How Hyperautomation Improves Compliance And Transparency In BFSI Sector?

Implementing hyperautomation can reduce operational costs, improve operational efficiencies and enhance customer experience

The advent of hyperautomation creates significant opportunities in several areas of BFSI for improvement in compliance, security, and transparency.

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With the 'digital-first' push becoming imperative post-pandemic, the BFSI sector is witnessing rapid change and increased technology adoption. Demand for digital banking, paperless finance processes, and augmented customer experiences across the BFSI spectrum have led to an increased number of banking and finance institutions turning towards hyperautomation. Instead of leveraging a single technology or platform, hyperautomation uses an amalgam of technologies such as Artificial Intelligence, iBPMS, Machine Learning, RPA etc., that can streamline processes and achieve end-to-end automation while keeping humans in the loop.

Implementing hyperautomation can reduce operational costs, improve operational efficiencies and enhance customer experience. More so, hyperautomation has far-reaching benefits in improving compliance and transparency, making it an invaluable asset for banking and finance institutions that are looking to ride the wave of regulatory changes and stringent norms sweeping the sector.

Let’s take a look at some common areas/use cases where leveraging hyperautomation can heighten compliance and transparency:

Customer onboarding and KYC

Considered one of the most laborious, time-consuming processes in the whole customer lifecycle, hyperautomation can reduce friction by making the process paperless and seamlessly managing diversified customer needs. During the customer onboarding process, RPA with IDP technologies can extract structured /unstructured data from scanned documents or email content to a fully digitized structured format which can then be fed to bank employees to review the exceptions, thereby reducing the manual entry effort and increasing the transparency of data collection and utilization.. Automation technologies can also highlight any discrepancies between the customer forms and customers' KYC documents, enhancing compliance which could be overlooked during manual verification. The intelligent automation technologies can orchestrate all this data to a centralized location for easy and quick access providing automated compliance reporting and audit trails.

Fraud detection and risk management

Automation with AI/ML technologies can process large amounts of data enabling the organization to identify and predict suspicious activities and fraud promptly which can keep the banking and financial institutes compliant, reducing associated risks and penalties. Since most of the processes are automated and auditable, the data can be updated and aggregated in real time allowing employees to gather the reports automatically for instant and transparent decision-making.

Stay up-to-date with changing regulations

For the BFSI sector, keeping pace with the right regulations is important to maintain compliance. For instance, RPA bots can be used to scrape regulatory websites and update policies and regulations to help banks and financial service companies stay up to date. Since the regulations keep changing from time to time, low-code/iBPMS platforms that are instrumental to hyperautomation can help these organisations be responsive, make changes to their processes quickly and be agile in the face of changing regulatory conditions.

Regulatory reporting and audits

Since regulators depend highly on data, data availability, and accessibility become crucial for the BFSI sector.  Intelligent automation technologies can orchestrate all this data to a centralized location for easy, safe, and quick access to data, making it easy for BFSI companies to better manage data and create error-free reports. Cognitive technologies like RPA, AI ML, and NLP can be used to detect patterns and are efficient in automating document reviews, classifying images, and identifying irrelevant content to identify the risks. Data-driven insights across all systems and processes can have a significant impact on maintaining regulatory compliance and improving upon it with audit report generation.

Loan processing

Another biggest area is lending, wherein hyperautomation can help manage the complete lending lifecycle. IDP and NLP technologies can be used to classify, notify the customer automatically for missing documents, and extract data from customer documents automatically, reducing the time and effort consumed in manual paperwork. iBPMS can then feed this data for loan application approval processes with complete audit and transparency between different departments. Credit risk Ai/ ML models can help approvers in the decision-making processes. This way, the complete digital audit trial is maintained at each step for easy reporting, thereby increasing accuracy and regulatory compliance.

Conclusion

As the BFSI sector is forced to rapidly adapt to the changing market scenario, customer satisfaction, efficient operations, better management of data, stricter compliance, fraud mitigation, and employee empowerment have become the top priorities. The advent of hyperautomation creates significant opportunities in several areas of BFSI for improvement in compliance, security, and transparency. The future of the BFSI sector will be driven by automation technologies supported by human workers leading to sustainable and long-term advantages.

The writer, Sireesha Gangavarapu, is the director of Solutions at WNS-Vuram.

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