account reconciliation, transaction processing, and loan origination, organizations can significantly reduce their labor costs and increase efficiency.

InnovationPath, an IT and RPA (Robotic Process Automation) consulting firm, demonstrates the power of IDP by providing its customers with a 98% automated solution. This allowed the company to downsize its team from 13 to 3, resulting in significant cost savings on wages and overhead.

Furthermore, automation improves accuracy and reduces the risk of human errors, which can be costly from both monetary and reputation standpoints. Here are some of the top advantages of financial services automation for banking, insurance, accounting, investment management, and more: 

Cost savings

Automation provides immense cost savings to financial institutions by eliminating the need for numerous manual labor processes, which reduces overhead significantly. A financial automation platform can also cut costs associated with training and recruiting new staff, implementing and running multiple software, updating processes when regulations change, and maintaining, upgrading, and servicing hardware.

More accurate reporting

Financial services automation allows institutions to produce more accurate reports faster and more efficiently than if they relied on manual labor to process information and prepare documents. Automated reporting also increases accuracy by eliminating typos and reducing the inherent risks of human error that is common when using traditional methods.

Improved risk management

Automated financial services offer a higher level of risk management capabilities. By automating critical processes, such as customer identity verification, data collection, payment tracking, and more, financial institutions gain improved oversight over data while minimizing their exposure to potential risks.

Better compliance control

Automation makes it easier to track, review, and audit transactions, documents, accounts, and activities required for successful compliance management. It not only helps ensure that regulations and policies are followed consistently but can also alert staff instantly of discrepancies.

Additionally, having automated tools on hand helps companies save time when rolling out new procedures that meet standards without causing bottlenecks or errors.

Increased scalability and flexibility

Since AI automation is a flexible solution that can process all types of documents in bulk with speed and precision, it eliminates overhead associated with scaling up or down due to fluctuating performance, market conditions, etc. Non-automated processes can’t do this quickly or affordably enough, given their limitations.

Stronger data security and privacy protection

Automation allows financial organizations far greater control over their data, which is vital for ensuring the confidentiality and integrity of sensitive information. Financial services automation also makes access far more secure by providing access rights and controls. 

Furthermore, an automation platform delivers state-of-the-art security against potential risks like hacks, information misuse, and data loss that could result in catastrophic damages. 

Enhanced customer experiences

Automated financial processes provide customers with faster speeds of service and better accuracy than conventional methods. AI automation allows customers to make changes without having to wait days or weeks for their requests to be processed manually, which greatly enhances their satisfaction levels while using a company’s financial products or services.

Deeper insights

By automating processes, businesses gain access to a wealth of data that can be used to better understand customer needs and preferences, identify trends, and improve sales forecasting. These insights can be used to develop more effective strategies for optimizing operations or upgrading services.

Kiwi, a leading travel tech company, leveraged financial services automation to help its Accounts Payable process invoices more efficiently and accurately. In addition to reducing manual workloads, automation freed Kiwi’s staff to focus on more advanced tasks that boost the quality and cost-saving for budget reporting.

Gain a competitive edge with financial services automation

Automation offers financial firms the opportunity to increase efficiency, reduce costs, and improve accuracy while elevating customer service. By automating processes with AI technologies, financial institutions can ultimately boost their profitability and ensure greater security throughout their operations.

Additionally, AI automation allows institutions to comply with changing regulations with ease and have peace of mind that they’re protected against potential risks. Book a free demo with Rossum to see how the fastest and most accurate financial services automation can position your company as an industry leader.

Transform your financial operations

Unlock greater efficiency, accuracy, and profitability with financial services automation. From lower costs to enhanced experiences, discover the power of AI.