Technology is changing the course of banking by leaps and bounds, and digitization is the new norm. Artificial intelligence is complementing the efficiency of regular bank employees. AI-driven automation is augmenting the workflow with enhanced efficiency and fewer turnaround times than traditional banking.
A cumbersome manual process involving many paper-based documents is being processed in less time. Financial institutions are leveraging technology and machine learning to scale operational efficiency, achieve better customer experience and reduce overhead costs. All the verticals of banking, especially lending, are witnessing a paradigm shift by way of digital banking by way of loan origination solution.
Features of Digital Banking:
Here are a few aspects of digital banking that are already servicing banking customers and will be the preface to the future of banking technology:
Chatbots will be digital employees that assist customers in handling regular inquiries related to accounts, card services, digital wallet, or loans. These machine assistants service the customers by helping them with loan applications, account opening forms, and related banking services. At every step, a prompt detailing what needs to be done appears, thus saving time for the customer who may otherwise actually walk into a bank for a simple form submission.
Recommendations on documents submitted by uploading a scanned image are also carried out digitally. Most of the routine banking work can be done with the ease of a smartphone. These services are as personalized as traditional banking, albeit more efficient in terms of customer engagement and experience because of the less time to deliver the results.
Digital lending is now automated with the advent of loan origination software that can be personalized and customized per banks’ requirements. Automating the workflow process of loan origination is an end-to-end process that caters to a loan’s entire life cycle. It is paperless, time-saving, efficient with accurate results, employee and customer-centric with higher satisfaction rates, and accounts for regulatory requirements and risk compliance.
Banks and lending institutions have scaled their SME business by introducing SME Digital loan origination solutions allowing small businesses to grow their operations. The reduction in time taken to get a working-capital loan approved through a bank because of the ease of digital lending is changing the scape for both banks, who are enablers and small business end-users.
Neural networks enable data integration from API interfaces that verify a loan applicant’s financial data before assessing the ability to repay the loan in time. As the human intervention is minimal to nil and the automation is error-free, due diligence in approving and disbursing a loan becomes faster and more accurate. This feature helps mitigate the risk that a bank lends money to individuals and businesses.
Mortgage lending is more complex than other loans due to regulations that must be adhered to. Still, lenders are accelerating with their loan automation solutions a. Globally, banks are preparing to automate more than ninety percent of their asset-backed lending to scale their operations. The growth translation in new home loan businesses is peaking and is set to grow steadily.
After teething problems with digitization, banks have understood that automation cannot be a sum of parts operations where only a few functions are automated. At the same time, the rest still follow legacy banking. Automation returns optimum results only when it is an end-to-end process, not a piecemeal operation. Without complete automation of the entire cycle, the results can be more disappointing than the existing barriers that make legacy banking undesirable.
Any attempt to launch the automation phase by phase within a product’s life cycle will add more time, disinterest the customers, and result in a bad launch that will distort the big picture. The purpose of automation is to reduce the complexity of legacy banking. Only complete automation of a product cycle will serve the prospect it was set out for.
Advantages of Digital Banking:
The advantages of these futuristic digital banks are not limited to a few features. There are quite a few benefits that banks or lending institutions can consider. Let us evaluate a few of the benefits of digital banks:
- Easy access: The AI-driven solutions are device and location agnostic and can be accessed from smartphones or ATM kiosks. Accessing these unmanned digital solutions 24/7 and 365 days helps increase customer engagement.
- Efficiency: As neural networking helps in data integration, automated solutions take less time to achieve results efficiently and accurately. It is also error-free as the system is back-tested before rolling it out.
- Sustainable scalability: The increase in operational capacity will require extra manpower in legacy banking. But automation of the process gives results within a concise time. Sometimes it takes less than a few minutes to check the results.
- Integrated databases: Digital solutions do away with archiving data in paper or inaccessible CRM formats. As all the databases within the bank are integrated, information can be accessed seamlessly and without delay in email response turnaround time.
- Risk compliance: Fraud control is minimized as the due diligence of the customer data is cross-verified from other approved databases through neural networking like other banks’ systems, tax returns, and other financial data before servicing a loan.
The future of digital banking is driven by AI and powered by automation. Banks and fintech companies are looking to seamlessly integrate these digital solutions into their existing database. The powerful AI analytics with easy-to-read dashboards for customers and backend employees help achieve the dual benefit of enhanced customer experience and elevated bankers’ roles. All this is performed at a fraction of the cost of legacy banking minus its lacunas like workflow delays and under-achieved productivity.
Digital banking operations are also secure and protected and meet the stringent regulatory framework without compromising financial systems’ integrity and intermediaries’ integrity. When decision-making takes, less time and better risk metrics are in place, translation into scalable profits and happy customers is achievable.