Microsoft Power Platform for Process Automation for Financial Services and Insurance
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What if we told you there was a way to optimize financial services business processes, increase performance and productivity, lower operational costs, reduce security risks, and eliminate human error — all at the same time?
Though it might sound too good to be true, you aren’t being sold a false bill of goods. This is the promise of business process automation (BPA), a strategy that leverages ever more powerful computer software to take on responsibility for increasingly complex business functions. BPA has undergone a renaissance in the last few years with the emergence of more powerful AI-enabled software coupled with significantly simpler-to-use tools for building BPA workflows. Highly capable BPA systems can now be created by non-technical teams to deliver exciting new gains in efficiency, cost-savings, and, of course, digital transformation.
In this article, we’ll dive deep into BPA, exploring the benefits, challenges, and opportunities it presents for financial institutions. OR – jump to the end and get started today with our special offer!
What is Business Process Automation?
Business Process Automation (BPA) is fairly self-explanatory, in that it refers to the use of technology to automate otherwise manual business processes. In this case, a “business process” describes any set of actions designed to achieve a goal, particularly those that are highly repetitive or may involve multiple IT systems. Today’s BPA tools are sophisticated enough that financial institutions can automate entire processes end-to-end or just individual steps embedded within a larger process — whatever level of granularity best serves the business’ needs.
The core objective of BPA — eliminating or greatly reducing the need for manual intervention — enables organizations to streamline, standardize, and accelerate workflows, which in turn drives efficiency gains and cost savings. For this reason, BPA is also commonly referred to as workflow automation.
Important note: BPA is not to be confused with business process management (BPM). BPM is an organizational discipline by which a company analyzes and evaluates its existing processes to:
- Identify opportunities for improvement
- Develop a strategy to implement those enhancements
- Execute upon that strategy
Depending on the financial institution, BPA can play an important role in implementing a BPM strategy; however, BPM has a different function than BPA and the terms should not be used interchangeably.
What is Robotic Process Automation?
These days, it’s almost impossible to talk about BPA without bringing up robotic process automation (RPA). RPA is a fast-growing, highly versatile subset of BPA that leverages advanced cloud-based technologies such as AI, machine learning, and natural language bots to automate business processes. The current generation of RPA software can handle highly complex processes, understand human language, recognize emotions, and adapt to real-time data.
Large financial institutions, as well as smaller financial services firms, commonly use RPA to automate many low-level processes such as processing invoices or sending emails. However, given the sophisticated nature of AI and machine learning, RPA can now also be used to automate higher-level cognitive tasks, such as handling customer service inquiries, loan processing, know your customer (KYC) reporting, and fraud detection.
RPA is also typically used to completely automate an entire business process end-to-end, requiring little or no human intervention to accomplish the business task. RPA has the ability to deliver dramatic improvements in speed and cost savings for complex recurring tasks such as monthly closings, reconciliations, and management reporting.
12 Reasons for Financial Institutions to Automate Business Processes
There are many compelling reasons for financial services firms to invest in BPA. Here are the top 12:
- Optimized Workflows — As noted earlier, organizations can use BPA to automate entire processes or even individual stages within a process. In either case, BPA has the ability to apply business rules and logic to structured and unstructured data sets to identify the most efficient way to run a workflow and execute it accordingly.
- Increased Productivity — Many organizations leverage BPA to automate highly repetitive, menial tasks, as these tasks are typically low-level in nature and consume employees’ valuable time. By freeing up employees to focus on higher-value tasks and removing bottlenecks from existing workflows, BPA boosts overall productivity and accelerates business growth.
- Lower Operating Costs — Given that it improves operational efficiency, enhances workplace productivity, and reduces the need for manual intervention, it’s easy to see how implementing BPA can lower costs. According to a report from Deloitte, robotic process automation, in particular, can help organizations decrease costs by 59%, while improving quality and accuracy by 90%.
- Effective Resource Allocation — By enhancing productivity and streamlining workflows, BPA enables organizations to utilize human and digital resources more efficiently. Additionally, by lowering operating costs, BPA frees up capital that organizations can then invest in other areas of the business, including growth initiatives.
