Automation Strategies in Banking

Exploring the automation challenges faced by banks, the webinar covered issues like compliance, legacy processes, improving efficiency, APIs, data management, and third-party vendor integration.

The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

On 23 May, UK Finance’s Director of Digital Technology and Innovation, Phillip Mind, led a Confirmation-sponsored webinar on automation in banking. The panel comprised Elvis Crespo, Deputy Head of Compliance, Industrial and Commercial Bank of China (ICBC); David Hagerty, Senior Journey Developer at NatWest; and Confirmation’s Global Strategic Account Executive, Simon Edie.

Top Challenges and Opportunities

Phillip initiated the first webinar poll, asking the audience to prioritise their top challenges and opportunities. The leading responses were adopting new tech for streamlined processes (76.7 per cent) and staying compliant with widening regulatory responsibilities (65.1 per cent).

David emphasised the importance of integrating new tech to link different platforms. NatWest is addressing two significant challenges – making new and legacy platforms communicate efficiently and achieving consistent customer information across the bank. “This opens the door to automation that was impossible before, because those systems weren’t connected,” he said, stressing the value of “air traffic control and governance”.

Elvis highlighted the growing demands of compliance, particularly in data protection and cross-border trading – “new systems must be implemented across the organisation”. He recommended engaging senior management in replacing legacy systems, due to the complex governance required. With many players taking on different roles in different compliance processes, “we can create quite a mess, so we need proper project and process structures”.

David also advocated iterative development and rigorous testing when adopting new tech. He wasn’t surprised to see the audience’s most important goal for 2024 was workflow improvement (84 per cent). “There’s still great inefficiency out there, despite all the lean and agile programmes. Technology moves so quickly that what was once classed as efficient is now behind the curve.” 

Investing in APIs

Phillip’s third polling question addressed the challenges banks aim to solve by investing in APIs. The two most popular answers were limiting reliance on outdated technologies (72 per cent) and limiting manual data entry (69 per cent). 

“One of our banking clients,” said Simon, “used to take 15 minutes sourcing confirmation data from multiple systems before emailing it, or – worse still – printing it and posting it to the auditor.” However, their APIs now speak with the bank’s system to populate the client’s data and return it automatically and securely to the requesting party. “And a top ten firm’s turnaround dropped from three weeks to under three days.”

IBCB prioritise automating cross-border payments. “We map hundreds of information fields against our own and our counterparties’ systems,” said Elvis. “With APIs there are far fewer manual transactions.” They also use APIs to meet legal obligations, for example on international sanctions.

David noted that internal APIs had cut customer inquiries about payments from a manual-intensive, 24-hour process to a 20-second response rate. “Sometimes, when we’ve taken a customer journey as far as we can, an external vendor’s API-based solution has lifted it to the next level.”

Selecting Vendors and Managing Data

Simon offered key criteria for selecting external vendors – financial stability, secure and easily integrated solutions, and GDPR-compliance. How good’s the onboarding, in-person training, customer support, managing updates and upgrades? Above all, consult existing users to assess quality and value for money.

An audience member asked if the panel had dedicated data teams for classifying and managing data. “Yes,” said David, “there’s huge mandatory and regulatory demand for sourcing specific data, and data’s vital for training AI systems.”

The Panel’s Takeaways

Phillip noted that banks are evolving and “becoming tech companies”, integrating technology throughout the entire banking process. He asked the panel for their own takeaways. 

David advised taking a step back to understand the customer journey you want to automate, keeping it clear and consistent – “preparation for automation is critical”. Elvis sees investing in suitable technologies and proper management as the realistic way to automation.

Simon recommended being early to automate, “because our most successful clients are those who implemented technologies first and now lead in client experience and bank efficiency.”

As banks navigate the complex landscape of automation, addressing the challenges and seizing opportunities with the right technology and strategic planning will be key to their success. 

Thomson Reuters Confirmation is the leading digital platform and global network for confirming financial data. We help auditors, bankers, lawyers and businesses around the world work more efficiently, find truth in financial data, and detect fraud. Recognised as the industry standard for digital verification worldwide, today Confirmation helps 1.5 million customers in 170 countries to confirm financial data.