Top 5 financial services that are ripe for automation

 

Top 5 financial services that are ripe for automation

Almost every day, a new report emerges highlighting the promising benefits of artificial intelligence (AI) and automation within the financial services sector. These studies often emphasize cost savings, enhanced operational efficiency, improved customer experience, and ultimately, increased profitability. Analysts project that by 2030, AI could cut operating expenses by 22%—translating to over $1 trillion in savings globally—as financial institutions transform their front and back-office operations.

The push for AI adoption is coming from both ends of the spectrum. Large, established banks are seeking to navigate major industry disruption and build more agile systems to remain competitive. Meanwhile, smaller fintech companies view AI and automation as essential tools for rapid scaling while controlling expenses.

Given the vast scope of possibilities, financial institutions sometimes struggle to determine where to begin or which automated processes will yield the greatest benefits. To help, here are five key financial services processes primed for AI-driven automation.

AI will serve as the driving force behind innovation, growth, and real market differentiation—the true value of this technology lies here.

1 – Anti-Money Laundering (AML) Analysis

Banks currently invest heavily in teams dedicated to investigating AML alerts after transactions occur. For example, one bank shared with Thoughtonomy that its AML costs reach £1.2 billion ($1.5 billion) annually, employing over 1,500 analysts who review 60,000 alerts each month.

The issue is that analysts spend nearly half their time gathering data on suspicious activities, often pulling information from five or six different systems before starting any analysis. This process is costly, slow, and tedious. High analyst turnover—sometimes up to 25% annually—further inflates costs due to hiring and training.

Deploying virtual workers can drastically speed up data collection, allowing human analysts to focus on deeper investigations. Virtual workers operate continuously and can process information up to five times faster than humans, potentially delivering a 15-fold productivity boost.

2 – Know Your Customer (KYC) Checks

Similar to AML efforts, financial firms conduct extensive background checks on clients. These checks are traditionally performed by large teams reviewing sanctions lists, government databases, and other regulatory sources—a repetitive and structured task. Although banks have relied heavily on human labor, loosening regulations now present an opportunity to enhance efficiency through automation.

Virtual workers can automate much of the KYC process by accessing systems just like humans, reading documents, and making rule-based decisions. They can flag cases requiring further review by senior analysts and increase the frequency of repeat checks by working after hours.

3 – Claims Processing

Insurance claims typically require manual review, with teams making subjective decisions on payouts. This manual approach makes thorough trend analysis difficult, increasing fraud risk and hurting insurers’ profitability.

Using virtual workers, insurers can process claims faster and more thoroughly. These AI workers extract data from claimant documents, compare it with previous claims, detect irregularities, and flag suspicious cases. When claims are legitimate, they cross-check procurement contracts to prioritize payments according to agreed rebates.

4 – Policy Quote Generation

Customers seeking quotes for car, home, or phone insurance often need to fill out multiple forms—an inconvenient process that can lead to drop-offs and lost sales.

One client has streamlined this by allowing customers to submit existing policy documents directly to virtual workers. These workers extract relevant details and generate quotes instantly. If the new quote is more competitive, a policy is issued right away, capturing the customer’s attention. If not, the data goes to a marketing team for further analysis. The result is a smoother customer journey, reduced service costs, and valuable market insights.

5 – Shared Services

When not engaged in client-facing or compliance tasks, virtual workers handle routine back-office activities that often drain employee productivity and morale. Tasks like financial reconciliations, employee onboarding, periodic screening, reporting, data entry, and mid-term adjustments are all well suited for automation.

Because virtual workers are versatile and process-agnostic, they can work across departments, breaking down silos that still exist within many financial organizations.