Starting your intelligent automation journey: A guide for credit unions

Intelligent Automation (IA) sits at the heart of efficiency and client experience improvement initiatives. It is the enabler for reducing operational expenses while delivering consistent (and improved) service. Today—more than ever before—thanks to improved capabilities, affordability and industry use cases it is easier to implement IA. However, embarking on an IA journey can be daunting. This article provides a roadmap for credit unions to successfully start their journey.

Definition clean up

Let’s get the definitions out the way, because even though people use Automation and Intelligent Automation synonymously, they are not the same thing. Automation mainly refers to and relies on Robotic Process Automation (RPA) capabilities. It focuses on repetitive and rules-based tasks like copying/pasting data from one source to another, opening & saving files to a specific location, conducting calculations, and so forth.

Intelligent Automation involves using Artificial Intelligence (AI) tools like Optical Character Recognition (OCR), Machine Learning (ML) or Natural Language Processing (NLP) to mimic human capabilities (yes this does imply that AI algorithm will need to use a form of “thinking’). Using AI capabilities, we can automate activities like scanning an application to extract specific data fields and transposing them into a system or utilizing chatbots to answer customer questions or leveraging vast member data to predict who may pay off a loan or be delayed in a payment. The world of Automation has evolved beyond simple RPA implementation and is now focused on materially improving banking processes, overcoming existing system gaps and workflow challenges.

Which tool(s) should I use?

Automation Anywhere and UiPath are now household names in the Automation industry, but the biggest disrupter is Microsoft Power Platform. If you are just getting started—implying that your appetite for initial investment in technology may not be too high and you want to minimize risk—then our recommendation would be to start with Microsoft’s suite of offerings. The additional benefit of using MS is that since most CUs have MS licenses, onboarding and buying additional ones will be quick and inexpensive.

What capabilities will I need?

Selecting the Automation tool alone will not be enough to get started: critical resources and skill sets will be needed to provide a better chance at success. Even if you are just starting your journey here are the required capabilities/skill sets:

1. Process engineer: This person will be tasked with assessing current business process performance. The main objectives are to identify points of poor experience or efficiency so that they can redesign the process to reflect its best possible version. The last thing we want is to automate a poorly performing process.
2. Solution architects: These are technical experts who understand the Process Engineer’s requirements and translate them to an automation solution (which capabilities will be needed at specific junctures in the process to gain efficiency).
3. Developers: They take the instructions provided by the solution architect to code, test & deploy the solution.

To accelerate your journey, also consider working with an automation partner who has experience in the financial services sector and understands the unique challenges faced by credit unions.

Optimal areas in a CU for IA

Success of IA endeavors is based on a few factors. To clarify, by success I mean a robust return on your investment. Before diving into IA, it’s essential to identify the areas within your CU that would benefit from IA. Consider processes that are:

1. High volume: There is sufficient transaction volume in the process to realize benefits.
2. Standard workflow: The process follows a series of rules-based steps without a lot of exceptions or complicating scenarios.
3. High error rate: Prone to human error given the number of tasks that must be completed

A sample list of ideal CU processes for IA are listed below (ranked from easy to more complex):

1. Product changes
2. Mortgage refinance application
3. Wire transfers
4. Commercial lending application/approval/funding

By no means can the entire process be automated in such a way that people will not be needed, but here are examples of how IA can be leveraged:

Wire transfers

“Smart Forms” can be designed so that a member or branch staff can populate critical wire transfer instructions. The “Smart” refers to the capability of the form being able to:

1. Detect if critical data has been provided
2. Validate that sufficient funds are available and that they are in good standing
3. Ensure that the appropriate account has been selected and
4. Critical risk questions have been asked

The client can then use an e-signature to approve the instructions and all the captured data can now “flow” to downstream systems and teams for final review and approval.

Refinance or commercial lending

In both cases, IA capabilities can help develop automated workflows—consider all the different teams that are involved in these processes: Loan Officer, Processors, UW, Closers—all touching the process, trying to keep track of who has done what and when. Without having to replace your core or surround systems, an automated workflow can be built to allow documentation and data to digitally flow from one team member to another. This can be accomplished while tracking the status of the application & the outstanding items. OCR capabilities can be leveraged to read incoming member documents so that critical data can be extracted from them for UW (no more manual data collection & entry). The possibilities for automation are endless.

Set clear objectives and metrics

Establishing clear objectives is crucial for guiding your IA strategy. These objectives should align with your CU’s overall business goals, such as improving member satisfaction, reducing operational costs, or enhancing compliance. Additionally, you must define the key performance indicators (KPIs) you will use to measure the success of your automation initiatives. Common KPIs might include processing time reduction, error rate reduction, cost savings, and member satisfaction scores.

Start small and scale gradually

IA is not an all-or-nothing proposition. Starting with small, manageable projects allows your CU to test the waters, learn from the experience, and refine the approach. For instance, you might begin by automating a single process, such as member onboarding or loan application processing. As your team becomes more comfortable with the technology and processes, you can gradually expand your IA initiatives to other areas of the organization.

Engage and train your team

The success of your IA initiatives depends not only on the technology but also on your people. Engage your employees early in the process to gain their buy-in and address any concerns they may have about automation. Provide training to help them understand how IA will impact their roles and how they can work alongside automated systems. This will not only help ease the transition but also empower your staff to contribute to the success of the automation projects.

Monitor, evaluate, and iterate

Once your IA projects are up and running, continuous monitoring and evaluation are essential. Use the KPIs you established earlier to assess the performance of your automation initiatives. Regularly review the outcomes and gather feedback from your team to identify areas for improvement. Be prepared to iterate on your approach, adjusting as needed to optimize results.

Conclusion

Starting an IA journey can be transformative for CUs, offering the potential to enhance efficiency, improve member experience, and reduce costs. By understanding the basics of IA, identifying key areas for automation, setting clear objectives, and choosing an appropriate technology, your CU can begin to successfully navigate the path to IA. Embrace the future of financial services and position your CU for long-term success in an increasingly digital world.

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