Listen: Why commercial banks struggle to digitize account opening

Commercial banks are focusing on a human-centric approach to relationships that may be holding them back when it comes to digitizing such basic functions as account opening. This more human approach is a challenge, Art Harrison, co-founder and chief growth officer for workflow automation vendor Daylight Automation , tells Bank Automation News in this episode of “The Buzz” podcast. “A lot of the trust and the relationships at banks, particularly on the commercial side, is still human-centric,” Harrison says. “The differentiation and the value that a lot of these organizations still bring is the expertise and the guidance that they provide to these busy stakeholders.” Fifty-six percent of commercial banking executives say digital account opening is the No. 1 technology issue for business customers over the next five years, according to a recent study by Phoenix-based Catalyst Consulting Group . That report also noted that the difficulties with onboarding commercial clients come down to complex relationships and workflows. This, in turn, has led to barriers in automating key functions like verifying business entities, according to the report. Harrison tells BAN that regulatory requirements like knowing the beneficial ownership structure also bog down efforts to digitize commercial processes. The Canadian-based company, founded in 2015, works with financial institutions such as BMO , BMO Harris and Manulife Financial , which owns John Hancock Financial in the U.S., to tackle this issue through its low-code solution , he explains. Daylight Automation has raised $15.9 million over four funding rounds, according to Crunchbase. Bank Automation Summit Fall 2022, taking place Sept. 19-20 in Seattle, is a crucial event on automation and automation technology in banking. Learn more and register for Bank Automation Summit Fall 2022 . Subscribe to The Buzz Podcast on iTunes , Spotify , Google podcast , or download the episode .

