Understanding Process Automation & System Integration

Process automation and system integration are powerful tools for businesses, particularly in the financial services industry, to enhance operational efficiency and improve overall performance.?

This article is an AI-generated summary of the first of many conversations between Afe Araromi and 'dipo Majekodunmi , consultants at dipoleDIAMOND. They provide insights into various aspects of process automation and system integration, including their definitions, benefits, ideal processes for automation, and common mistakes to avoid.?

They also highlight the importance of process documentation, data quality, and employee involvement in successful automation initiatives. They answered and discussed 10 questions and their answers are summarized below.?

Interested in the full transcript, read it here. Alternatively, listen to the AI-generated deep dive.

1. What is process automation, and how can it benefit my business?

Process automation leverages technology to increase operational efficiency by resolving business problems. This technology can encompass Robotic Process Automation (RPA), Business Process Automation (BPA), and low-code application platforms, which are all combined into Business Orchestration and Automation Technology (BOAT).

Benefits of process automation:

• Increased Operational Efficiency: Automation can speed up processes and reduce turnaround time for tasks, freeing up employee time and leading to greater productivity.
• Cost Savings: By reducing manual labour, businesses can decrease labour costs and the likelihood of human error.
• Employee Satisfaction: Automation allows employees to shift their focus from monotonous, repetitive tasks to more value-added work, increasing employee satisfaction and the potential for higher customer satisfaction.
• Customer Satisfaction: Increased operational efficiency and a focus on higher-value tasks can lead to improved customer satisfaction.
• Compliance: Automation ensures adherence to regulatory requirements and reduces compliance-related errors.
• Data Integrity: By standardizing data handling processes, automation leads to improved data quality for better decision-making, especially when incorporating AI.

2. How do system integrations differ from process automation?

While both aim to improve efficiency, process automation focuses on automating tasks and workflows within systems, while system integration focuses on connecting separate systems so they can communicate and share data.

• Process Automation: Automates specific tasks or workflows within a business process, potentially replacing manual tasks within digital systems with automation.
• System Integration: Connects different systems, allowing them to work together and share data seamlessly. This can involve using APIs or, in cases where APIs are not available, RPA can be used as a form of integration.

Sometimes, process automation can encompass integration when using RPA to bridge gaps where API access is limited. Integration can enable end-to-end process automation, ensuring a smooth flow from start to finish.

3. What business processes in financial services are ideal for automation?

Nearly all processes within the financial services industry can be automated, as evidenced by institutions like Access Bank, which has automated close to 300 processes. Key opportunities exist across the customer journey and internal operations.

Examples:

• Customer Onboarding: Processes such as account opening, account maintenance, KYC compliance, and document verification.
• Loan Processing: Automating credit checks, loan origination workflows, document management, and disbursement processes.
• Compliance and Regulatory Reporting: Automating report generation, risk assessments, data collection, and submission processes.
• Fraud Detection: Automating transaction monitoring, suspicious activity flagging, and security checks.
• Transaction Processing: Automating settlements, reconciliations, payment processing, and transaction validation.
• Customer Service: Automating routine inquiries, support ticket management, and information retrieval for customer service agents.

By automating these processes, financial institutions can reduce their cost-to-income ratio and significantly improve operational efficiency.

4. How do I determine which processes should be automated first?

It is strategically beneficial to create a process inventory, listing all processes within different departments. Processes can then be categorized into two buckets: "to automate" and "not to automate" based on several factors.

Prioritization criteria:

• Identify Bottlenecks: Processes causing the most frustration, delays, or errors are ideal candidates for automation.
• Consider ROI: Target high-volume, repetitive, and time-consuming processes that, once automated, free up resources and provide quick wins.
• Easy Automation Potential: Prioritize processes that can be easily automated to demonstrate value and build momentum.
• Compliance Requirements: Address any regulatory or compliance issues with automation to reduce risk.
• Impact on Customer Experience: Processes that impact customer experience are crucial for automation, leading to increased satisfaction and loyalty.

Once processes are identified for automation, they can be further categorized into:

• Quick Wins: Low complexity, high business value processes ideal for immediate automation to showcase value.
• Low-Hanging Fruits: Low complexity, low business value, but numerous and easy to automate, often providing relief to staff.
• Strategic Automation: High business value, high complexity, requiring more effort but crucial for long-term goals.
• Time Wasters: High complexity, and low business value, should be avoided initially.

A crucial element for successful automation is good documentation and clearly defined Standard Operating Procedures (SOPs), which are often lacking in organizations.

5. What are the common mistakes businesses make when automating processes?

The common mistakes businesses make when automating processes:

• Lack of Proper Documentation: Automating without well-defined SOPs leads to issues during implementation and maintenance.
• Trying to Automate Everything: Not all processes are suitable, and attempting to automate everything leads to wasted resources and potential failures.
• Ignoring the Human Factor: Failing to involve employees in the automation journey leads to resistance and lack of buy-in, hindering success.
• Forgetting About Data Quality: Automation relies on good data; poor data quality undermines automation efforts.
• Underestimating Complexity: Complex processes require significant effort and resources; underestimation leads to shortcuts and technical debt.
• Not Measuring Results: Without defining and tracking metrics, it is impossible to determine the effectiveness of automation.
• Not Defining Automation Governance: Lack of clear guidelines and standards for development, documentation, and version control leads to inconsistencies and maintenance challenges.
• Leading with the Most Complex Process: Starting with the most complex process overwhelms users and increases the likelihood of failure.
• Pressure from Management for Quick Automation: This leads to cutting corners, impacting quality and creating technical debt.

