COVID-19: the catalyst of digital transformation
Opinion piece by Viktor Weininger, COO
Digital revolution did not start with COVID-19, however, it is clear that the pandemic has fundamentally changed how we approach the digital world. It has forced large companies and banks to take steps that had not been in the plans or that had originally been scheduled for later. These are sudden decisions, which put other strategic steps on the back burner. Those of us, who are experiencing this situation at first hand will always take this possibility into account from now on.
Paradigm shift
From one day to the other, we had to accelerate digital transformation and introduce automation solutions that had been scheduled for months or years later (or, perhaps, were not scheduled at all). There is going to be a paradigm shift, in which a global quarantine is considered a realistic scenario. Corporations and banks that are capable of adjusting to the new norm in a smart manner will be able to survive and evolve. What’s more, they can expect significant extra profit from changing their processes.
You have the tools, use them
The importance of digital transformation doesn’t have to be spelled out anymore. It has also become crystal clear for almost everyone that certain tasks should be outsourced to specialised professionals and systems should me moved into the cloud. Focus on the core activity, because it is what you do best. Those, who have already begun the shift to the cloud, introduced optimised resource management, started auto scaling, and have a fully-fledged CI/CD pipeline, have competitive advantage. Those, who have started to automate processes and replace human activities where possible, can adjust to the new scene with the most ease. The technologies are practically at hand. You need to automate everything, processes and decisions included, introducing AI-based solutions.
From front office to back office
To cite a classical example, think of the role of bank branches. In today’s world, the role of front office has become largely limited. Just consider: is there anything you can’t arrange from home with the help of a computer or a phone? An average mobile phone has built-in biometric identification solutions that point far beyond the average password. All identification can be performed remotely, all documents can be filed digitally, all interactions can be served remotely and digitally. The era of bank branches and front office is over, and time is ticking away for manual labour as well.
Take an extensive back office process, such as the much-discussed credit assessment, or individual discounts, or a simple account closure (although the latter is not in the bank’s interest) for example. The allotted time is mostly spent waiting. During this, my transaction is simply, inactively sitting on the shelf. It is waiting for someone to dedicate half an hour to it. And the approval process usually takes even more time. The person in charge of approvals is always more stretched for time, and they do not feel as though they owned the task. All the waiting is a net loss, most of which could be avoided by using proper automation and smart decision-making systems.
Decisions, decisions
Today, efficient automation means that the process doesn’t come to a halt at decision points; the system makes the decision based on a pre-defined set of rules or learned patterns. These systems are instructable and are generally capable of making the correct decision based on probability. Indeed, they are often better at decision making than humans. Of course, not even AI is infallible, but we can determine to what extent we must be secure in the given decision, i.e. how critical a decision is. Critical decisions that do not meet the pre-defined probability level can still be addressed on the human branch of competence. In the majority of cases, however, a less well-formed decision is still better than a non-decision. Consider how much time, energy, and money the decision consumes otherwise, stalled for days or weeks? These are all quantifiable losses.
Do it now and do it right
We do not have time mess around now. Less innovative banks and market players cannot afford to tackle process automation and automated decision-making with DIY solutions. Such an endeavour has numerous pitfalls and there are hardly any examples of a successful outcome. They need a professional solution that can be implemented and put to work swiftly. Time is ticking and viability is at stake.