Financial institutions are investing in technology to improve efficiency amid market pressure to increase deposits.
According to jack henryImproving operational efficiency is a top strategic priority for banks and credit unions over the next two years, according to its 2024 Strategic Benchmarking Report. The survey was conducted in January and February and included responses from 127 chief executives of banks and credit unions.
The following financial institutions have recently made investments to increase efficiency.
- HSBC Digitize internal operations to improve efficiency. and
- wells fargo has invested in self-service capabilities through mobile applications.
Bank automation news A conversation with Jack Henry’s Vice President and President of Banking Solutions Jonathan Baltzell Discuss how to leverage new technology to approach efficiency projects within financial institutions. Below is an edited version of that conversation.
Prohibited: How do financial institutions decide where to invest in technology?
Jonathan Baltzell: It starts with the institution’s strategic plan. That is why we need to encourage investment in technology and other areas. Our latest benchmarking research shows that the top two priorities for banks are growing deposits and improving efficiency. These two areas of focus can be linked. For example, our online account opening solution, JHA OpenAnywhere, is extremely helpful in driving the online account opening process more efficiently, and our Banno solution integrates account opening.
Prohibited: How can financial institutions identify what to automate?
JB: In terms of efficiency, I think every institution should consider what they can stop doing. Find out what you can do to quit because it’s the easiest way to be more efficient.
From a technology perspective, the areas where we see consistent and quantifiable benefits are workflow automation and robotic process automation. Institutions that integrate Jack Henry’s jhaEnterprise Workflow (EWF) solution with Jack Henry Core can achieve an average cost benefit of $108,000. As you integrate EWF across multiple solutions, you’ll find that the results really start to get complicated. For example, if you integrate EWF with your core, CRM solution, and content management solution, the average cost benefit is $229,000.
Prohibited: How do you approach efficiency projects with financial institutions?
JB: Every efficiency project begins with some cost analysis and reward forecasting. There are many institutions that are not operating as efficiently as they could, but they may not have the deep knowledge of solutions to identify those inefficiencies.
At Jack Henry, we have an in-house group called JHA Client Services Consulting, made up of former bankers who have operated our solutions, to help us determine where to drive efficiencies in our banking operations.
From there, the team compiles a cost analysis and expected compensation, and based on those numbers, banks can look back and see whether investments in workflow automation, robotic process automation, and other tools are paying off.
Prohibited: What technologies is Jack Henry investing in to meet client demand for new capabilities?
JB: Jack Henry is investing in the following technology modernization efforts:
- Jack Henry Financial Crimes Advocate: Our new fraud solution, currently in beta, feedzai‘s industry-leading AI engine reduces false positives and increases efficiency through fraud processes on a single platform. The platform leverages AI and behavioral analytics to manage and automate BSA and fraud processes in near real-time.
- Create an enterprise account: We had many different account opening solutions, but we wanted to consolidate them into one cohesive account opening platform to reduce friction, improve the account opening process, and provide an account opening experience that can be completed in minutes. It is designed to. I think we are close to achieving that next year.
- Jack Henry Platform: This platform is a collection of modern core services. We are in the process of introducing AI capabilities into these services and believe this represents a significant opportunity to drive efficiency for financial institutions.