- Streamlined Document Management — Businesses can use BPA to automatically capture important documents and data and create digital archives. These archives serve as a single source of truth, which allows for greater transparency. They also make it easier for individuals at all levels of the organization to access the information they need and share materials in real time, supporting cross-team collaboration and productivity.
- Reduced Paperwork — BPA is designed to centralize and streamline processes, allowing for greater transparency while eliminating the need for tedious paperwork.
- Engaged Employees — According to a survey of working adults in the U.S., employees spend an average of 520 hours per year — more than a full day’s work each week — on repetitive tasks that could easily be automated. This has damaging effects not only on workplace productivity, but also on employee satisfaction and team morale, as it can lead workers to feel disengaged from their jobs. Using BPA to automate menial tasks gives employees the opportunity to focus on more exciting creative or strategic work, which makes them more vested in business outcomes and the overall success of the organization.
- Lower Incidence of Human Error — Every employee is bound to make mistakes, despite their best intentions. Though certain mistakes are minor and fairly inconsequential, others can pose a serious threat to the entire business. BPA removes the human element from the equation, thereby eliminating the risk of human error so you can trust workflows are being executed accurately and consistently.
- Greater Consistency — Speaking of consistency, part of the appeal of BPA is it standardizes processes and eliminates potential variance. By establishing reliable, repeatable workflows, BPA delivers significant value in terms of quality assurance.
- Enhanced Compliance — BPA is invaluable for organizations that operate within heavily regulated industries, such as the financial services and healthcare sectors because it enables them to automate components of their compliance program. Automating workflows such as third-party onboarding and complaints analysis eliminates the risk of human error, which could jeopardize compliance, and empowers compliance officers to dedicate their time and attention to more pressing issues that impact the business.
- Expedited Auditing — Organizations can utilize BPA to automate various auditing tasks such as reconciliations, internal control testing, and detail testing, thereby enabling auditors to prioritize more complex tasks. Businesses can streamline the overall audit process by reducing demands on auditors’ time and even enhance audit quality.
- Higher Customer Satisfaction — For customers, increased efficiency gains on a business’ back end translate to a better overall experience, as organizations are able to dedicate more time to one-on-one interactions, accelerate turnaround times on requests, better ensure quality, and more.
How to Decide Which Financial Services Processes to Automate
Recognizing the potential value of BPA is easy; deciding which processes to actually automate is a bit more challenging. According to research from McKinsey, nearly half of all financial services activities can be automated. If a workflow falls into one or more of the following categories, it could be a good candidate for automation:
- It’s rule-based or repetitive
- It involves working with forms
- It has research steps or components
- It involves multiple people or requires multiple hand-offs
- It’s performed frequently or at a high business volume
- It’s time-sensitive or initiated on-demand
- It’s error-prone or requires validation steps
- It requires an audit trail
- It’s business-critical or delivers significant value
Examples of financial services business processes that lend themselves to BPA abound, especially those requiring smart workflows —Document Ingestion and Management, Invoice Processing, Purchase Order Processing, Talent Recruitment, Employee Onboarding, Expense Processing, Budget Approvals, Financial Reporting, Customer Service, and Customer Feedback Solicitation.
This list is just the tip of the iceberg! There are many relatively labor-intensive processes critical to most financial institutions that can be successfully automated with today’s tools.
A Real-world Use Case
For an example of BPA in action, look no further than this Hitachi Solutions customer in the mortgage lending business. At the end of every week, the company’s loan officers were required to go to a website without an API to download data about current mortgage rates. Officers would then have to manually enter that data into a Microsoft Excel spreadsheet and perform a mail merge for email marketing purposes. The entire process was manually intensive and typically took each officer an hour to complete — time that would’ve been better spent following up with prospective borrowers or networking with referral partners. By partnering with Hitachi Solutions and implementing BPA, the customer was able to completely automate the process, saving loan officers valuable time and making better use of the business’ resources.