6. What is the best way to assess my company’s automation needs?

Assessing automation needs involves understanding the current state of processes and identifying areas where automation can provide value.

Key steps for assessing needs:

• Process Inventory: List all processes across departments to gain a comprehensive view.
• Process Audit: Analyze each process to determine its suitability for automation, considering factors like time taken, resources involved, bottlenecks, and the potential cost of errors.
• Identify Automation Potential: Based on the audit, categorize processes into suitable automation types like BPA, RPA, or low-code.

To surface information about automation needs, businesses can:

• Listen to Customers: Identify customer requests and pain points that current processes struggle to support.
• Monitor Regulators: Stay updated on regulatory changes and requirements that may necessitate automation.
• Analyze Competitors: Observe how competitors leverage automation to improve efficiency and gain insights.
• Engage Employees: Create channels for employee feedback and suggestions to identify areas for automation.
• Seek External Expertise: Consultants offer objective perspectives and experience working with other organizations, helping identify automation opportunities and avoid common mistakes.

7. How can system integration improve my overall business efficiency?

System integration can significantly improve business efficiency by connecting disparate systems and enabling seamless data flow.

Benefits of system integration:

• Reduced Context Switching: Employees can access necessary information and complete tasks without switching between multiple systems, minimizing cognitive overload and errors.
• Faster User Onboarding: New employees don't need to learn multiple systems, leading to quicker onboarding and reduced training costs.
• Lower Licensing Costs: Integration can reduce the need for multiple user licenses across systems, leading to cost savings.
• Elimination of Data Silos: Data is centralized, providing a single source of truth and facilitating better decision-making.
• Streamlined Workflows: Processes flow seamlessly across integrated systems, reducing bottlenecks and speeding up operations.
• End-to-end Automation: Integration enables automation of entire processes without manual intervention, maximizing efficiency.

System integration allows specialized teams to use best-in-class applications while eliminating the need for other teams to learn and access those platforms, increasing overall efficiency.

8. How does process automation reduce errors in business operations?

Process automation reduces errors by minimizing human involvement in routine and repetitive tasks, mitigating the risks associated with manual processes.

Error reduction mechanisms:

• Eliminates Manual Data Entry: Automation eliminates errors caused by typos and transcription mistakes.
• Ensures Consistency: Automation performs tasks consistently, following predefined rules, and reducing errors caused by inconsistencies in manual execution.
• Real-Time Validation: Automated systems can instantly validate data and enforce rules, preventing errors from proceeding.
• Enforces Compliance: Automation helps organizations adhere to regulations and policies, reducing compliance-related errors.
• Enhances Data Integrity: Consistent data handling through automation improves data quality, reducing errors in decision-making based on historical data.

9. What types of financial services processes can be integrated with external systems?

Virtually any financial services process can be integrated with external systems, especially those with APIs.

Examples:

• Compliance and Regulatory Reporting: Integration with regulatory databases and compliance tools ensures up-to-date compliance and reduces risks.
• Fraud Detection and Security Monitoring: Integrating with security platforms and fraud detection services allows for real-time security measures and fraud prevention.
• Payment Processing: Integration with payment gateways facilitates real-time transactions and efficient cash flow management.
• Credit Checks and Loan Processing: Integrating with credit bureaus and underwriting systems streamlines credit assessments, improves decision making, and enhances customer experience.
• CRM and Accounting/ERP Systems: Integrating these systems centralizes customer data, improves customer engagement, and streamlines invoicing and financial reporting.
• Insurance Claims Processing: Integration with external assessors enables automated claim assessment, speeding up processing.
• Document Management and E-signatures: Integration facilitates paperless transactions, speeds up approvals, and enhances document security.
• Customer Support and Communication: Integrating with chatbots, email, SMS, and other communication platforms enhances customer service and automates routine inquiries.
• Investment Portfolio Management: Integrating with portfolio analysis tools and custodian services provides real-time portfolio views, performance tracking, and compliance reporting.

For systems lacking APIs, RPA can be used to bridge the integration gap, enabling automation without disrupting workflows.

10. What is the difference between RPA (Robotic Process Automation) and process automation?

RPA is a subset of process automation, specifically focused on automating tasks performed on digital systems by mimicking human actions.

Key Differences:

• Scope: Process automation encompasses a broader range of technologies, including BPA, BPM, and intelligent document processing, while RPA is a specific technology within this umbrella.
• Focus: BPA is process-oriented, focusing on digitizing entire business processes, while RPA is task-oriented, focusing on automating specific, repetitive tasks within digital systems.

RPA Characteristics:

• Agentic: Software robots or agents trained to perform specific tasks, mimicking human interactions with digital systems.
• Clearly Defined Steps: RPA requires clearly defined, repeatable steps and logic for successful execution.

While RPA is limited to tasks within digital systems, BPA can automate both manual and digital processes, making it a broader solution for process automation.