Cognitive Automation & The Disruptive wave in Fintech sector

Do you know the significance of the date May 11, 1997?

Most people may not remember it, but this was the day when DeepBlue, IBM’s supercomputer, defeated the then reigning world chess champion, Garry Kasparov. Of the 6 games played, 2 were won by DeepBlue, 1 by Kasparov and 3 were drawn.

This was probably the first instance when a machine defeated a human when it came to applying strategy. Since then, the world has never been the same again!?

Today, Artificial Intelligence (AI) and Machine Learning (ML) have come a long way and found applications in a variety of industries, including the finance sector. In fact, the modern Fintech startups have been using these technologies quite aggressively in their operations.

As machines become smarter and more agile, the need for better and faster decision-making has also gone up. To achieve this, more than ever before, the requirement for Cognitive Automation in machines, is being recognized.

What is Cognitive Automation (CA)?

IBM defines CA, (also called Intelligent Automation) as the use of automation technologies like Artificial Intelligence (AI), Business Process Management (BPM), and Robotic Process Automation (RPA), to streamline and scale decision-making across organizations.

What are the constituents of CA?

CA typically consists of three technologies working in close collaboration with each other. These technologies are:

1. AI – This is where the data, structured or unstructured, is analysed, processed and strategic decisions are arrived at. It also creates a knowledge base and formulates prediction making, thus simplifying decision making.
2. BPM – This technology focuses on automating the various business processes & workflows by improving agility and consistency at every step. The focus of this technology is to improve the quality of interaction and engagement at every step.
3. RPA – Typically focused on automating repetitive but high volume jobs, RPA works in close collaboration with AI to speed up the backend jobs.

When these three technologies are used together, it leads to Cognitive Automation which streamlines business processes, makes workflows simpler, and ultimately leads to greater customer satisfaction.

How does CA benefit any organisation?

With its ability to process & analyse large quantities of data, carry complex calculations with precision and arrive at strategic business decisions, that too on a real-time basis, CA provides many benefits. Some of the key benefits are:

●?????Improving productivity, lowering costs – CA is able to process and analyse data in a much better way thus accelerating production. Also, scaling up or down without disturbing the existing workforce becomes easier with CA, thus helping to save on costs.

●?????Improving accuracy – Unlike humans, CA is good at conducting repetitive tasks for an extended period of time and that too without any errors. This creates a consistent and accurate approach towards a large number of repetitive tasks.

●?????Enhancing customer experience – With improved processing speeds and accuracy, customers can expect faster solutions and richer experiences while interacting with an organisation which has a positive impact on customer retention.

●?????Better statutory compliance – Many sectors, especially the financial services, have to comply with product specific statutory policies. CA is far better than its human counterparts in maintaining consistency and accuracy towards such compliances irrespective of the volume of transactions involved.

How is CA disrupting the Fintech sector?

The Fintech sector is one of the leading proponents of CA across the world. With better connectivity, customers have now started using their smartphones to conduct all their financial transactions in large numbers.

Following are the ways in which CA is disrupting Fintech:

●?????Automating the process – With technologies like RPA, Fintech companies can complete their back-end jobs much faster than before and also with greater accuracy. This helps in providing an almost instant solution to the customer.

●?????Customising a solution - With AI and ML working in the background, machines can now understand the unique requirements of specific customers better thus helping in the creation of a customised solution.?

●?????Anytime, anywhere access to all – Increasing use of Smartphones is causing a proliferation of mobile apps. Customers can now access their accounts or even transact without the restriction of time or geographies.

●?????Greater trust – Promising technologies like Blockchain are making processes secure and fool-proof. Fintechs are using these Blockchain technologies not only to make their processes safer but also to secure their customer's data.

●?????Better analytics – Today, technology is making data visualization, data mining and predictive analysis very easy. Fintechs are able to collate humongous amounts of data and analyse it to arrive at accurate decisions thus driving customer engagement higher.

Technology has come a long way from the time it defeated a human brain in the game of chess. Today, besides becoming the backbone, technology is providing a competitive advantage to businesses.

What began as a means of improving efficiency in the backend processes is now becoming a ‘must-have’ for customer-facing activities too! Cognitive Automation has surely started disrupting every industry in our economy and Fintech is no exception!