Since the beginning of the Industrial Revolution, automation has had a great impact on all economic activity. Banking is no exception, since digital transformation and intelligent tools are allowing repetitive tasks to be done automatically, giving rise to the techfin.A report by McKinsey reveals that 40% of financial activities are fully automated, including cash withdrawal, revenue management, and more. Also, financial institutions are making use of RPA (Robotic Process Automation) as a means of automation at scale. However, what really is banking automation?Banking automation: concept and implications for techfinsBanking automation refers to all processes within banks, credit unions, and financial institutions that rely on intelligent automation tools to optimize the organization's regular processes.Given that activities in a bank consist largely of repetitive tasks and administrative processes that are executed over and over for different customers and users, banks turn out to be an ideal area for automation-centric technology.In addition, thanks to the development of complex fraud detection solutions and investment systems, these types of companies have the opportunity to adapt them to their operations.The massive transition of banks and financial institutions to this model has led to the emergence of new products and services based on the data these functionalities produce, such as low-code and no-code tech, RPA, and Artificial Intelligence (AI).Benefits of banking automationDue to the large number of financial products birthed and run by automation, institutions like techfins can drastically shorten response times and increase the value of their employees' talent by freeing them from cyclical activities.It is also capable of generating competitive advantages like:
  • Increased trust as a result of the development of UX (User Experience)–optimized front-end applications; online banking services; AI tools, as for budgeting or expense management; as well as anti-fraud solutions that help mitigate money laundering risks.
  • Better accuracy through substantial reduction of human errors caused by manual tasks, maximizing profitability and improving results.
  • Improved efficiency due to the simplification of back-end processes such as document management, integration with other tools, and deep analysis of conditions and data to identify new business opportunities.
  • Better scalability by allowing businesses to dispense with traditional, limited solutions that hinder growth by adopting custom automation tools that can add functionality whenever a need arises.
Now, knowing what banking automation is, it’s time to talk about the concept of techfins.What are techfins?“Techfin” denotes a technology company that enters the financial sector to offer innovative products and services which are, of course, aligned with the company’s needs. This describes its relationship to financial and banking obligations.In short, it refers to companies that launch financial solutions integrated to an internal management system, working with financial resources and providing a centralized view of data in one interface.It’s a term coined by Jack Ma, the founder of Alibaba, the "Amazon of China." The investor and entrepreneur created the first techfin model by incorporating, along with the BATs (Baidu, Alibaba, Tencent), financial products into already-popular applications.In the Americas we have some examples with Google, Apple, Meta (Facebook) and Amazon (GAMA), companies that have financial services for their users, freeing them from the need to resort to banking institutions in order to access credit and savings products.One of the major problems that techfins solve is the process of integrating and updating financial records, one of the biggest obstacles for banking and cooperatives to provide a satisfactory customer experience.It is estimated that tech platforms can save up to half the time professionals have to spend on integrating a file.What is a techfin for?A techfin is a technology company focused on providing innovative and modernized financial services, centered on technology, data, and the customer base.They leverage data expertise and the existing customer base to offer differentiated and optimized financial services in comparison to traditional market providers.Through these financial products, techfins collect data for themselves, but focus their data collecting on identifying customer needs, payment behaviors, and latent needs to make the most of available business opportunities.How do they work?Techfin companies, given their B2B focus, have an inherent goal of transforming the traditional mechanisms handled by corporations and financial institutions into simplified processes that are available to all.Its purpose is based on the deployment of user-friendly resources, solutions, and interfaces that generate centralized data to collect and analyze the information produced by consumers.In a simple and practical way, techfins make financial tools available to an organization's conventional platform, extending services to companies that don’t necessarily belong to the segment.Considering a large number of companies have no experience with financial products, techfins bring to the market customized services that facilitate problem solving and removing obstacles.Benefits that a techfin providesSome of the many services and operations that a techfin can provide to different businesses in diverse sectors are:
  • Personalized services by creating a culture of information exchange that favors product development and customer service mechanisms.
  • Saving time in implementation of technology, due to a direct deal with the financial service provider, focusing on customer service based in the intuitiveness of systems and platforms.
  • Practicality, by making financial services available to customers with only the requirement of being a user or consumer of the business.
  • Minimizing errors, since management is performed by automated tools and area experts, facilitating the workflow and adding value to the business’s administration and operation.
  • Fewer mistakes in customer-provided documents, thanks to digital solutions that perform automatic checks to reduce workloads.
  • Analytical data, integrated into the company's technological ecosystem and setting the stage for financial information analysis.
  • Automation of processes for connecting with credit and legal agencies, thus giving clients and employees immediate information for agile decision making.
  • Security through tools such as electronic or digital signatures.
  • Identity authentication through biometric methods or two-step authentication.
  • Integration with different tools, such as CRM (Customer Relationship Management), BPMS (Business Process Management Suite), and others.
What is the difference between techfin and fintech?While learning about the functions and benefits of techfin, it’s likely for its definition and purpose to sound similar to those of fintechs. However, it is important to differentiate them in terms of structure and content.For one, techfins are companies in charge of digitalizing processes based on organizations’ technological capabilities. For another, fintechs create new digital operations that would be impossible to execute otherwise.To rephrase, we could say the difference between techfins and fintechs is that the first is a company that uses technology for financial activities, while the second is a company grounded in digital financial operations.Meet SYDLE ONESYDLE ONE is the ideal tool to create a full-service experience for your customers. Through its all-in-one modality, this platform manages to combine the most important solutions for a company in one place.With SYDLE ONE, you will be able to increase your organization's productivity, adopt a culture of continuous improvement, optimize internal processes, and improve the quality of each of your company's essential and peripheral operations.Some of the functionalities it offers are:
  • Billing
  • CRM
  • ECM (Enterprise Content Management)
  • Analytics
  • BPMS
  • Service Desk
  • E-commerce
  • And much more!
If you want to learn more about its features and how you can bring digital transformation to your organization in a real and comprehensive fashion, you should learn more about SYDLE ONE!
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