Important note: Just because you can automate a business process doesn’t necessarily mean you should. There are certain workflows that require a human touch, such as those that involve high-level strategic decision-making or face-to-face interaction. That said, even if you can’t automate an entire process from start to finish, you may still be able to automate parts of it to return substantial business benefits. For example, firms with large customer bases frequently use a chatbot to assist with initial customer service requests and then escalate cases to a live agent as needed.
Regardless of the type of business process, BPA can deliver on its promise when skillfully applied, freeing up people to devote more time to servicing their customers.
Best Practices for Business Process Automation in Financial Services
Beyond selecting the right processes to automate, there are a few additional steps you can take to ensure the success of BPA in your organization:
- Set clear goals and expectations. This serves three key purposes: First, it establishes a business case for BPA and justifies your investment in BPA technology. Second, it acts as an endpoint from which you can work backward to build a strategic roadmap for your BPA initiative. Third, it enables you to gauge the performance and ROI of your BPA initiative — which takes us to our next best practice.
- Measure your results. When establishing a goal (or goals) for your BPA initiative, be sure to also define which metrics or key performance indicators (KPIs) you intend to use to monitor its progress. For example, if you are trying to reduce the cost or shorten the time for a business process, you should monitor the results of the automation to identify if the automation is giving you the expected value.
- Understand relevant compliance requirements. Even if you aren’t automating a process within your compliance program, it’s still important to be aware of potential regulatory obligations, compliance mandates, or other confidentiality or data sensitivity restrictions when designing a financial process automation strategy.
- Document everything. From what changes are being made to the existing workflow to how you intend to roll out those changes, make sure that every aspect of your BPA strategy is painstakingly documented in a way easily accessible to all interested parties. Having a single source of authoritative information will help prevent confusion and ensure that the new process is successfully adopted and consistently managed.
- Invest in employee training. Training materials should not only cover how the new process will run and what employees’ updated roles and responsibilities are — it should also establish a rationale for the change. Helping employees understand the “why” for BPA is an important part of change enablement, one that increases the likelihood of user adoption and the overall success of any BPA initiative.
- Start small and scale up. Gain familiarity with the BPA design and implementation process before taking on larger-scale automation initiatives. Better to identify three to five processes that would benefit from automation and conduct those as a pilot exercise, with ample opportunity for developing expertise with the new tools. If your first BPA initiative is a success, you can expand it to include additional processes; if not, you can use the pilot to identify lessons learned and refine your approach for a better end result on the next go-round.
- Look for an integration-friendly BPA solution. Since BPA is intended to streamline operations rather than disrupt them, the ideal solution should slot seamlessly into your existing software ecosystem and require minimal — if any — rearchitecting to connect with other programs.
- Partner with outside expertise. Although it’s certainly possible to implement BPA on your own, it’s far better to start with a partner who has a proven track record of successful BPA implementations. Such a partnership can help ensure your first efforts are done right, particularly in determining which of your existing workflows are the best places to start your automation work. A skilled partner will help you define goals, establish metrics, and proactively identify and avoid potential pitfalls.
Hitachi Solutions: Your BPA Implementation Partner
As a nationally managed Tier 1 partner with 49 Microsoft Partner of the Year Awards to our name, Hitachi Solutions is uniquely qualified to help your organization harness the power of BPA using the Microsoft Power Platform.
Our approach is simple:
- Combining our relevant industry expertise and BPA implementation experience with the RPA functionality of Microsoft’s Power Automate software, we analyze your existing workflows and identify your biggest opportunities for automation.
- Once we’ve identified three to five potential workflows to automate, we break them down into their constituent parts and start building an implementation roadmap for each based on the best approach for automation.
- We work closely with you to build automation processes within Microsoft Power Apps, leveraging the system’s simple user interface and visual front end to design integrated workflows, all within a single platform.
Over time, you’ll become more comfortable building and automating new processes on your own and can operate independently or with Hitachi Solutions’ support — the choice is entirely yours.
For professional guidance on how to leverage the Microsoft Power Platform and modernize your organization through automation, consider signing up for our immersive automation and RPA envisioning workshop. And for additional insights on how to better support your workforce, feel free to contact us directly.