The following is a transcript generated by AI technology that has been lightly edited but still contains errors. Loraine Lawson Good day and welcome to Bank Automation’s podcast series, The Buzz. I’m Loraine Lawson, and recently I spoke with Art Harrison, co-founder and chief growth officer for Daylight Automation, a low-code tool for workflow automation. I asked Mr. Harrison why commercial banks struggle to digitize processes, including account onboarding. Art Harrison I think there's a few. There's kind of a few areas that I've seen them struggle in our dealings across a lot of the different organizations, banks. And really, onboarding is a struggle across lots of industries, not just commercial, obviously. But number one, a lot of the trust and the relationships at banks, particularly on the commercial side, is still human centric, right? You're dealing with owners, operators of small and medium sized businesses or large organizations. And the differentiation and the value that a lot of these organizations still bring is the expertise and the guidance that they provide to these busy stakeholders. tie that in with all the regulatory needs around, you know, who is the ownership, the beneficial ownership structure, all this documentation that's required. So organizations have struggled to turn that into something that is bite size that can be augmented with human, you know, in the staff effort, but also can be done not necessarily in a single sitting for these organizations. And so trying to find the, a what an ideal solution even looks like, where do we engage? Where do we help? When can people do pieces themselves? And then on top of that, trying to find the resources internally to put towards building projects like that has been a struggle. And so they'll either you know, it's either just, here's a, you know, I've gone through it as an operator, here's Welcome aboard. It's a great system, here's 72 forms, please fill these out. Or, you know, or you get them doing small incremental changes, you know, we turned it from 72 forms into 30. It's the win, but not necessarily actually meeting all of those needs they have for all the different products to cash management, and doing it in a way where it feels the way that I'm used to working, you know, when I'm ordering a product on Amazon are doing my taxes. It's been a real struggle for a lot of these organizations. Loraine Lawson There's just more complicated than retail onboarding, it sounds like. Art Harrison Yeah, yeah. It's a And they're competing against those retail projects for the resources internally often to get even if they have a vision of what they want it to be. They're competing against every other department who is also looking to improve their onboarding or their retention or their interactions with clients. So you're kind of in this rock between a rock and a hard place, you know, of it being hard to do, and being difficult to get the attention to actually do anything internally. Loraine Lawson So can you explain a little bit about what Daylight Automation offers and what you automate just for listeners? Art Harrison Yeah, Daylight Automation is a platform that's really aimed at helping organizations you know, achieve those two big goals they have, which is either reducing the cost and length of building these types of solutions that let them operate the way they want, and their customers to get that experience a desire. And we're also there to help organizations that are looking to get more out of their existing technology investment. So what daylight is, is, it's a platform that sits kind of on top of all of the rest of the process and technology and people that are in your organization, lets you involve subject matter experts to build the ideal experience. So that you can guide an employee or a customer through providing the information to be on boarded to a new product, or to renew or change their account. And we make it really easy so that you can build that ideal experience and still get the data or the outputs the way you need it for your internal operations or your regulators. I usually use TurboTax as an analogy, just to keep it you know, visual, at least mentally visual, and say that TurboTax and the tax industry do the same thing. For a singular process, the IRS has a very complex business process that is full of forms and addendums. And the tax industry created these on ramps to make it easier for consumers to provide that information and complete the process. Daylight brings that kind of utility to a bank to to any organization so that they can build that kind of an on ramp without having to change everything about their back end process. Loraine Lawson So you're integrating with those back end processes through what API's or custom integration, how does that work. Art Harrison That's, that's really where our where we've had success is we treat those those outputs those core systems as their outputs, and we work with whatever you have. So there's like a lifecycle of maturity for, for a bank, some are still incredibly paper heavy. And if that's the case, you can build the onboarding experience or any of those experiences that you want, that is ideal. And the output might still be the 17 different paper forms that you need for your back office to onboard that product. For a more mature organization, absolutely, you collected the right information. And if you have a banking system, a court system that can do the adjudication or the origination or you know, send out the cards or whatever else is needed will integrate directly into digital system. And what where people get excited is that there they can move between those levels of maturity very easily with, you know, you build the ideal experience. And then as you evolve your back end, you can change from paper to digital to, you know, an instant approval if that's so desired, but you're not reinventing the employer that customer experience every step along the way. So Loraine Lawson How do you categorize yourself or hire would see a Gartner Forrester categorize your your offering? Art Harrison It's really a great, it's been a bit of a challenge as an organization that can do so much. There's a framework now called hyper automation. That is probably it's not a category, it's really an ideal idea that the next phase of automation and maturation of organizations is hyper automation, where you have a single entity that's orchestrating how you're collecting information, how its flowing into your systems and your processes. And that's probably the closest, but there's others that might categorize us as a user experience, or employee experience solution, or a document automation solution or a workflow solution. Were really a Venn diagram of all of the above were about the the origination, the entry point of all of those different things is the experience of collecting data either with an employee or as a self service application, and we enable the creation of that, and then the delivery to any of those downstream categories, rpa, workflow, API's paper forms, whatever it may be. Loraine Lawson So do you use RPA? Is that part of your offering? Or do you work with RPA? Art Harrison We work we're additive to RPA. So a lot of times we're owned by you know, we can be owned in an order organization by all different departments. But RPA is a really common one where it's really good at doing a task, when there is good data to work with, it can take that data and move it into a legacy system or put it into the right basket for someone to action. But the struggle is, a lot of organizations historically had to buy other technology or try to scrape data out for the ERP to actually work with. So they invest a lot in extracting data from a written paper form. Or they're trying to read data from other sources. And with daylight, we work with RPA in the sense that someone may design the ideal experience to collect the information to onboard a commercial account. We've captured all but they have no API for us to send it to. So we'll deliver it to that RPA bot that is been configured to now take that information and move it into a legacy, you know, a green screen or move it into, you know, an origination system. So we're tend to be partnered up with it, not necessarily a direct offering that we have, but together the value of both kind of increases. Loraine Lawson Okay, so what are some creative use cases you've seen for your product? The banks have used you for what did they? Well, what's creative, Art Harrison there's, there's really three categories that I'd say that we we've worked with that that I get really excited about. So the first is organizations that are looking to move, things that were never on the radar before, into the self service, let the clients do it themselves area. So you think of a branch and all of the 1000s of processes that you walk in, and you say, You know what I'd like to give my, my, you know, son in law, Power of Attorney over my accounts, or I'd like to change the beneficiaries. All of these typically were paper forms, or they were in some weird subsystem. And we enable organizations to turn those into really delightful experiences that guide them on how to do the process without knowing anything about it. The next would be the what I call the assisted channel. So going back to the branch example you have, we have organizations with, you know, 1000 2000 3000 branches, and they spend countless hours and dollars training every one of their hires on 1000 different processes that someone may walk in for. And so with daylight, they build the training right into the application. So when someone walks in, and you say, what do I want to do, it guides the employee through what to ask, so that they are collecting the right information driving to that right outcome and not wasting anybody's time. And then the third is internal, you know, HR I, you know, I'm a new employee, welcome aboard to great organization, I don't want to have to fill out 17 different documents about myself, my family, you know, for my benefits are my key card. So turning the all of those internal audit employee, whatever it may be into, again, really easy to do processes. Some of the most creative have been areas that we didn't initially plan for, but they were one of those three. So we see a lot of call centers, leveraging the same thing, a call center, you answer the phone, and the person on the other line is usually stressed about something. And they want to do one of 1000 different things, they want to check on their accounts, they want to change something. So a lot of call centers are building guided experiences with the daylight platform, so that they can onboard a new call taker in days, and have them ready to accept any of those 50 different processes. That's been really creative. And what what is really creative is not so much the genre. It's the personality that organizations want to codify in their processes, they know that their their approach is unique. And when you can mimic your best performers, and bake that into the experience that everyone executes, because you're walked through the same process. That's it, you seek creative outcomes, because every organization wants to the language they use the knowledge they want to bring to every transaction, every interaction is really fascinating. And we get to see that because we're not we're an enabler, not a prescriptive way of doing it. Loraine Lawson So one of the things I promised we wouldn't talk too much about. But one of the things low code typically associated with the citizen developers. So tangential to that. What what sort of best practices can you recommend to banks that have citizen developers or with breath practices? Have you seen out there in the market? Art Harrison Yeah. So you know, first and foremost, on the on the low code thing, like I am a huge proponent, I actually believe that it's, it's basically table stakes now for most products to have at least some low code areas of their platform. It's not necessarily a category in and of itself, because there's low code, marketing tools and low code, you know, development tools, you know, anywhere looking at analytics. But enabling the people that are actually interacting with a process with a problem to solve it themselves is a huge accelerator, and it unlocks the ability for organizations to get more done for the same cost that they've been spending before. So huge proponent of using it, the risk and the challenge is having the governance and the guardrails so that those people are building the, the process or building the solution that they need for their problem. But that the, the governance and the ownership can ideally remain Central. And what I mean by that, I've talked to a lot of architect and, you know, executives on the technology side, and they have a fear, and it's right, it's a right, you know, justified fear, which is, all of these citizen developers are going to solve these problems that we couldn't get to, which is great, but three years from now, when they're not working, or we change something in our back end, who's going to maintain them? If there's 1000 solutions out there built on people's laptops? How are we going to actually support this and not being a new problem set three years from now. And so where we focused and where we believe kind of best practices lie is enable the IT leadership to the architectural groups to own the flow of information, how does information flow into these processes? How does it flow out of these processes, don't let don't necessarily turn that into a low code activity. That's still an essential piece of your business, where the data resides, how it flows in and out of core systems, and segregate those roles. So enable the project delivery on the tick onboarding, let the SME The Citizen developer build the rules, what data needs to be captured what the outputs are, but have the architecture team owns the integrations, the branding, the maintenance of it so that you can still make upgrades at scale, you can still diagnose and support applications. You're just not putting those same developers on the requirements, and the iterations and the small tweaks and changes that need to be made to the project. They own the platform and that's kind of where we see best practices, not just to deliver today but to be able to support it going forward. Loraine Lawson: You’ve been listening to the Buzz, a Bank Automation News podcast. Thank you for your time, and be sure to visit us at Bank automation news.com for more automation news. You can also follow us on Twitter and LinkedIn. Please don’t hesitate to rate this podcast on your podcast platform of choice.

