Integration automation can streamline end-to-end financial technology processes and help deliver enhanced customer experiences. Plus, it is not that difficult to incorporate. Using application programming interfaces (API) provides stress-free connectivity for items such as payments, web apps, loan origination systems, customer support, and digital onboarding and other banking systems. 

For community financial institution integration automation represents a chance to not only compete with the big banks by integrating innovative fintech into day-to-day operations but also allows them utilize a selection of best-in-class technology, or even change providers, without hesitation. 

Digital Experience Transforming Consumers

Fintechs and many financial institutions have set out to reproduce the digital models created by the likes of Amazon, Apple and Google by transforming products into features to meet and customer needs and to engaged them, according to McKinsey and Company’s Global Annual Banking Review. The report explained “To remain relevant, banks and financial institutions will need to shift their focus from product to servicing customer needs and delivering a seamless customer journey.” 

McKinsey added companies like Netflix, and Spotify have taken existing services and transformed them into digital experiences now embedded in customers’ daily lives. For banking the fundamental essentials are still there, checking accounts, personal loans, or the point-of-sale terminal, “but they are less visible, a seamless part of a digital experience that goes beyond banking.”

Successful financial-services providers position their business for this shift, according to the McKinsey banking review. They attract customers by solving very specific yet relevant needs, connect them with other services and build a dynamic and distinctive customer experience; and provide customers with personalized analytical insights. 

“This increases customer engagement and, eventually, advocacy through word of mouth and social media. And in a virtuous cycle, it tells the bank or fintech more about customer behaviors and needs,” said McKinsey. 

The Effective Use Of Automation 

For most community financial institutions, the fintech evolution forced them to look for ways to catch up with cutting-edge technology. Some suggestions about ways to take financial institutions to the next technological level:

  • Deploying enterprise automation. An approach that is cloud-native, and uses API connections to offer enterprise application integration, data automation, and workflow automation between software as a service (SaaS) application, databanks, and microservices. Paired with automated integration competencies, this also allows external developers to work with an internal IT team to design automations for specific functions or department.
  • Breaking down data silos. Many banking departments operate in their own bubble. Accounting departments, for example, although vital to FIs, often remain inaccessible to other banking areas. This siloed information can confine business interaction. Many financial service firms have moved toward integration platform as a service (IPaaS) solutions to help unify their organizations. These streamline the connection between applications and the exchange of information. The capacity to integrate and share information with other tools is an essential element that fintech and FIs need to adopt.
  • Bringing in robotics. Robotics process automation (RPA) remains a budding method to decrease operating costs and increase banking operations efficiency. Although not a complete automation solution, it is still relevant for some tasks such as extracting info from a legacy system on a mainframe; the ability to utilize artificial intelligence (AI) and machine learning to handle various routine banking chores; and give financial institutions and service providers an unparalleled view based on system data. To work, the data these areas produce must integrate into AI/machine learning instruments seamlessly and easily. 

Just An Integration Game

“For the next several years, leading technology providers must play a leading role in helping enterprises navigate the current storms of disruption,” said IDC in its FutureScape research series. 

Deloitte also said in its report, Automation With Intelligence, “Organizations that are not afraid to embrace digital disruption are more likely to survive and thrive in the world of perpetual technological change.”

It all centers around financial service organizations developing tech flexibility, through improved decision-making and process agility capable of reacting swiftly to shifting requirements. In 2021, McKinsey put the burden for this on chief financial officers (CFOs), claiming “finance leaders are deeply involved in determining how businesses adapt to significant changes in how work gets done – particularly in places where digital and finance intersect”.

Gartner refers to this as “hyperautomation,” a tactic that empowers organizations to “rapidly identify, vet and automate as many processes as possible using technology, such as robotic process automation (RPA), low-code application platforms (LCAP), artificial intelligence (AI) and virtual assistants.” 

The key is a joined automation strategy – one that transforms how organizations manage content and data, enable workflows, and visualize performance and even forecast strategies. Gartner expects that by 2024, organizations will lower operational costs by 30%, by combining hyperautomation technologies with redesigned operational processes. 

Banking on a Sustainable Direction

“Well-valued specialist players and fintechs are — not surprisingly—active in banking products that generate profits, including deposits, payments, and consumer finance. The result is a two-speed system in which traditional banks are left behind,” said McKinsey in Global Annual Banking Review

Effectively servicing today’s banking consumers is no easy chore. However, those community financial institutions willing to make the necessary changes and investments can make it more stress-free. Critical to their success is selecting the technology providers with open and up-to-date platforms, an API-first strategy for enhanced integration with third-party platforms and personalization, and a forward-looking roadmap that supports with customer needs and expectations as they continue to evolve. 

Community financial institutions have much to gain. By offering a more modern digital experience with a full range of banking capabilities, community banks and credit unions can attract users and benefit from more revenue opportunities.

NXTsoft offers secure paths for financial institutions to free up and connect with fintechs. OmniData enables financial institutions to access its data quickly and securely when involved in linking diverse systems such as a loan system with their legacy technology; and OmniConnect, the vendor agnostic premier open banking marketplace for all API needs, uses cutting-edge cloud technology to connect fintech solutions to financial institutions. OmniConnect removes integration obstacles and provides a seamless connection between third-party solutions and financial institutions’ core digital banking, item processing and other systems.