Digital transformation is a necessity in all sectors, including the banking and financial one. As companies look to digitise, some have had more success than others: 40% of insurers stated they implemented insufficient digital projects in the past year or none at all in EY Innovalue Insurance‘s Roundtable. Process Mining is an untapped technology that helps companies through recommendations to eliminate process inefficiencies, continuously monitoring improved processes in real-time and more.
Christian Brüseke is the Senior Director of Finance and Public Services at Celonis, and believes companies wanting to be in the top echelon of the finance and insurance industry in the future, have to act swiftly as the overwhelming evolution of digitisation does not seem to be slowing down. Having been working in sales for nearly two decades, Brüseke has extensive knowledge on what leads to success. Here, he speaks to The Fintech Times how Process Mining is key to effective digital transformation:
The rise of digital transformation as a business imperative is nothing new, with digital technology now intrinsic to the operations of most if not all modern organisations. This has only intensified during the covid-19 pandemic, with Microsoft CEO Satya Nadella observing that we saw two years of digital transformation in just two months at the start of the crisis, and similar acceleration continuing since.
The same applies to the banking and finance industry as, faced with global competitive pressure and increasing customer expectations, companies can’t afford to delay when it comes to digital transformation. However, the industry is falling behind. That is the conclusion of a most recent survey conducted as part of an EY Innovalue Insurance Roundtable. Although 93% of insurers state that digitisation can provide positive impulses for process improvements, around 40% of them have implemented insufficient digital projects in the past year or not at all.
If companies want to be in the top echelon of the finance and insurance industry in the future, they have to act swiftly. The competition never sleeps. Insurers and banks need to:
- Regain an overview of their sales processes,
- Align the processes even more closely with the customer,
- Optimise those processes to be more efficient, in order to
- Generate the greatest possible business outcome.
Recognising the potential of Process Mining
This is where Process Mining comes into its own. Through creating an X-ray of business operations, Process Mining technology delivers the invaluable insights to eliminate tailbacks, drive transformation and achieve improved business results. Only when business leaders understand their process inefficiencies, can they invest in the right digitisation activities.
However, change ultimately happens slowly. A study commissioned by Celonis shows that only a few financial service providers and insurance companies have so far utilised the potential of Process Mining. For example:
- Only one in five budget managers in the financial services sector knows about the benefits of Process Mining.
- Only every tenth company intends to increase investments in Process Mining.
- Every third leader doesn’t know what Process Mining is.
Therefore, many organisations are still missing the chance to capture, analyse and optimise business processes with the help of this innovative technology.
Since business leaders don’t know about this powerful technology, they miss out on opportunities to stay ahead of the competition, which is vital in a market that’s characterised by increasing cost pressure and competition.
How can Process Mining help those in the Financial Services Industry succeed?
Process Mining uses data generated from digital business processes, which are recorded in so-called event logs. These are saved by default, for example when contracts are concluded or service requests are processed. In the financial services industry, Process Mining can be applied in multiple business areas, including claims management, premium collection, customer service management or internal audit.
With Process Mining, however, insurers and financial service providers aren’t only able to make individual parts of their business more efficient. They also receive a holistic overview and starting points for a comprehensive digital transformation across company divisions – with the clear goal of improving the business results throughout the entire company.
Underpinned by machine learning and artificial intelligence, Process Mining also provides next-best-action recommendations to eliminate process inefficiencies – for example, in internal procedures in the context of claims settlement.
Process Mining also helps to continuously monitor improved processes in real-time. This enables companies to achieve optimal results, such as fast processing of customer inquiries or prioritised payment of invoices. This has a positive impact further along the value chain: Not only are processes more efficient, but employees – and customers – are happier. In times of high customer demands, Process Mining is an important basis for long-term success.
Advantages of Process Mining and looking forward
The time for the financial services industry has come to tackle digitisation in a more systematic way. Isolated from the day-to-day business and created on the drawing board, transformation initiatives only create new friction. And friction is the last thing companies need when the stakes are high.
Business leaders need to optimise business processes to drive successful digital transformation initiatives in the long term. For banks, insurance companies, and other financial service providers looking to remain competitive in a fast-moving and complex market. Firstly, Process Mining technology boosts efficiency and allows companies to create fast added value for customers. Secondly, the data-based approach reduces risks while increasing control. Finally, since weak points and cost drivers are identified immediately bottlenecks can be avoided. The result is invaluable: optimised, frictionless processes that lead to better business outcomes and effective digital transformation initiatives.