Listen: Why commercial banks struggle to digitize account opening

Daylight Automation co-founder explains the challenges

Research: Alt lending model outperforms credit score on opening up lending

Fintech Funding: Backbase secures $128M, clears $2.7B valuation

Related Posts

AI adds 40K hours of productivity at Customers Bank

Gilmour leaving HSBC to become CTO at Lloyds

Backbase launches agentic AI chat tool that takes action

Fintech Funding: Backbase secures $128M, clears $2.7B valuation

EMERGING FINTECH DIRECTORY

FinAi Podcast

SPONSORED

The Next Generation of Cyberthreats: Powered by AI

Build an Antifragile Strategy to Outperform the Market

How AI and Product Experts Turn Fuzzy Requirements Into Focused Dev-ready Roadmaps

Connect

Welcome Back!

Retrieve your password

Continue Reading with FinAi News Premium - Less than $2/Day

Listen: Why commercial banks struggle to digitize account opening

Daylight Automation co-founder explains the challenges

Research: Alt lending model outperforms credit score on opening up lending

Fintech Funding: Backbase secures $128M, clears $2.7B valuation

Related Posts

FinAi Podcast

Connect

Welcome Back!

Retrieve your password

Unlock This Article

Continue Reading with FinAi News Premium - Less than $2/Day