Change Management and Organizations
Every Christmas, Apple plays to the gallery where all Americans and the rest of the Apple fans across the world wait eagerly for the new promised product of the future and expectantly Apple has unveiled the new, slimmer and improved I Phone 5G. It is no secret that Apple is a cult world over. With […]
The Globalization of Supply Chains and its Implications for Trade and Commerce
Globalization of Supply Chains and its Implications We have discussed how the globalization of the world economy has made the globe more integrated and interconnected. While this has both positive and negative effects on the way global trade and commerce takes place, there is one critical aspect that needs our attention. That is to do […]
The Economics of Code Sharing Agreements
The airline industry is one of the most competitive industry in the entire world. A large number of incumbents in this industry are making losses. This is primarily because of their lack of efficiency. Since success in the airline industry is solely based on efficiency, many companies have explored unconventional options in order to increase […]
Finished Goods Inventory Classifications and Terminologies
While inventory classification of raw materials for Inventory Management purposes follows ABC Classification, Finished Goods inventory is classified under additional categories based on various attributes including sales volumes/patterns, functional attributes and operational requirements. Stock Category depending upon Sales Channels Finished Goods at the very basic level is manufactured and stocked separately depending upon the Business […]
The Future of Mobility and Opportunities for Investors, Entrepreneurs, and Businesses
The Future of Mobility Mobility or the ability of people to move from place to another has been an integral and vital part of our existence. No matter how much we work from home or live in self sufficient gated communities, we still need to travel once in a while. And for those for whom […]
We live in a digital age and hence, no institution of the global economy can be immune from automation and the advent of digital means of operations. Banks and financial institutions were among the first adopters of automation considering the humungous benefits that they get from embracing IT (Information Technology).
The reason why banks and financial institutions rapidly embraced IT is that their operations when done manually take up a lot of time and effort from their staff as well making them do routine activities over and over again leading to loss of productivity and missing the chance to move up the value chain.
On the other hand, automation reduces the redundancies in their operations and frees up staff that can be deployed for activities that are more productive. This is the reason why banks and financial institutions are among the largest users of IT.
Further, many IT vendors have dedicated verticals to what are known as BFSI or Banking, Financial Services, and Insurance sectors for the large budgets that they have to implement IT solutions.
This is why many IT companies target the BFSI sector more than any other sector as they have the potential for high value deals running into the billions of dollars as compared to the other sectors that are less rich.
Moreover, banks can reduce the incidence of customers visiting the branch for even mundane things like withdrawing money and updating their statements as automation means that ATMs (Automated Teller Machines) and online statements make physical visits to the branch unnecessary.
Indeed, many leading multinational banks actually charge for the physical visits as they encourage customers to bank online. of course, many of the old timers rue the loss of face-to-face contact and the doing away of personal relationships. However, such is the nature of the modern technology driven society that such considerations are usually secondary to the need to be efficient and efficacious.
Given the need for profits and any means of reducing costs that are necessary in this uber-competitive business landscape, banks and financial institutions have found that automation greatly improves their bottom line and leads to synergies between their processes.
Further, banks and financial institutions that have embraced automation have also found that they can concentrate of corporate banking and high Networth individuals for private banking by automating the routine processes in retail and commercial banking.
The third aspect why banks and financial institutions automate is that their core banking operations can be done in an improved manner when compared to the manual processing that takes up time, effort, and resources as well as leads to glitches and errors.
The last point is very crucial as manual processing is person driven and considering that, humans have a tendency to err. Automation removes the human element and makes the processes error free and less prone to glitches.
Moreover, the chances of fraud are minimized because of automation, which is a major benefit for banks and financial institutions that deal with large amounts of money and that too belonging to the customers whose hard earned assets they are managing.
In addition, banks and financial institutions have realized that they can report regulatory and legal requirements to the regulators in a better way through automation as well as the fact that storing historical data and storing customer details for extended periods is made easier because of automation.
Finally, banks and financial institutions have also automated their operations because of the convenience aspect to their customers who in this 24/7 breathless world might not have the time to physically visit the branch to transact.
After all, if you can remember the last time you visited a bank instead of online banking, chances are that it would have been in the past where you either needed to verify your documents or had to visit your personal banker.
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Business Continuity Management Planning around the World
February 12, 2025
