The brick-and-mortar banking model faced an existential threat with the emergence of Fintech (financial technology), or new technology that aims to enhance and automate the delivery and use of financial services. And later, new-gen technology companies started to deliver these services on secure digital platforms at a lower cost, resulting in traditional banks adopting advanced technology too.

Most banks were apprehensive about adopting automation to the finance function. This concern is frequently centered on whether it is possible to replace existing systems entirely with automation. The core banking system is perhaps the best example. Automating ‘untouchable’ core functions is not necessary. Instead, it can deal with the issues that surround them. But rooting your digital transformation in all other banking processes in intelligent, digital workflows is feasible.

What is digital banking?

Digital banking involves digitising all traditional banking products, procedures, and activities to serve customers through online channels. Examples include obtaining bank statements, cash withdrawals, funds’ transfers, accounts management and checking opening deposit accounts, loan management, bill payment, cheque management, and transaction records monitoring.

With digital banking, all banking services are accessible round-the-clock on mobile phones, PCs, and other intelligent devices. Thanks to digital banking software, all traditional services are now easier to obtain, comprehend, and manage.

Leading banks in the UAE make significant financial investments in the digital transformation of their banking operations and launch digital-only banks in the country.

Pros of digital banking

Here are some of the most known benefits of digital banking:

1. Scalability

Numerous functions provided by digital banks are just absent from traditional banks. This includes investing directly in stock markets and acquiring cryptocurrency and gold using the banking app. The user of digital banking can modify their security preferences, transaction caps, and even whether they wish to enable NFC or magnetic stripe transactions.

2. Personalisation

In digital banking, sophisticated personalisation tactics are powered by artificial intelligence (AI) and machine learning (ML). Customers can get timely financial solutions, interactive tools, and instructional resources from banks. Automatic budgeting, expenditure analytics, and savings reminders are a few technologies that can inform and engage customers.

3. Cost savings

Traditional banks spend a lot of time and expense on the checking and accounting processes. The elimination of unnecessary operations is what makes digital banking software’s operational costs less expensive. With digital banking systems, banks may take on less labour by automating the procedures related to routine transactions. Because fewer persons and stages are required for transactions when technology is used, there is a lower chance of financial mistakes, and money transfers are more straightforward.

The touch of automation

Let’s also look at the most automated processes in the banking industry that have undergone complete digitization with the touch of automation.

1. Loan processing

RPA or Robotic Process Automation can reduce lengthy procedures that typically take months to as little as 10–15 minutes. Automation enables essential data extracted from customer-submitted documents to validate all details. Systems employ Machine Learning to make better-informed judgments based on data analytics supported by more straightforward statistical methods. Intermediary bots infer business logic and ask the user to correct any inaccurate entries to ensure safer loan judgments and automatic confirmation letter creation

2. Know Your Customer (KYC)

Not only is Know Your Customer (KYC) a necessary compliance procedure for any bank, but it is also the trickiest. To execute the customer checks, this process requires at least 150 and maybe thousands of FTEs.

According to Thomson Reuters, a small number of banks annually invest at least $500 million in KYC compliance. Banks have recently begun utilising RPA to gather and flawlessly check consumer information to cut costs and resources. Because of this, banks can now complete the KYC procedure with fewer resources and mistakes.

3. Anti-Money Laundering (AML)

One of the most data-intensive processes, AML, can be made simpler with some help from Robotic Process Automation (RPA). Implementing RPA has proven more efficient than labour-intensive traditional banking solutions in identifying suspicious banking transactions or automating repetitive operations.

4. Fraud Detection

Banks are concerned about enhancing their fraud detection system due to the rising banking fraud scenario. Banking fraud has increased since the introduction of cutting-edge technologies. Considering this, it is virtually hard for banks to manually review each transaction to spot fraud trends in real-time. RPA cleverly uses the “if-then” principle to spot any potential fraud and report it for prompt resolution with the relevant department.

5. Mortgage processing

Both banks and their clients find mortgage processing extremely labour-intensive and cumbersome. Before processing each loan request, banks manage their mortgage procedure for more than a month, going through several unnerving stages like job verification, credit checks, and inspection. The processing of mortgage loans could be severely delayed by even the slightest mistake made by either the customer or the bank.

But RPA has accelerated this process for banks. Robotics goes through a defined set of rules to eliminate potential bottlenecks and speed up mortgage processing.

Customer acceptance of digital banking services has rapidly increased throughout the UAE. According to bankers, the older generation, initially apprehensive, is now quickly adjusting, whereas younger clients are quick to accept digital offerings and digital-only platforms. Digital banks are drawing a lot of new consumers due to lower account maintenance expenses and improved deposit returns.

How Beinex can help you

Beinex is a Dubai-based digital transformation organisation anchored in innovation, creativity, and unrivalled customer service. Our extensive analytics modernisation and training services will empower you to construct an intelligent and dynamic banking enterprise. Our extensively experienced consultants enable a seamless digital experience for the banking industry.