Process Automation Software Basics: What Banks and Credit Unions Need to Know

Today’s banks and credit unions face a constantly evolving set of challenges. The cost of funds, interest rate environment, efficiency issues, and cybersecurity threats all rank among executives’ chief concerns—many of these problems hardly registered on financial institution (FI) leaders’ radars just three years ago.

Meanwhile, these evolving challenges translate to evolving pressures for bank and credit union IT teams. Finding the right people with the right skills to future-proof the business remains a daunting task as the tech talent shortage shows no signs of abating.

Fortunately, FIs don’t have to resign themselves to unrest and inefficiency—with process automation software, banks and credit unions can directly address their most pressing pain points, offload critical tasks from skilled staff, and insulate the business against future unknowns.

Targeting top goals with process automation software

The path to modernization is paved with obstacles. Legacy systems, resource constraints, and an ever-changing regulatory environment make it difficult to stay ahead of the curve—so difficult that just 30% of digital transformation initiatives are deemed successful. Process automation software offers solutions to some of the financial services industry’s most pressing issues, enabling targeted focus on goals like:

• Operational efficiency: One of the primary advantages of process automation is its ability to handle repetitive tasks quickly and accurately; this is a top cost-saving focus for FIs. Over 70% of banks and credit unions say they want to streamline workflows for greater efficiency in 2024, and the industry is ripe with opportunity—studies estimate FIs could automate over 40% of their tasks on average. With the right process automation solution, leaders can effectively target the efficiency gains that rank top on their list of priorities.

• Error reduction: Manual processes are prone to human error, which can be costly both in terms of time and money. Process automation software minimizes these errors by ensuring tasks are performed consistently, removing opportunities for typos or memory lapses. This is particularly important in compliance or payment-related activities where mistakes can lead to significant fines or reputational damage.

• Regulatory compliance: Banks and credit unions are subject to an ever-growing array of regulatory requirements. Process automation solutions can help FIs stay compliant by automatically carrying out workflows inclusive of the latest regulatory changes and generating audit trails that simplify reporting. Since reporting and compliance processes are typically time-consuming, leveraging automation in this area not only supports peace of mind but also frees skilled staff to focus on a more complex and ever-changing set of priorities.

• Scalability: As financial institutions grow, so do their operational demands. Manual processes can quickly become bottlenecks that hinder growth. Skilled staff—already navigating the management of a complex tech infrastructure—can’t effectively split their time between business-as-usual demands and growth-oriented initiatives. As Cornerstone Advisors puts it, “The (midsize) bank or credit union IT department has evolved from being a builder to a vendor management team and will evolve further in this decade to become an integration team.” Process automation software allows tech talent to focus on the changing demands they’re uniquely equipped to handle, ensuring that growing day-to-day workloads are carried out seamlessly.

Real-world examples: process automation use cases for banks and credit unions

To truly appreciate the impact of process automation software, it’s important to understand the specific processes within banks and credit unions that can be automated:

Mortgage processes

Some of the most resource-intensive tasks in financial institutions revolve around loan origination and processing. Process automation software can streamline the mortgage lifecycle, eliminating unnecessary manual touchpoints from many stages of these workflows.

For example, by leveraging an FICS API and automating monthly and daily mortgage processes (such as payment sweeps), Achieva Credit Union achieved 60x faster daily processing and 24x faster monthly processing.

File management with third-party vendors

In a transactional business like a bank or credit union, managing data efficiently and effectively is no small feat—particularly for modern FIs that utilize a wide range of third-party vendors and ancillary applications. With a process automation solution, institutions can automate file monitoring, transfers, and other management tasks to free up skilled resources.

Not only does automating these processes improve efficiency, but it can also boost member and customer experience. TRUE Community Credit Union built an automated process to send receipt images generated by tellers to their imaging vendor in a zipped folder every half hour; as a result, tellers no longer have to perform this process manually and can instead focus on providing superior service.

Audits and reporting

The financial industry is highly regulated, so FIs are responsible for keeping a detailed record of the processes that occur in their organizations. From audit trails to transaction reports and beyond, there’s a seemingly endless stream of reporting processes that must be carried out in every bank and credit union.

Process automation software removes a significant burden for teams tasked with reporting-related workflows. Keesler Federal Credit Union automated reporting processes for their audit department using self-service buttons; now, members of the audit team can generate reports in their core whenever needed, without involving IT.

User onboarding

With a tech talent shortage ongoing, it’s an undeniable waste of resources for skilled staff to manually create new users, set passwords, and update permissions during employee onboarding. Process automation software eliminates this burden—particularly with the right integrations.

For example, Oregon State Credit Union used a lightweight directory access protocol (LDAP) integration to connect Active Directory with OpCon, their workload automation and orchestration solution. With this connection established, OpCon can automatically look at organizational units and add information to the database with the proper permissions when an employee joins or leaves the organization.

Strategic benefits of process automation for financial institutions

The adoption of process automation software offers several strategic advantages that can help banks and credit unions navigate the complexities of the modern financial landscape:

1. Cost savings: By automating routine tasks, financial institutions can significantly reduce operational costs. With a comprehensive approach to process automation, organizations can cut costs by more than 30%; when leaders address process fragmentation and step away from the status quo to re-engineer workflows, savings grow even higher.
2. Improved customer experience: Automation enables faster processing times and more accurate service delivery, which can enhance customer satisfaction. For example, automating payment processing ensures accountholders reliably receive their deposits at a consistent time.
3. Risk management: Process automation software helps mitigate operational risks by reducing the likelihood of errors, ensuring consistency, and disaster-proofing operations. In an industry where even minor mistakes can have significant consequences, process automation solutions bring banks and credit unions as close to perfection as possible.
4. Employee empowerment: By taking over mundane tasks, process automation frees employees to focus on value-added activities. This can lead to higher job satisfaction and productivity as employees can engage in more meaningful work and take time off when needed.

Automate daily processes to focus on the future

By automating routine tasks, reducing errors, and better serving accountholders, banks and credit unions can position themselves to thrive in an increasingly competitive market with process automation software.

As adaptability becomes an increasingly important differentiator in the industry, leaders need the assurance that critical operations will be handled reliably so they can throw their energy into moving the business forward. By investing in process automation software, FIs gain peace of mind that their business-as-usual workflows are running as expected, freeing skilled staff to focus on what they do best—the work that can’t be automated.

As you search for ways to enhance efficiency and cut costs today, don’t overlook the long-term value of a comprehensive process automation solution. To learn more, contact the experts at SMA Technologies!