Using Technology to Break Down the Operation Silos in Banking

Too often digital banking products look great on the surface, but are saddled with inefficient processes behind the scenes, raising costs and reducing competitiveness. Data and operational silos are often the culprit, exacerbated by shortages of tech talent. Here's how workload automation can address both situations.
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The image of a silo is a powerful symbol, and one that evokes a range of emotions.

Across rural America, these vertical storage units are a familiar sight. Windowless, and with few access points, grain silos are designed for tight control and serve a crucial role in protecting feed and grain from wind, rain, spoilage, and other threats.

In corporate America, however, silos have a very different meaning.

Financial institutions, in particular, have many types of silos — by accident or design. Siloed departments and functions. Siloed data. Siloed products and business lines. And siloed operations. Although these silos may have served a valid purpose at one time — as a way to protect a firm’s data and intellectual property from outside forces — eventually and inevitably they impact the organization’s internal culture and its ability to innovate, grow and scale.

What's Hindering Banks:

Once useful for control purposes, data and product silos now greatly hamper financial institutions' ability to compete with fintechs for customer loyalty.

Fortunately, workload automation and orchestration can help break down these silos and unleash an organization’s ability to compete and serve its members or customers more effectively.

Looming Storm: Fintech Competition + Talent Shortage

In the post-pandemic period, banks and credit unions face several headwinds as they strive to grow market share and compete with newer entrants to the market. For one, consumer expectations are rapidly pivoting toward the digital channel.

Unfortunately, incumbent financial institutions are trailing their fintech counterparts in innovation, a fact that is driving an unprecedented investment in digital technology across the banking sector. Forrester predicts that financial institutions will increase their tech spending by double-digits in 2022, with the U.S. and China leading the way.

Of course, this also means that for legacy institutions that built their business on a foundation of personalized service and one-on-one interactions, every new digital offering has a manual process behind it. No matter how slick the digital interface looks, it is typically saddled with time- and resource-intensive processes that increase the risk of human error.

And if that wasn’t enough, just as financial consumers are demanding more of their banks and credit unions, employers are facing an acute shortage of labor. An average of 3.95 million U.S. workers quit their job each month in 2021, the highest full year monthly average since the Bureau of Labor Statistics started tracking the statistic in 2000, topping the previous high of 3.5 million from 2019.

This crisis for employers is showing no end in sight, with a record 4.5 million workers — 3% of the total workforce — quitting their jobs in November 2021. Employers are particularly struggling to recruit staff with highly-valued tech skills. According to a 2021 workforce trends survey from CompTIA, 40% of companies hired IT staff during the pandemic, and 66% planned to bolster their staff in 2021.

The tech talent gap is nothing new, but it is growing. In 2011, more than half of CEOs were concerned with the lack of skilled digital talent available on the market. By 2019, that figure grew to over three-quarters of those surveyed. And as the pandemic has forced businesses to pivot to remote work and digital service delivery, the need to fill this gap grows ever-more urgent.

For bank IT departments, this shortage of talent translates to less expertise available in-house to automate back-end processes, meaning that processes continue to be run manually, the way they have always been done.

So, how does having siloed operations exacerbate these existing challenges?

For one, siloed systems don’t speak to each other, severely limiting financial institutions’ ability to extract data across the enterprise. If you can’t access the data, you can’t analyze it and use it to understand changes in customer and member behavior, to develop long term strategy and new products, and to provide accurate reporting for regulatory compliance and other critical functions.

How Workload Automation Reduces the Impact of Silos

A workload automation and orchestration solution provides financial institutions with several key benefits. When industry veterans hear the term “automation,” they may think of the job schedulers of old, which were severely limited in their utility. But modern workload automation solutions can meet a wide variety of needs covering virtually every area of the institution, from streamlining business continuity to managing script lifecycles.

And those solutions that offer full orchestration can help banks and credit unions normalize and transfer data across systems and solutions, even those hosted by third party providers. They serve as a bridge across multiple technology systems and hybrid environments.

Workload automation and orchestration also reduces the need to maintain varied, highly developed skillsets in-house — skillsets that are particularly hard to recruit and retain in today’s ultra-tight labor market.

Workload automation and orchestration can be deployed in financial services to meet a variety of needs, including:

  • Integrate digital infrastructure: With enterprise-level orchestration, manage siloed technologies from legacy systems to the cloud, including virtualization and the Internet of Things (IoT) on a single, integrated platform.
  • Enhance security and compliance: Automation enables IT to effectively and efficiently manage security privileges across the enterprise and create an audit trail by logging all actions to meet compliance requirements and needs.
  • Streamline ETL processes: Workload automation allows you to automate extract/transform/load (ETL) processes in a repeatable way for data warehouse, artificial intelligence and other applications.

Key Features of Workload Automation

When it comes time to begin your workload automation journey, do your homework before heading into the market.

First, look for a provider that offers your financial institution operational control over the most complex environments, and can scale as you grow over time.

Second, look for key features and capabilities, like the ability to run rules-based tasks rather than on defined schedules, reducing errors and saving time maintaining calendars. A solution should also offer low-code and self-service options, to minimize the level of expertise you’ll need on staff.

Third, look for a provider that knows banks and credit unions. They will speak your language, have experience with integrating across various financial core systems, and understand the unique needs of financial institutions.

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