The Opportunity for Improving Digital Structure of Banks


Currently, bank customers can easily manage their accounts online.  It is also possible to apply for a loan online in just a few minutes.  Everything fast and digital?  By no means.  Behind the scenes, there is a lot of noise in the digital structure because many processes are still only partially digitized.  This greatly delays banks on a day-to-day basis, making them slow and inflexible with sometimes disastrous cost structures.

Outdated IT makes it incredibly difficult for banks to meet rising customer expectations or meet new legal and regulatory requirements.  Ultimately, they risk falling further behind FinTechs and platform operators, who lure customers away from them with enticing and new services.

In the corporate customer business in particular, the need for digitization is immense.  Banks urgently need more efficient processes.  In addition, enterprise customers’ businesses function very differently today than they did before the COVID-19 pandemic.  While the focus used to be on face-to-face discussions with clients, in which consultants and clients routinely filled out paper forms, today corporate clients work remotely with their banks.  

While banks have advanced with their digitization lately, many things have remained fragmented and only serves to resolve individual issues without promoting widescale improvement.  A proposed solution:  new online portals that enable customers to submit their applications and forms digitally.

However, the processes behind this have remained the old and inefficient and create significant work.  If automation solutions were introduced, for example, to process the increase in the number of loan cancellations and installment suspensions during the COVID-19 pandemic, they are independent, and  the opportunity to digitize end-to-end processes has been lost.

End-to-end digital processes that don't stop at departmental or company boundaries are what banks need today.  If they don't see checks as a stand-alone task to prevent money laundering, the department can pass on valuable information about company mergers or new co-owners to risk management and sales.

But, how do individual areas of the bank merge digitally, when IT and development resources are scarce and consumed by the complex maintenance of legacy systems?

Management tools provide an output that not only combines all documents and data from individual processes, digitally maps and automates workflows, but also engages departmental staff in scanning through low-code capabilities.  Specialists can digitize their processes completely independently and adapt workflows or business rules without IT department support if requirements change.  This way, digital innovation can be implemented quickly and efficiently and in a way that is much better aligned with the technical requirements and day-to-day issues of the business, than if IT had to take on most of the digitization tasks on its own.

With the case tool and low-code, banks are starting to digitize and more momentum is needed as competitive and regulatory pressures are likely to increase in the coming months.  All of this will lead to more competition in the financial sector, as well as increasingly strict controls, and will further increase the need for digital solutions and processes.

Edited by Erik Linask
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